Initially, a question arises as to what makes it special with urban cooperative banks from other regular commercial banks or what separates them slightly from the broader concepts of banking, the various banking products and various services offered by the modern commercial banks coupled with the most characteristic top quality and levels of banking services – punctual, fast, responsive and fully responsive to customers. The basics of borrowing and lending or depositing from the public and advancing money to people – individuals, business establishments, industrial units, agriculture and various sectors – apply to all banks. This in itself generates revenue for the banks to remain self-sufficient by making a profit in the process and paying the cost of deposits to the public in the form of deposit interest.
Basically, when the current banking network did not exist in the country, the role of urban cooperative banks took on its own importance as these banks played a commendable role in meeting the financial needs of city dwellers comprising of wage earners, artisans , Workers. , small traders, etc. mainly for a larger purpose of breaking the monopoly of small moneylenders who otherwise used to have fun and even make hay while the sun kept shining. Basically, it can be admitted that these banks have inculcated the habit of savings and savings in the people. However, it can also be said that almost no one except an artisan, a small business or a commercial establishment has obtained an advance facility and that the concept of retail advances n has made no inroads into the core banking business. These banks have therefore played a commendable role.
Union Cooperation Minister Amit Shah, however, recently recalled how small loans of a few hundred thousand rupees granted by these bans on urban cooperatives have made the fortunes of many. The Union Minister made these observations in his address to the National Convention of Urban Cooperative Banks. Since until 1996, these banks were only allowed to lend money for non-agricultural purposes, but their horizon of expanding their banking operations and offering multiple banking products has widened, their performance overall not being up to par both in terms of deposits and advances. portfolio about which the Minister for the Union also asked them to explain the role of their contribution vis-à-vis the other banks. The current position therefore required constant revisions and the introduction of innovative programs, transparency in recruitments, periodic training of employees and rapid digitization and the introduction of digital technology.
Without the adoption of modern banking methods and operations, it would become difficult to remain in competitive mode and to increase its market share proportionately. Since the main premise to remain in working order is to force dividends to be paid to the company, the main element of the cost of deposits is crucial. Therefore, these urban cooperative banks need to focus on and mobilize low-cost deposits. Small savings accounts should therefore remain the primary focus. Jan Dhan Scheme has shown the vast potential of small savings in the country as to date nearly Rs.2 lakh crore of deposits under the scheme from almost 45 crore account holders was by no means a development insignificant. Therefore, to stay relevant in today’s fast-paced banking scenario, dedicated staff, performance, better customer services, attractive banking products, transparency, minimum NPAs and zero frauds alone dominated.
The country has an extensive network of city cooperative banks, scheduled city cooperative banks, multi-state cooperative banks, state cooperatives, cooperative credit societies, etc. presence of commercial banks, most of which are UAPs. Competition cannot be seen as confirming “equal and open field” due to additional resources and infrastructure with the “big” banks. Moreover, more banks have created problems or even resorted to unauthorized means simply to survive. The assumption that a small depositor or lender is not treated well at “big” banks is no longer universally true today. While still UCBs need to change and take quick steps to use modern techniques and solutions, at the same time more bank mergers would be desirable for sound operation of banks and to anticipate multiple financings on the same asset .