Andhra Pradesh: growing political interference in operation of cooperative banks, says VCB chairman

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“In the name of reforms, the Center amends the law on banking regulation and imposes several restrictions”

“In the name of reforms, the Center amends the law on banking regulation and imposes several restrictions”

Chairman of Visakhapatnam Cooperative Bank (VCB) Limited, Chalasani Raghavendra Rao, alleged that political interference was increasing in the functioning of cooperative banks, leading to the disintegration of the cooperative sector.

Addressing a press conference here on Tuesday, Mr. Raghavendra Rao said that in the name of reforms, the Center was amending the Banking Regulation Act and imposing several restrictions, to the detriment of shareholders and depositors of urban cooperative banks. The Visakhapatnam Cooperative Bank was established in 1916, and the cooperative movement and several other urban cooperative banks were started long before the establishment of the RBI. He said the bank was taking legal action against changes to the Banking Regulation Act.

Mr. Raghavendra Rao said that VCB became the largest cooperative bank in South India with a registered capital of ₹272 crore and 92,200 shareholders in the financial year 2021-22.

The registered capital of the bank ranked sixth among 1,531 city cooperative banks in the country. He stands 9 e in net income and within 15 e position in total income, in granting loans and in paying interest on deposits.

“Plan to open new branches”

The bank, which already had 50 branches in Andhra Pradesh and Telangana, was planning to open more branches, but the RBI has given no approval for the opening of new city banks in the past five years. The RBI was likely to license new branches this year.

He said the plan was to open new branches in Tadepalligudem, Amalapuram, Bhimavaram, Chirala, Ameerpet (Hyderabad) and Kommadi (Visakhapatnam). It has also been proposed to open new branches, in a phased manner, in all new districts of Andhra Pradesh.

The pandemic situation in the past two years has led to a decline in people’s savings. This would have a negative impact on the banking sector. The RBI estimated that it would take at least 12 years for the economy to recover.

Chairman Emeritus Maanam Anjaneyulu and CEO PV Narasimha Murthy were present.

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