Amit Shah to inaugurate Umbrella Organisation for Urban Cooperative Banking sector on March 2

New Delhi [India], February 19 (ANI): Union Home Minister Amit Shah, who also holds the portfolio of the Cooperation Ministry will inaugurate the umbrella organisation for the urban cooperative banking sector on March 2 in New Delhi.
Jyotindra Mehta, Chairman of National Urban Cooperative Finance and Development Corporation Ltd (NUCFDC) announced that consequent upon the Reserve Bank of India issuing the Certificate of Registration (COR) to NUCFDC to function as an NBFC and become the umbrella organisation for the sector being formally launched on March 2, 2024, at a function in Vigyan Bhavan, New Delhi which will be graced by Union Home and Cooperation Minister Amit Shah.
Mehta said that with the issuance of COR by RBI, NUCFDC will function as an Umbrella Organisation (UO) for the urban cooperative banking sector.
"It will be given permission to function as a self-regulatory organisation (SRO) for the sector," he said.
Tracing the history of the need for such an entity, Mehta said that the concept of cooperative banks having an institution of their own to provide various specialised functions and services to them as also to be a bridge between the banks and the regulator is already prevalent in many countries.
The Rabobank group in Netherlands, OP Financial Group in Finland and BVR Group in Germany are some examples of highly developed and successful cooperative banking conglomerates.
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.
"RBI itself has taken the initiative in encouraging the sector to have its umbrella organisation. Based on the guidance of RBI, NAFCUB submitted a proposal that was approved and the UO by the name of National Urban Cooperative Finance and Development Corporation Ltd (NUCFDC) has been promoted by the sector," the press release read.
With a share capital of Rs 117 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 mobilization in another twelve months. The approval granted by RBI envisaged providing a range of fund-based and non-fund-based services to member UCBs and robust state-of-the-art IT support that was affordable to the small UCBs.
"The RBI has already granted some relaxations/ regulatory concessions to UCBs for subscribing to NUCFDC," the press release added.

Mehta informed that the NUCFDC is managed by the Board of Directors and CEO who have proven credentials in their respective areas of expertise and have been appointed as per fit and proper 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," he said.

Mehta was upbeat about the formation of NUCFDC a game-changer for the UCB sector. He pointed out that the 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, and IT capabilities which will make the UCB sector vibrant and also boost public confidence in the sector as a whole," he said.
"Mehta expressed his gratitude to the Government of India, especially Amit Shah, and his team in the Ministry of Cooperation for their unstinted support. He also said that the Governor of, the Reserve Bank of India, Shaktikanta Das and all senior officials of RBI have been encouraging and keenly following every development in the formation and operationalization of the NUCFDC," the press release read. (ANI)