Reserve Bank of India (RBI) governor Sanjay Malhotra on Wednesday told urban cooperative banks (UCBs) to be mindful of their responsibilities, given the trust and faith depositors repose on them.
In a meeting with the chairmen, managing directors and chief executive officers of select UCBs, the governor asked them to maintain high standards of customer service to build and retain the trust.
The governor’s comments came after the RBI on February 14 had imposed business restrictions on New India Co-operative Bank and superseded the board due to concerns over poor governance.
The police have arrested Hitesh Mehta, general manager and head of accounts of the cooperative bank, for allegedly misappropriating Rs 122 crore. Some other persons have also been arrested and the investigation is still going on. It was the first major action against a cooperative bank in Maharashtra after the collapse of the Punjab and Maharashtra Co-operative Bank in 2019.
The governor acknowledged the important role UCBs play in serving the people at the grassroots level and deepening financial inclusion. He said the RBI will continue to support the sector in its growth ambitions, and advised UCBs to ensure that they remain operationally resilient with regard to IT- and cyber-related risks.
RBI deputy governors M Rajeshwar Rao and Swaminathan J, along with executive directors overseeing regulation and supervision, were present at the meeting.
The meeting was a part of the RBI’s series of engagements with its regulated entities. Representatives from industry bodies, including National Urban Cooperative Finance and Development Corporation and National Federation of Urban Cooperative Banks & Credit Societies, also participated in the meeting.