RBI Deputy Governor Murmu calls for professional boards at co-op banks

Deputy Governor Shirish Chandra Murmu calls for robust internal controls, greater technology adoption and timely resolution of weak urban cooperative banks

Cooperative (co-op) banks must have professional and fit-and-proper boards and senior management, robust internal controls, greater technology adoption and timely resolution of weak lenders, Reserve Bank of India (RBI) Deputy Governor Shirish Chandra Murmu said on Tuesday.

 

“While cooperation has deep roots in India, a cooperative society, once licensed as a bank, assumes greater responsibilities and accountability,” Murmu said. He was speaking at the Third Conference of Registrars of Cooperative Societies (RCSs), hosted by the RBI at its New Delhi office on Tuesday.

 

The conference brought together RBI Deputy Governors Swaminathan J and Murmu, Central Registrar of Cooperative Societies (CRCS) Shiv Pal Singh, Registrars of Cooperative Societies from various states and senior RBI officials.

  

Murmu stressed the need for stronger governance and institutional capacity in urban cooperative banks (UCBs), along with greater technology adoption and effective internal controls. He also called for timely resolution of weak UCBs.

 

RBI Deputy Governor Swaminathan J emphasised closer coordination between the central bank and the RCS/CRCS authorities and timely action where required.

 

He also highlighted the need to strengthen controls against cyber-enabled frauds and money-mule accounts.

 

Swaminathan referred to Mission Sahakar Bank Kshamta Nirman (SAKSHAM) as an initiative aimed at capacity building in the cooperative banking sector.

 

CRCS Shiv Pal Singh also stressed the need for closer coordination between cooperative authorities and the RBI, continued professionalisation of UCBs and timely resolution of banks under liquidation.

 

The discussions at the conference covered governance, regulatory and supervisory issues concerning UCBs, including the expectations of the RBI and the Deposit Insurance and Credit Guarantee Corporation (DICGC).

 

The conference comes as the RBI and cooperative authorities seek to strengthen governance and institutional capacity in the UCB sector. They also sought greater emphasis on professional management, internal controls, technology and resolution mechanisms.