Urban banks' body holds meet

The Andhra Pradesh State Cooperative Urban Banks Federation organised a workshop on 'Implications and consequences of banking regulation (amendment) & Miscellaneous provisions bill 2003' here on Monday.

P R Gopal Rao, the banking ombudsman for Hyderabad region, who inaugurated and delivered the keynote address, stressed the need to update the skills of the functionaries of the urban cooperative banks.

Speaking about the importance of the bill, he said that if it was approved by the parliament, all the cooperative banks would look like commercial banks.

The UCBs in the country should function like the community banks in US so that they can come out of problems, he advised.

D Krishna, the chief executive of the National Federation for Cooperative Urban Banks and Credit Societies, explained that if the bill was passed in its present shape, the Reserve Bank of India (RBI) would have irrevocable powers on the management issues, which would be disastrous.

He further said that scrapping of the Section 56 of BR Act would undo all the concessions that were extended to cooperative banks.

G Rama Moorthy, the chairman of the Andhra Pradesh State Cooperative Urban Banks Federation, said that there should be a clear cut division of functions between the RBI and the Cooperative department.

He asked that the cooperative department should not be allowed to encroach upon the banking related functions.

Though the bill is aimed at cutting the role of registrars with respect to banking-related functions, it ingresses into the management issues.

Rama Moorthy also said the cooperative character of the urban cooperative banks need to be protected.