Social media: Marathe raises debate on future of credit co-ops

Link : http://www.indiancooperative.com/from-states/social-media-marathe-raises-debate-on-future-of-credit-co-ops/

Veteran cooperator and former President of Sahakar Bharati Satish Marathe has raised a debate on social media about the future of urban cooperative banks and credit cooperative societies. While several of his friends on Facebook agreed with him, there were some who thought it unrealistic.

Marathe worte “Small Finance Banks ( SFBs) and Payment Banks (PBs) together will open about 3600 Branches in the very first year of operation. Collectively, SFBs and PBs would bring in Rs 7400 crore as capital.

Entry of these new categories of banks will be a big threat to the existing Urban Co-op Banks.

Unless the UCBs quickly refashion their internal working, reduce operating costs, improve productivity, concentrate on capacity building, fully harness technology and particularly make available emerging payment gateways eg IMPs ( Mobile Payment ), e- Wallets, Internet access, etc , there is every chance of UCBs losing a large chunk of their secure and profitable business.

Business of the well run Dist Central Banks and large Credit Co-operative societies will also be affected by the entry of these new banks, particularly SFBs.

It is a wake-up call for the Co-Op Banking Sector.”

Kashinath Ranade, one of Marathe’s friends says “Just see the history some of the known co-op banks that are under moratorium. Some are struggling to remain under RBI’s norms for payment of dividend to share holders and adopting various tactics to remain within RBI’s norms.

Another friend Makarand Khanolkar felt “I honestly think that this is a pseudo threat. Neither the SFBs nor PBs nor Post offices would be able to provide the service a Co-op Bank does. Yes, I do agree that more transparency is required for survival in the Banking Sector.

Agreeing to Marathe’s point of view one of his FB friends wrote” Add to it the proposal of post office getting converted into banks. With their ubiquitous presence in villages, UCB may become an endangered species.”

Banks, insurers to align with global accounting rules from April 1, 2018

Link : http://www.thehindubusinessline.com/economy/roadmap-announced-for-ind-as-implementation-by-banks-insurers/article8123347.ece

Centre announces roadmap for implementing Ind AS in the financial sector

NEW DELHI, JAN 19:  

The Centre has announced the much-awaited roadmap for implementing the Indian Accounting Standards (Ind AS) by banks, insurers and non-banking finance companies (NBFCs).

Ind AS are a set of accounting standards developed by Indian authorities, which converge with the International Financial Reporting Standards (IFRS).

According to the roadmap, scheduled commercial banks (excluding regional rural banks) and insurers, will be required to prepare Ind AS-based financial statements for accounting periods beginning April 1, 2018. This would have to be done with comparatives ending March 31, 2018 or thereafter.

Ind AS would be applicable to both consolidated financial statements. The roadmap would also apply to all-India term-lending refinancing institutions, such as Exim Bank, NACAS, NHB and SIDBI, an official release said.

Urban cooperative banks and regional rural banks are not required to apply Ind AS and can continue to comply with the existing standards for the present, the release added.

The new roadmap is being implemented as a follow-up of the 2015-16 Budget announcement made by Finance Minister Arun Jaitley. Also, the Centre has now stipulated that commercial banks cannot voluntarily adopt Ind AS prior to the roadmap date.

The roadmap also clarifies that holding company, subsidiary, joint venture and associate entities of commercial banks, insurers and NBFCs will also have to comply with the standards.

NBFCs have been asked to prepare Ind AS-based financial statements in two phases.

Under phase I, NBFCs having net worth of ₹500 crore or more would have to prepare the statements for accounting periods beginning April 1, 2018.

Under phase II, NBFCs whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and have net worth less than ₹500 crore should prepare the statements from April 1, 2019.

The same roadmap will apply to unlisted NBFCs having net worth of ₹250 crore or more, but less than ₹500 crore.

srivats.kr@thehindu.co.in

Karimnagar Co-op Urban Bank penalized

http://www.indiancooperative.com/co-op-news-snippets/karimnagar-co-op-urban-bank-penalized/

The Reserve Bank of India has imposed a monetary penalty on The Karimnagar Co-operative Urban Bank Ltd., Karimnagar, Telangana, in exercise of the powers vested in it.

The UCB was found guilty of violation of guidelines and directives of Reserve Bank of India on loans and advances to directors and their relatives.

The Reserve Bank of India had issued a show-cause notice to the bank, in response to which the bank submitted a written reply.

After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of penalty.