1 week ago
Cooperative banks demand autonomy, challenge RBI restrictions and curbs
Cooperative banks are asking the government and the RBI for more freedom to run their institutions.
Their federation president, Chalasani Raghavendra Rao, said current rules interfere too much with their work.
He argued that people have a constitutional right to form cooperative societies.
He also said no new urban cooperative-bank licences had been issued for almost 24 years.
The federation wants customers’ deposits to receive more protection than the current Rs 5 lakh limit.
It also wants the insurance premium paid by banks to be reduced.
Rao said cooperative banks help ordinary people open accounts with small amounts of money.
The federation also criticised the use of nominated committees where elections have not been held.
Chalasani Raghavendra Rao urged the Centre and RBI to withdraw what he called unreasonable restrictions on cooperative banks.
He said limits on directors’ tenure and interference in internal affairs undermined cooperative-bank autonomy.
Rao claimed the RBI had issued no licences for new urban cooperative banks for nearly 24 years.
He sought lower DICGC premiums, protection for deposits above Rs 5 lakh, and coverage for customers’ entire deposits.
The federation elected Rao as president and said elections had not been held in eight of Andhra Pradesh’s 44 urban cooperative banks.
- Who
- The Andhra Pradesh State Cooperative Urban Banks and Credit Societies Federation, led by newly elected president Chalasani Raghavendra Rao.
- What
- The federation demanded greater autonomy for cooperative banks and the withdrawal or revision of several regulatory restrictions.
- Where
- Makineni Basavapunnaiah Vignana Kendram in Vijayawada, Andhra Pradesh.
- When
- The demands were made on Sunday after the federation’s 11th annual general body meeting.
- Why
- Rao said Centre and RBI interference undermined cooperative principles and limited the development and democratic functioning of cooperative banks.
Cooperative-bank federation
Centre and Reserve Bank of India
Regulatory autonomy
Cooperative-bank federation
The federation says excessive Centre and RBI interference violates the spirit of cooperative institutions and constitutional protections for forming cooperatives.
Centre and Reserve Bank of India
The Centre and RBI have amended banking rules and imposed restrictions that the federation opposes; the article does not provide their response or stated justification.
Urban cooperative-bank expansion
Cooperative-bank federation
Rao says the lack of new urban cooperative-bank licences for nearly 24 years conflicts with the goal of having a cooperative bank in every town.
Centre and Reserve Bank of India
The RBI’s licensing position is cited by the federation, but the article does not state the RBI’s reasons for not issuing new licences.
Governance and regulation
Cooperative-bank federation
The federation opposes limits on directors’ tenure, a model-bylaws committee, and nominated committees where elections have not been held.
Centre and Reserve Bank of India
The article identifies these as existing or proposed regulatory arrangements but gives no detailed explanation from the Centre or RBI about their purpose.
Key facts
- Federation president
- Chalasani Raghavendra Rao
- Urban cooperative banks in Andhra Pradesh
- 44
- Banks without elections
- Eight
- New urban-bank licences
- Rao said the RBI had not issued licences for nearly 24 years
- Current deposit protection limit
- Rs 5 lakh
- Requested DICGC premium
- Reduction from 12 paise to eight paise
- Small account deposits cited
- Rs 200 to Rs 300
Sources
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