NAFCUB Umbrella Organisation to be launch soon, to help smaller Urban Cooperative Banks to scale up
Union Home Minister and Minister of Cooperation Amit Shah will inaugurate the Umbrella Organisation for urban cooperative banks at Vigyan Bhawan in New Delhi on March 2.
An umbrella organisation for the urban cooperative banking sector, to be inaugurated soon, is going to offer technology and capital support to the small Urban Cooperative Banks while allowing them to scale up. The Umbrella Organisation for the urban cooperative banks will be inaugurated by Union Home Minister and Minister of Cooperation Amit Shah at an event at Vigyan Bhawan in New Delhi on March 2.
All the necessary regulatory clearances for the Umbrella Organisation have been obtained by the National Federation of Urban Co-operative Banks and Credit Societies (NAFCUB), the apex body of the urban cooperative banks. The Umbrella Organisation, the National Urban Cooperative Finance and Development Corporation (NUCFDC), has received the Certificate of Registration (CoR) from the Reserve Bank of India (RBI) to function as a non-banking financial company (NBFC).
Mr Jyotindra Mehta, Chairman of NUCFDC, addressing the media said that the Umbrella Organisation will also function as a self-regulatory organisation (SRO) for the ubran cooperative banking sector.
The approval granted by RBI to NUCFDC envisaged providing for a range of fund-based and non-fund-based services to member UCBs and a robust state of the art IT support that was unaffordable to the small UCBs.
Mr Mehta informed that the NUCFDC will be managed by the Board of Directors and CEO who have proven credentials in their respective areas of expertise and have been appointed as per the criteria prescribed by RBI. The day-to-day operations will be managed by professionals with domain knowledge in the organisation that will be intensely technology driven on a state-of-the-art IT platform, as per the provisions of the Companies Act.
Mr Mehta was upbeat about formation of NUCFDC a game changer for the UCB sector. He pointed out that birth of the institution is an affirmation of principle of cooperation among cooperatives based on mutual trust and cooperation, support and solidarity despite marked heterogeneity in respect of size, spread and business profiles of the banks.
“Let us join together to have a structure where individual UCBs are ready to cooperate, network and help one another and submit to certain mutually agreed self-discipline to make the umbrella organisation effective and successful. Collectively, we can release a synergy that will enhance our efficiency, competitiveness, IT capabilities which will make the UCB sector vibrant and also boost public confidence in the sector as a whole”, he said
The urban cooperative banking sector to have its umbrella organisation that will provide facilities of fund based and non fund based support to the urban banks, had been discussed for nearly two decades. Based on guidance of RBI, NAFCUB on behalf of the sector submitted a proposal which was approved and the umbrella organisation, NUCFDC, came to existence. With the share capital of over Rs 119 crore subscribed by the urban banks, the NUCFDC has been issued CoR to function as NBFC by RBI. The share capital is to be increased to Rs 300 crore by further mobilisation in another twelve months.
Shri HK Patil, Minister for Law, Parliamentary Affairs and Tourism, ,Karnataka, who is also Chairman Emeritus of NAFCUB and a founder director of NUCFDC said, “The sector has got its umbrella organisation after a long wait and after the concept had passed through various levels of scrutiny. It is up to us, all the urban banks, to make a success of it by participating in it wholeheartedly. The organisation has to travel an uncharted course and for this we on our part will ensure that it is managed by a competent team of professional managers with understanding the needs of the sector.”
The RBI has already granted some relaxations and regulatory concessions to the UCBs for subscribing to NUCFDC.
Mr Mehta expressed his gratitude to Home and Cooperation Minister Amit Shah and the RBI Governor Shaktikanta Das for making NUCFDC operational.
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