Urban Cooperative Banks (UCBs) strongly protested what they called a “concerted effort” to defame them by the Union government. Vidyadhar Anaskar, chairman of the Maharashtra State Federation of Urban Cooperative Banks, said the effort was aimed at scaring depositors from UCBs, apparently with indirect support from the Reserve Bank of India (RBI).
Anaskar highlighted the RBI’s annual report as well as the response given by Union Finance Minister Nirmala Sitharaman to a question posed by Mr. Shanmugam, member of the Rajya Sabha. RBI in its 2020-21 annual report mentioned the number of frauds that had occurred in UCBs but did not mention the amount of money involved in the frauds. The RBI report said that scheduled commercial banks reported 7,363 frauds involving Rs 1,38,422 crore.
Likewise, in its response, Sitharaman said that UCBs reported 323 cases of fraud while district central cooperative banks and state cooperative banks reported 482 cases. However, the answer is silent on the money involved, Anaskar said.
Based on information released by the RBI in response to an RTI petition, Anaskar said the money involved in UCB frauds is around Rs 1.80 crore, which is negligible compared to the frauds. committed in commercial banks. The country has 1,539 UCBs, of which 498 are in Maharashtra.
The umbrella bank in January 2020 also revealed that the total amount involved in fraud committed in UCBs over the past five years was Rs 220 crore, of which the cyber-robbery at Cosmos bank in Pune alone amounted to Rs 95 crore, he said.
RBI’s own data, Anaskar said, highlighted the fact that 95% of the country’s UCBs are green in terms of all banking metrics. Non-productive assets (NPA) of UCBs in 2019 were 7.29% while in 2020 they were 10.96%. The same for commercial banks was 11 percent and 12 percent respectively.
“If you look at the data, UCBs are in a much better shape than commercial banks. However, an effort is being made to paint them black and we believe this is to scare depositors from UCBs to commercial banks, ”he said. The RBI recently took substantial control of cooperative banks and also cut some failing banks.
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