Managing urban co-op banks

Changing the regulatory structure alone won't be enough

Big changes are afoot in how urban co-operative banks (UCBs) are regulated. According to a report in this newspaper, large UCBs are expected to come solely under the provisions of the Banking Regulation (BR) Act. The move will affect over 1,500 Indian UCBs, with deposits in excess of Rs 4.5 trillion. This is a fairly important sector of the financial system — about 11 per cent of the deposits in scheduled commercial banks, or SCBs, in 2017 — but it has for decades suffered under a problem of divided regulation. The Registrar of Co-operative Societies (RoCS) is currently the nodal