RBI Governor Sanjay Malhotra meets urban cooperative bank chiefs

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday met select urban cooperative banks' chiefs in Mumbai as part of the banking regulator's periodic exercise. In his opening remarks, Malhotra—who took charge as the 26th Governor of the RBI in December—acknowledged the vital role that urban cooperative banks play in serving the people at the grassroots level and in cementing financial inclusion in the country.

The RBI Governor also said that the central bank would continue to support the urban cooperative banking sector in its growth ambitions while noting that such lenders need to be mindful of their responsibilities in light of the trust reposed on them by the depositors.

The development comes at a time when the RBI has revised certain rules and guidelines for the sector with an aim to grant more operational flexilibty to such lenders. UCBs—or financial institutions operating in urban and semi-urban areas—offer banking services to small borrowers, micro-businesses and lower-income groups.

Besides the urban cooperative lenders' chairmen, managing directors and chief executive officers (CEOs), representatives from industry bodies National Urban Cooperative Finance and Development Corporation Limited (NUCFDC) and National Federation of Urban Co-operative Banks & Credit Societies Limited (NAFCUB) participated in the meeting. RBI Deputy Governors M Rajeshwar Rao and Swaminathan J and Executive Directors in-charge of Regulation and Supervision were also present in the meeting. 

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The RBI Governor highlighted the importance of maintaining high standards of customer service to build and retain trust.

The RBI received feedback from the participants and provided a slew of suggestions during an interactive session at the meeting.

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Malhotra advised the bankers to ensure that they remain operationally resilient against a number of risks including those related to the IT and cyber spaces.

Urban cooperative banks, a crucial sector... 

This year, the RBI superseded New India Co-opearting Bank’s board while restricting it from issuing withdrawals to its customers. It later allowed the co-operative lender from withdrawals of up to Rs 25,000 per depositor.

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