Urban Co-op Banks see business doubling in 5 years

Urban Cooperative Banks (UCBs) in India see doubling of business from Rs 1.8 lakh crore to Rs 3.6 lakh crore in next five years, after the convergence of core banking solutions (CBS) across the sector.

Co-operative banking in India is passing through a major makeshift as the sector is gearing up to recover from its scandalous past, and as one of the key structures to achieve financial inclusion in the country. National Federation of Urban Co-operative Banks & Credit Societies Ltd (NUCBCS) and Gujarat Urban Co-Operative Banks Federation (GUCBF) will launch ‘Core Banking Solutions’ for the UCBs, under ‘COOP CORE – 2010’ on 25th & 26th December, 2010 at Ahmedabad.

In a media briefing to announce the launch, H K Patil, president, NFUCBCS, New Delhi said, “There have been CBS in UCBs in some parts of the country. But COOP-CORE enable all 1674 UCBs and its branches in the country to connect under CBS by 2011.”

With CBS, all repetitive and mundane jobs is expected to be shifted to one central location, which means there is an operational efficiency that provides indirect avenue on reduction of operational cost. Patil further mentioned that CBS would bring-in transparency in operations and will add to the convenience of the customers. “CBS enables banks to inter-connect all their branches which then enable customers to operate their accounts and avail banking services from any branch of the bank in the country, regardless of where he maintains his account,” he said.

Elaborating on how CBS would benefit banking operations, Jyotindra Mehta, chairman, GUCBF said, “Implementing CBS helps a bank not only achieve automation but also assists it in centralizing and consolidating operations and at the same time standardizing branch processes. It also helps a bank consolidate its back office through centralization and maintain standardized operations across branches. With centralization, a set of standards are created throughout a bank.”

“To rollout CBS technology for the member banks, we have selected four CBS vendors viz ‘C-Edge Technology Ltd,’, ‘Mindmill Software Ltd.’, ‘Tata Consultancy Services Ltd’ and ‘Theme Technologies Ltd’ after a highly transparent and scientific selection process,” Patil said.

The UCBs in India have total deposits of Rs 1.82 lakh crore, while the advances amount to Rs 1.10 lakh crore. Nationally, the gross no- performing assets (NPAs) are seen at 13%, which according to the industry experts has improved significantly from the more than 20% rate in the past.