Ap Cooperatives Registrar Bids To Pacify Depositors

Even as the public sector banks stepped up their campaign to underscore the safety of funds parked with them vis-a-vis the cooperative urban banks, the Registrar of Cooperative Societies (RCS) appealed to the co-operative bank depositors not to panic.

The RCS, in a lengthy statement, explained that the cooperative banks conduct banking functions like commercial banks after obtaining the license from the Reserve Bank of India and the deposits are insured with Deposit Insurance and Credit Guarantee Corporation of India.

All provisions of banking regulation act are applicable to the cooperative urban banks on par with commercial banks," the statement tried to allay the fears of the depositors.

 

Referring to the adverse publicity on the urban banks in a section of the media, the RCS said, the public should not be misled by rumours and incorrect statements about the urban cooperative banks. "There is no need for the depositor to feel panicky regarding his deposits," the RCS emphasised.

When a bank is categorised as a weak bank, it does not mean that it is under liquidation. It also does not mean that it is not functioning.

A weak bank may mean that a particular bank is not having adequate capital base or its recovery position needs to be strengthened. It does not mean that the bank will not be able to honour its financial commitments.

A scheduled bank like Vasavi Co-operative Urban Bank has stabilised in all respects and has stepped up recoveries, the RCS tried explained to reassure the depositors.

Meanwhile, the state unit of the United Forum of Bank Unions, an all-India body of public sector bank officers, has pointed out that the body has been opposing the mushrooming of co-operatives and local banks for quite some time now.

With rapid privatisation of public sector banks, more and more Krushi Banks will surface, the state president of the forum, B S Rama Babu, said.

The RCS also appealed to the press to refrain from publishing any news without verification of the genuineness of the news from the concerned authorities.

Wrong and incorrect press coverage will cause serious harm to the bank and ultimately to the interests of the depositors and public, the RCS said.