Mumbai: There is a need for an umbrella
organisation for urban cooperatives to support them in many
ways including extending emergency liquidity support, the
Reserve Bank has said.
"The working group is convinced that there is a strong
case for a similar (like other countries) umbrella
organisation for urban cooperative banks, as also for
a an emergency liquidity support facility for banks
confronting liquidity problems," said the RBI's report of the
working group on umbrella organisation and constitution of
revival fund for urban cooperative banks (UCBs).
The banking regulator has been working to promote several
institutional mechanisms in the interest of financial
stability and this is yet another area where it can play an
important role in strengthening urban cooperatives as a part
of banking sector reforms, the report said.
Accordingly, the working group has made recommendations
for constituting an umbrella body for UCBs as also for an
emergency funds facility.
Internationally, cooperative banks, popularly called
credit unions, operate in networks and have an entity that
provides a wide range of services to them such as fund
management, lines of credit, asset management, payment and
settlement gateways among others.
Bureau Report
First Published: Tuesday, November 17, 2009, 21:22