Co-op bank officials take lessons in banking

Officials of over 100 co-operative banks across the state, including chairmen and managing directors, received lessons in profitability, adopting prudency norms and how and when to use provisions of the Securitisation Act to recover dues, at a day-long education seminar in banking organised by the Gujarat Urban Co-operative Banks Federation.

Some key issues discussed at the seminar included how profitability of co-operative banks can be increased, legal aspects of the Securitisation Act, the reach of ATM network of co-operative banks in Gujarat and what procedures must be followed while setting up an asset reconstruction company under provision of the Securitisation Act.

"Over 500 delegates took part in the seminar. Although there is a growing awareness regarding various rules governing co-operative banks, an educative seminars like this will go a long way in ironing out practical difficulties that banks face while recovering dues," said C D Patel, president of the federation.

Deputy commissioner of police, Ahmedabad city, Ajaj Tomar, also attended the seminar and briefed the bankers on various options available to them to recover dues.

The organisers said this was beneficial to the banks as they required police to escort them while attaching properties.

The federation vice president R S Patel presented a paper on how co-operative banks can use provisions of the Securitisation Act.

Ghanshyambhai Amin, chairman of Co-operative Bank of Ahmedabad (Abad Bank) said recovery has become fast and smooth with the Securitisation Act in place.

"It is not that co-operative banks are not using provisions of the Act. Take the case of MMCB and Abad Bank. Both these banks have attached several properties under the Securitisation Act and have even sold these through auctions to recover dues of defaulters," said Amin. The federation president C D Patel said the issue of recovery of dues is of prime importance.

"The very fact that dues can be recovered without approaching the courts is encouraging. Most bank officials said they have used provisions of the Securitisation Act while recovering dues, but the seminar helped them sort out some practical issues," he said.

Provisions of the Securitisation Act cannot be used if 80 per cent of the loan, including the principal and interest, has been repaid and banks can initiate proceedings under the act only after a 90-day default period.

Proceedings must be initiated only after completing a study on whether any other method can be used to recover dues.