<p> Reserve Bank of India (RBI) Deputy Governor R Gandhi has called for improvement in the state of cooperative banks in India since they compete and coexist with other more ‘stable’ banking enterprises and financial institutions.<br /><br /></p>.<p>“Cooperative banks must adopt technology in a big way since it’s the need of the hour, and it will enable them to function in a better way,” he told delegates at the silver jubilee function of the National Institute for Rural Banking (NIRB) here on Friday.<br /><br />“There is an immense lack of technology being integrated into the functions of cooperative banks; they are reluctant to adopt it, until RBI and NABARD (National Bank for Agriculture and Rural Development) forced it down on them,” he added.<br /><br />Citing a slew of issues that have dogged the cooperative banking sector such as low capital, poor management, and intrusive governments, Gandhi said there is a need for them to find and recover their strengths.<br /><br />“A major concern is the decline in the cooperative character of these banks, owing to a few restrictive practices and wrong formats in voting. There is also a lack of professionalism on the part of several cooperative banks, which calls for favourable corporate governance in this area,” Gandhi said.<br /><br />Although cooperative banks have existed for over a century, currently they hold a measly 5 per cent share in the banking system. As of 2014, there are 53 scheduled urban cooperative banks, and 31 state cooperative banks. <br /><br />‘Decade of rural banking’ <br /><br />But Gandhi lauded the significance of cooperative banks. “Being intertwined with local communities, cooperative banks are better geared to bring more customers under their fold. Built on a democratic footing, with strong local roots, cooperative banks will be in the centre of the financial inclusion scene of the country,” he said.<br /><br />Earlier, referring to the scope for developing regional rural banks (RRBs), NABARD Deputy Managing Director R Amalorpavanathan said, “This is the decade of rural banking. There is intense competition on every front — technology, service, products and payment systems. Rural banks must gear up and grow through competition (payment banks and small financial firms also pose a challenge). Urban banking has already settled in the market; now it’s the time for rural banking to lift itself up.”<br /><br /></p>
<p> Reserve Bank of India (RBI) Deputy Governor R Gandhi has called for improvement in the state of cooperative banks in India since they compete and coexist with other more ‘stable’ banking enterprises and financial institutions.<br /><br /></p>.<p>“Cooperative banks must adopt technology in a big way since it’s the need of the hour, and it will enable them to function in a better way,” he told delegates at the silver jubilee function of the National Institute for Rural Banking (NIRB) here on Friday.<br /><br />“There is an immense lack of technology being integrated into the functions of cooperative banks; they are reluctant to adopt it, until RBI and NABARD (National Bank for Agriculture and Rural Development) forced it down on them,” he added.<br /><br />Citing a slew of issues that have dogged the cooperative banking sector such as low capital, poor management, and intrusive governments, Gandhi said there is a need for them to find and recover their strengths.<br /><br />“A major concern is the decline in the cooperative character of these banks, owing to a few restrictive practices and wrong formats in voting. There is also a lack of professionalism on the part of several cooperative banks, which calls for favourable corporate governance in this area,” Gandhi said.<br /><br />Although cooperative banks have existed for over a century, currently they hold a measly 5 per cent share in the banking system. As of 2014, there are 53 scheduled urban cooperative banks, and 31 state cooperative banks. <br /><br />‘Decade of rural banking’ <br /><br />But Gandhi lauded the significance of cooperative banks. “Being intertwined with local communities, cooperative banks are better geared to bring more customers under their fold. Built on a democratic footing, with strong local roots, cooperative banks will be in the centre of the financial inclusion scene of the country,” he said.<br /><br />Earlier, referring to the scope for developing regional rural banks (RRBs), NABARD Deputy Managing Director R Amalorpavanathan said, “This is the decade of rural banking. There is intense competition on every front — technology, service, products and payment systems. Rural banks must gear up and grow through competition (payment banks and small financial firms also pose a challenge). Urban banking has already settled in the market; now it’s the time for rural banking to lift itself up.”<br /><br /></p>
