Coop Banks: Small in size, Deep in reach
Dr. Bhagwat Kishanrao Karad, Minister of State in the Ministry of Finance, Government of India, was the chief guest at FCBA 2021. Excerpts from his keynote address:
Being rooted in local communities, the cooperative banks across the nation are more responsive to the needs of the local people. There is a substantial increase in the operations of cooperative banks and urban cooperative banks. There is a provision in RBI with effect from 1st March 1966 for protecting the interest of the depositor. The urban cooperative banks cater to the financial needs of more than 85 million depositors and 6.6 million borrowers across the nation and for the customers who are mainly from the low-income segments of the population. The urban cooperative banks play a significant role in reaching the last mile customers, despite their lower market share.
In 1967 there were 1106 urban cooperative banks with deposits and advances of `1.53-1.67 billion, these numbers are increased now up to `139.9 billion and the deposits and advances have increased by 86.6 billion. The urban cooperative witness considerable growth in the 1990s on the back of a supportive licensing environment.
The share of the urban cooperative banks in the banking sector has gradually declined and stands at 3%, as of March 2020. 40% of the entities in the banking sector are urban cooperative banks, however, their share in the banking sector deposits and advances was 3.24% and 2.69% respectively.
The urban cooperative banks are important because the nationalized banks and the private banks do have not their deep presence in villages and in the integral parts of the country. The network of urban cooperative banks, co-operative bank, and credit societies have deeper reach compared to PSU and private banks.
We are focusing on increasing financial intelligence and digital transactions. It is also important to increase financial literacy because this will increase the transparency traansparency in the currency. This will increase inccrease the taxable income and it will reduce redduce the black money. The cooperative banks bannks have done good work in different sectors, secctors, and I expect more good work in the e coming years from them. After the pandemic the economy is growing, the e expectations of the government from froom direct and indirect taxes are satisfactory. sattisfactory. Last year’s i ncome from froom the GST was 1.7 trillion The budget buudget of our country is around
34.7 trillion, out of these 12 trillion comes commes from direct taxes, and similar amount ammount from from indirect taxes.
We have also taken the decision of disinvestment of Air India, the loss of Air A India was 200 million rupees per day, day y, with its recent stake the loss will be minimized. mi inimized. In the bank’s, there are more deposits dep posits and credit are less, so regarding it, we had a meeting with state banks and an d private banks in Mumbai, we are working wo orking on it to come out with a certain conclusion, con nclusion, which will be helpful to the citizens citi izens of the country.