RBI told to protect cooperative principles
National Federation of State Cooperative Banks Limited (NAFSCOB) Chairman Konduru Ravinder Rao has stressed the need to safeguard the cooperative principles and spirit and also the farming sector.
Karimnagar: Welcoming the Banking Regulation (amendment) Act-2020 which will come into force from April 1 onwards in the country, National Federation of State Cooperative Banks Limited (NAFSCOB) Chairman Konduru Ravinder Rao has stressed the need to safeguard the cooperative principles and spirit and also the farming sector.
He was participating in the video conference as one of the panel speakers from Karimnagar DCCB office on the topic “Implication of Banking Regulation Act on Rural Cooperative Banks” organised by National Bank Staff College (NBSC), Lucknow, the training establishment of NABARD, on Wednesday.
He said that the Banking Regulation (amendment) Act was aimed at better management and proper regulation to protect the depositors and retain public faith.
The cooperative banks were bought under the control of Banking Regulation Act in the year 1966 and the administration and governance remained with the States which leads to duality in control, he said added that the new Act intends to remove the dual control by extending the provision of BR Act, 1949 relating to the professionalism of board, control over management in respect of cooperative banks.
The concept of 51 per cent of professional directors and chairman of the bank as chairman and managing director may not suit the present system of the elected board of management in rural cooperative banks, he said and suggested that the RBI can bring more professionalism by constituting a board of management and board of supervisors for better functioning of the cooperative banks.
Explaining the successful functioning of cooperative sectors in Germany, Canada, Netherlands etc, he informed the RBI authorities to adopt the German model for better functioning of the cooperatives.
“The volume of business done by cooperative banks is small, but the number is huge. We cater to the lowest clientele and help them strive for their economic and rural empowerment”, he pointed out. Stating that the cooperative banks were prepared for the new Act, he said that “the professionalism is a welcome move”. “Soon or later, it is going to happen”, he quipped. He also maintained that the NABARD was always there to guide the cooperative banks.
RBI Chief General Manager Neeraj Nigam, NABARD CGM KS Raghupathi and NABARD retired general manager K Shrivatsava were also the panel speakers.
