Co-op banks still hold peoples' trust: report

Though seven co-operative banks have collapsed in the city in the last two years, a Reserve Bank of India (RBI) report indicates that co-operative banks have managed to sustain the trust of the people.

According to the RBI trend & progress report for 2003-04, there are 192 urban co-operative banks (UCBs) in the country with deposits of over Rs 100 crore.

At the same time, there are nine UCBs with deposits in excess of Rs 1,000 crore. Of the 1,539 reporting UCBs, 544 banks have deposits of less than Rs 10 crore, while 401 have deposits of over Rs 10 crore, but less than Rs 25 crore.

The report says the total deposits of co-operative banks have witnessed a jump of eight per cent at Rs 1,10,256 crore on March 31, 2004.

The deposits of scheduled co-operative banks increased from Rs 36,683 crore on March 31, 2003, to Rs 39,274 crore on March 31, 2004.

The RBI report also states that UCBs have managed to achieve a balance between deposits and loan advances. Along with the increase in deposits, the loan advances of UCBs also jumped up by around three per cent and stood at Rs 67,930 crore as on March 31, 2004.

According to RBI guidelines, a minimum 60 per cent of any bank's advances should go to the priority Sector. As per the report, UCBs' advances to the priority sector stood at Rs 42,683 crore, constituting 62.1 per cent of the total advances.

The investments of all UCBs stood at Rs 48,220 crore as on March 31, 2004.

The report states that co-operative banks have taken effective measures for loan recovery. While their gross non-performing assets stood at 19.0 per cent of the total deposits on March 31, 2003, it came down to 17.6 per cent on March 31, 2004.