Post offices, cooperative banks the next Amul success story in banking?

Reserve Bank of India governor Raghuram Rajan is singing from the same hymn book as Prime Minister Manmohan Singh when it comes to financial inclusion. But for those who have heard Indira Gandhi's Garibi Hatao slogan and seen the bank nationalisation in 1969, it may just be old wine in new bottle. Life has come full circle for Indian politicians and policy-makers. This time round they are not for nationalising more banks, or forcing the existing ones to increase their lending to the poor.

Read more >> Click here

Odisha Gramya Bank to open 500 new branches

Odisha Gramya Bank plans to open 500 new branches in 13 districts of the state to extend banking facilities in rural areas. 

This was stated by General Manager of the bank, M K Patra while inaugurating a loan recovery and credit linkage mela here yesterday.  Patra stressed the need for strong credit linkage to explore opportunities in goatery and poultry farming in Mayurbhanj district through women Self Help Groups (SHGs). 

Read more >> Click here

APGVB opens 1.47 lakh no-frills accounts on single day

Andhra Pradesh Grameena Vikas Bank (APGVB) has opened about 1.5 lakh no-frills accounts in eight districts of the State on a single day as part of Direct Benefit Transfer (DBT) initiative.

The 638 branches together opened 72,122 accounts while the bank’s financial inclusion machinery under branchless banking business correspondent model had opened 75,320 no-frills-accounts in 64 villages in Warangal district.

These accounts, opened with zero balance and seeded with Aadhaar cards will be Aadhaar payment bridge to facilitate electronic fund transfer like subsidies, scholarships, from concerned Government Departments. “The beneficiaries can withdraw the amount either at our branches or SBI group ATMs or through branchless banking business correspondent agents (BCAs). Our bank started issuing RuPay ATM Debit Cards and has already in place BCAs,’’ the bank said in a release on Friday.

Read more >>Click here

Nabard union cautions against recasting cooperative credit system

  

All-India Nabard Employees’ Association has said that basic features of cooperative credit structure should not be tinkered with until after an informed nationwide debate on the matter. The demand comes in the context of a Reserve Bank directive to the National Bank for Agriculture and Rural Development (Nabard) that it should pilot the reforms in the cooperative sector.

CENTRE-STATE TIES

The directive could have implications even for Centre-State relations as cooperatives still continue to be in the State list, said Jose T. Abraham, president of the employees’ association. Conferring overriding powers on the Reserve Bank to issue directions to cooperatives by superseding their elected boards impinges on States’ rights, he added.

Read more >> Click here

Cooperative bank employees federation plans nation-wide strike

The All India Cooperative Bank Employees’ Federation (AICBEF) has expressed strong reservations to the Reserve Bank of India’s move on conversion of Primary Agricultural Cooperative Societies (PACS) as Business Correspondents of Central Cooperative Banks.

AICBEF General Secretary P. Balakrishnan told Business Line that this move would wipe out the existing PACS from the rural scenario. “It is a retrograde measure and we oppose it tooth and nail. This conversion of PACS to Business Correspondents would destabilise and transfer the rural credit system to the usurious money lenders,’’ he said.

Read more >> Click here

RBI approves reforms in primary co-ops

The Reserve Bank of India (RBI) has accepted the recommendations of an expert committee on primary agricultural cooperatives to ring in far-reaching reforms in the three-tier short-term cooperative credit structure.

Assets and liabilities of primary cooperatives will now stand transferred to central/state cooperative banks.

In States where the central/state cooperative banks are fully computerised and on core banking systems, primary cooperatives will function as their business correspondents. A circular from the head office of National Bank for Agriculture and Rural Development (Nabard) unveiled the reforms to state and central cooperative banks.

Read more >> Click here

Nabard chief against splitting cooperative banks

At a time when commercial banks and Regional Rural Banks are in consolidation mode, splitting a State cooperative bank due to political reasons will make it weak, Prakash Bakshi, Nabard Chairman, said.

