The federation of urban cooperative banks today rejected the report of the RBI committee on UCBs alleging that its recommendations would have adverse impact on growth of the banks.
Chairman of the National Federation of Urban Co-operative Banks and Co-operative Credit Societies (NAFCUB), Mukund Abhyankar said the general body at its meeting has already passed a resolution to reject the recommendations of the committee, specifically relating to conversion of urban cooperative banks into joint stock companies.
He said every UCB will also pass resolution against the report and submit the same to RBI so that the recommendations are not implemented.
"RBI instead of addressing our concerns and issues is following a policy to shrink the urban cooperative sector by proposing conversion into commercial banks, which can not be accepted," Abhyankar said.
"The cooperative sector is very important for financial inclusion and growth of the nation. This report is not in the interest of the cooperative sector. Therefore, any move against the cooperative movement will be opposed."
Terming the move as 'a policing act', Abhyankar wanted the central bank to advise and guide lenders so that they can strengthen themselves.
CEO of the NAFCUB Subhas Gupta voiced strong opposition of the sector to the recommendations, which he said are aimed at weakening the growth of UCBs.
"We request the RBI Governor, the central and the state governments not to accept the recommendations of the high power committee in the larger interest of the cooperative movement of the country," Abhyankar said.
The RBI committee headed by R Gandhi made the recommendations last month on the business size, conversion of UCBs and issue of fresh licences, among others, last month.
