Coming down hard on cooperative banks, RBI Deputy Governor R Gandhi today said their share is below 5 per cent despite large number, as they have not kept pace with technological advances and lack professionalism.
Gandhi feels cooperative segment's true potential has not been fully achieved.
"....Even with such a large number of cooperative banks, considering the total asset size, their share of the Indian banking sector is not more than 5 per cent, that means the true potential has not been fully achieved," Gandhi said.
He was speaking at a silver jubilee function of National Institute for Rural Banking here.
Gandhi cited reluctance in adapting new technology, decline in cooperative character, lack of professionalism and lack of corporate governance in cooperative institutions as the major factors behind unsatisfactory growth in the sector.
"A view needs to be taken whether a fresh round of cooperative bank licensing is due, as well as they can put in place a definite migration process for well managed cooperative banks to make their transition," Gandhi said.
"...I'm heading that committee...We are looking into it," he added.
Speaking to reporters on the sidelines of the event, Gandhi declined to comment on rate cuts and inflation.
On capital availability being serious concern for banks, he said: "We have been voicing about the need for banks to shore up their capital, because they are all clearing the minimum capital requirement today..."
"But we are looking forward for the years to come because there is continues increase in their business and the way the banking has to expand, naturally they will require additional capital...Basal III norms also require them to raise further capital," he added.
On whether RBI is looking into the Yes Bank Boardroom tussle, Gandhi said: "It is in the court. As per the court, the bank will have to follow. Our role as of now immediately is not there...Court decision bank will have to comply with."
Asked if there were any takeovers happening at all by the banks with regard to debt conversion scheme, he said: "It cannot be happening so soon, because lot of back room efforts the banks will have do."
On new banking licences, Gandhi said "the process is on, that's a very tedious process...It will be our best efforts to bring it by end of August, will work on that.