Speaking at an event hosted by Andhra Pradesh State Cooperative Bank Ltd (APCOB), he said bank consolidation and merger of Regional Rural Banks are being done to bring their numbers down from 196 to 61. Talks are also on for consolidating some of the large commercial banks. “Due to political reasons overnight if we put a dividing line administratively or politically, and allow a banking institution to break down into smaller ones, they will become non-viable entities,” he felt.

Read more >> Click here

Rampur first in North India to get ATM facility in co-op banks

Rampur today became the first city of North India where ATM facility will be available for people maintaining accounts in co-operative banks.  UP Minister and local MLA Mohammad Azam Khan inaugurated five co-operative bank ATMs in the city today. 

The minister said lakhs of account-holders in co-operative banks will now be able to withdraw money round-the-clock.  Mohammad Anjum Khan, Secretary-cum-CEO of the District Co-operative Bank, said Rampur has now become the first city of North India where co-operative bank account holders can also avail ATM facility.

Source >>: Click here for Economic Times, 27th July, 2013

RBI directs rural banks to become member of credit info companies

The Reserve Bank today directed regional rural bank (RRBs) to comply withCredit Information Companies Act and take immediate steps to become member of at least one of the credit information companies. 

"...it has come to our notice that a large number of RRBs are not members of any Credit Information Company as required under the Act. Therefore, immediate steps may be taken by RRBs to become members of at least any one CIC," RBI said in a notification. 

Read more >> Click here

Engaging rural customers and creating livelihoods

Muthu Veerammal, a 50-year-old lady with agricultural interests, had never used banking services until recently.

A large part of her ‘financial exclusion’ could have been because of the absence of public sector banks in the vicinity of her village — Elanthapatti, a small hamlet about 20 km from Kovilpatti, a municipality in Thoothukudi district of Tamil Nadu.

Most of the 1,400 inhabitants (from 285 households) of this village have never seen a bank branch, nor has any public sector bank tried to reach their doorstep.

The extent of financial exclusion in India can be gauged from the fact that half the country is still unbanked.

Read more >> Click here

Saraswat Co-operative looking to acquire Pune-based bank

India’s largest co-operative bank, Saraswat Co-operative Bank (SCB), has set its eyes on yet another distressed urban co-operative bank for possible acquisition. The bank is conducting due diligence on the Pune-based Rupee Co-operative Bank, said a senior SCB official. Since 2006, SCB has aggressively pursued an inorganic growth strategy.

So far, it has acquired eight loss-making urban co-operative banks, including Maratha Mandir Co-operative Bank, Mandvi Co-operative Bank, Nashik Peoples Co-operative Bank and South Indian Co-operative Bank.

The century-old Rupee Co-operative Bank has 35 branches, four extension counters and seven ATMs, all in Maharashtra. Currently, SCB has 242 branches and 168 ATMs spread across six States — Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi. It has deposits and loans aggregating about Rs 22,000 crore and Rs 14,000 crore, respectively.

Read more >> Click here

Himachal Pradesh to have 800 new rural bank branches by 2016

Himachal Pradesh government proposes to open about 800 new bank branches in rural belts and remote corners of the State by 2016 under a comprehensive Financial Inclusion Plan. 

Addressing a meeting, State Chief SecretarySudripta Roy also said banks will provide fresh loans amounting to Rs 11,548 crore during the current financial year in Himachal Pradesh. 

Read more >> Click here

RRBs' lending norms against gold coins, ETFs tightened

The Reserve Bank of India (RBI) today tightened norms for lending against gold coins as well as units of gold ETFs and mutual funds by Regional Rural Banks (RRBs) with an aim to curb demand for the precious metal.

“...it is advised that while granting advance against the security of specially minted gold coins sold by banks, RRBs should ensure that the weight of the coin(s) does not exceed 50 grams per customer...,” a RBI notification said.

Earlier, the RBI had imposed similar restrictions on commercial banks and NBFCs.

