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Urban cooperative banks protest ‘vilification’ by Centre

Vidyadhar Anaskar, president of the Maharashtra State Urban Cooperative Banks Federation, said this effort was to scare off the depositors of the UCBs, seemingly with the indirect support of the RBI.

Urban cooperative banks (UCB) have strongly protested against what they called a “concerted effort” to defame them by the Union government. Vidyadhar Anaskar, president of the Maharashtra State Urban Cooperative Banks Federation, said this effort was to scare off the depositors of the UCBs, seemingly with the indirect support of the Reserve Bank of India (RBI).

Anaskar pointed to the annual report of the RBI as well as the reply given by the Union Finance Minister Nirmala Sitharaman to a question asked by Rajya Sabha member M Shanmugam. RBI in its annual report 2020-21 mentioned the number of frauds that had happened in UCBs but had not mentioned the quantum of money involved in the frauds. The RBI’s report said scheduled commercial banks had reported 7,363 frauds involving Rs 1,38,422 crore.

Similarly, in her reply, Sitharaman stated UCBs had reported 323 cases of fraud while the district central cooperative banks and the state cooperative banks had reported 482 cases. However, the reply has been silent about the money involved, Anaskar said.

Based on information issued by the RBI in response to an RTI petition, Anaskar said that the money involved in frauds of UCBs is just about Rs 1.80 crore, which is negligible as compared to the frauds committed in commercial banks. The country has 1,539 UCBs, of which 498 are in Maharashtra.

The apex bank in January 2020 also revealed that the total money involved in frauds committed in UCBs in the last five years was Rs 220 crore, of which the cyber heist at Pune’s Cosmos bank alone accounted for Rs 95 crore, he said.

RBI’s own data, Anaskar said, pointed to the fact that 95 per cent of the UCBs in the country are in green in terms of all the banking parameters. Non-performing assets (NPA) of the UCBs in 2019 was 7.29 per cent while that in 2020 was 10.96 per cent. The same for Commercial banks was 11 per cent and 12 per cent respectively.

“If one considers data, the UCBs are in a much better state than the commercial banks. However an effort is made to paint them black and we feel this is to scare depositors from UCBs to commercial banks,” he said. The RBI has recently taken over substantial control of the cooperative banks and also delicensed some bad banks.

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