Experts call for interconnecting UCBs

Urban co-operative banks (UCBs) should start providing more value-added services to customers and interconnect their branches, experts said at a seminar.

The seminar was organised by the Federation of Urban Co-operative Banks of Saurashtra and Kutch on Monday to discuss problems the banks face and opportunities they have ahead.

Representatives of various co-operative banks from the Saurashtra and Kutch region attended the seminar which was held for the first time after the federation was formed in October last year.

Ashwinbhai Mehta, president of the federation, said there are 360 urban co-operative banks in the state and 59 of these were in Saurashtra.

"These banks should be interconnected to enhance services. They can proide integrated service. That is how they can face competition from big banks," Mehta said.

Mehta said the co-operative banks of Saurashtra and Kutch region are financially sound and self-dependent in their business. "We can provide insurance services and demat accounts. This is an unexplored area," Mehta said.

The role of each urban co-operative bank is different according to the cultural and geographical character of the area where the bank is working from, Mehta said.

There is a huge potential for the UCBs as they are working for the middle-class, Mehta said.

"When people lost their faith in co-operative banks in other areas of Gujarat, co-operative banks in this region still enjoy the faith of the people," said Jyotindra Mehta, chairman of the Rajkot Nagrik Bank Ltd.

He said. "There should be technical upgradation in co-operative banks. But sometimes the Reserve Bank of India (RBI), government officials and politicians hamper progress in this sector."

Lack of professionalism is also affecting co-operative banks, he said.

C D Patel, president of the Gujarat Urban Co-operative Banks' Federation, said, "Deposits in the banks in the Saurashtra and Kutch region have risen in spite of the Madhavpura Mercantile Co-operative Bank scam."

State finance minister Vajubhai Vala said the Madhavpura Bank scam was an isolated incident and the co-operative sector should boost the faith of the people.

"In 1967, deposits in co-operative banks in Gujarat were Rs 153 crore. It is Rs. 93,000 crore at the end of 2002. The co-operative banks in the region can grow further and the state government is ready to help the UCBs," the minister said.

"Adopt the best working methods and practices which are worth to be followed by other banks. Professional management of revenue and loans can help the sector function healthy," he said.