Read more >> Click here

Grameen Bank’s proposed split sparks criticism in Bangladesh

A Bangladeshi commission has proposed the Government takeover or split the Nobel-award-winning Grameen Bank into 19 parts, sparking criticism with several analysts fearing it to be a systematic move to destroy the pioneering micro lending agency.

The government commission has released a working paper on restructuring Grameen Bank, founded by Nobel Laureate Muhammad Yunus.

The paper says Grameen should be broken up into 19 separate organisations to decentralise the bank’s operations and management. It also suggested Grameen’s legal status be amended with the Government owning at least 51 per cent.

Read more >>Click here

Co-operative banks look to ramp up their technology

Co-operative banks look to reform their processes, by increasing technological involvement. The homely bank next door is supposed to change very quickly, but without compromising on the highly customized and detailed banking model that it utilizes, as the co-operative banking sector plans for some major technological modifications.

The co-operative banking sector has been a great tool for the average Indian since a very long time. Highly customizable operations, great familiarity with the clients, low technological usage and an old school working environment have characterized the sector ever since it came into existence, and this is precisely the image that an individual would carry about it. 

Read more >>Click here

RBI puts restrictions on co-op banks for loans against gold coins

The Reserve Bank of India has extended the restriction on advance against gold on co-operative banks as well, a move aimed at curbing the demand for gold.

In a notification, the RBI said while granting advance against the security of specially minted gold coins sold by banks, state/central co-operative banks “should ensure that the weight of the coin(s) does not exceed 50 grams per customer.’’

Also, the amount of loan to any customer against gold ornaments, gold jewellery and gold coins (weighing up to 50 grams) should be within the board approved limit. Earlier, similar restrictions were imposed on commercial banks.

Read more >>Click here

13 cooperative banks go belly up in 2012-13

As many as 13 cooperative banks failed in 2012-13, resulting in credit insurance company DICGC paying nearly Rs 160 crore to depositors. 

Among the 13 cooperative banks, which failed to repay deposits to customers, nine are from Maharashtra, two from Gujarat and one each from Andhra Pradesh and Odisha. 

Under the norms of Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the Reserve Bank of India (RBI), a maximum of Rs 1 lakh is paid to a depositor in case a bank goes insolvent. 

Read more >>Click here

Design banking products for rural people: Nabard chief

With tiny landholdings in rural India growing, there is a need to develop banking products for farmers that will help in capital formation, according to the Nabard Chairman.

“Rural and urban banking require different kinds of products and processes,” Prakash Bakshi, Chairman, Nabard (National Bank for Agriculture and Rural Development), said after inaugurating the new campus of Bankers Institute of Rural Development (BIRD) here on Friday.

BIRD is an autonomous training institute of Nabard.

Referring to fragmentation of landholdings in the country, he said that the farmland in the country, which was around 141 million hectares four decades ago, has remained almost the same.

Read more >>Click here

Cobrapost: NABARD chief gives clean chit to co-operative banks

Amid allegations of co-operative banks being used as conduits for money laundering, NABARD, which jointly regulates such lenders, has said that it has found no shortcoming pointing towards any such activity. 

"Every year we do an inspection and we have not found anything like that," National Bank for Agriculture and Rural Development's (NABARD) chairman Prakash Bakshi told PTI over the weekend, when asked about the recent controversy over money laundering. 

Read more >>Click here

SC liberates cooperative banks from state control

In a landmark judgment, theSupreme Court has freed the management ofcooperative banks from the unwritten control of political masters in states despite being brought under the supervision of the Reserve Bank of India through a 1965 law.

Ruling parties have regularly interfered to ensure that people close to them are elected directors of these cooperative banks and have also exerted pressure on Registrar Cooperative Societies to supersede cooperative bank managements if the management did not honour their wishes.

A bench of Justices K S Radhakrishnan and Dipak Misra told the supervisory body that it would be personally liable for succumbing to political pressure to supersede elected board of directors of cooperative banks.

Read more >>Click here