Rajasthan: Two of the Urban Co-Op banks penalized

The Reserve Bank of India has imposed a monetary penalty on the Rajlaxmi Mahila Urban Co-operative Bank Limited based in Jaipur.

The urban cooperative Bank was found violating the RBI directives on unsecured advances, IRAC norms and OBC charges.

The apex Bank had issued a Show Cause Notice to the bank in response to which the latter submitted a written reply.

After considering the facts of the case, the bank’s reply and also personal submissions in the matter, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty. Accordingly, it penalized the bank.

Similarly RBI has also imposed a monetary penalty on Rajasthan Urban Co-operative Bank Limited for violating the RBI directives on individual and group exposure ceiling, IRAC norms and window-dressing.

After thorough investigation of the matter, RBI came to the conclusion that the bank deserves penalty.

Courtesy : www.indiancooperative.com

Central Order on DA (Pre Revised)

Coop banks look at FM for tax deductions in Budget

While the year 2012 is being celebrated as the United Nations International Year of Cooperatives, all eyes among Indian co-operatives are on Union Finance Minster, Pranab Mukherjee in anticipation of some relief in the upcoming union budget for the year 2012-13.
The cooperative banks (UCBs) have demanded restoration of income tax deduction for all cooperative banks under section 80 (P) of the Income Tax Act.
The deduction under section 80 P was available to all cooperative banks up to and including assessment year of 2006-07, post which, the government imposed income tax on cooperative banks by introducing section 80(P)(4).
In a letter written to the Finance Minister on January 23, 2012, National Federation of Urban Cooperative Banks and Credit Societies Ltd (Nafcub) has demanded restoration of the income

RBI asks urban co-op banks to get ready for IFRS

Related RBI Circular

The Reserve Bank today asked urban co-operative banks (UCBs) to take necessary steps to ensure smooth transition to new international accounting norms IFRS from April 2014.
"UCBs are advised to take necessary steps to ensure that they are in readiness to adopt to IFRS convergence IAS from April 1, 2013, or April 1, 2014, as the case my be," the Reserve Bank of India (RBI) said in a notification.
It said that banks and NBFCs should upgrade their skills, manage information system and technology capabilities for smooth transition to new financial reporting standards to manage complexities and challenges of international standards.
According to a roadmap of the Corporate Affairs Ministry, all large commmercial scheduled banks are mandated to prepare their books of accounts according to the International Financial Reporting Standards (IFRS) from April 1, 2013.
Besides, smaller urban cooperative banks and non-banking finance companies are to converge their opening balance sheets with IFRS from April 1, 2014.
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Courtesy / Source : http://business-standard.com/india/news/rbi-asks-urban-co-op-banks-to-get-ready-for-ifrs/159688/on

RBI raises bank rate to 9.5% for Urban Co-op Banks

Mumbai, Mar 7: 

The Reserve Bank has hiked bank rate for Primary (urban) Co-operative Banks by 3.5 per cent to 9.5 per cent with effective from February 13, 2012.

”...it is determined that the bank rate should normally stay aligned to the MSF (marginal standing facility) rate.

“Accordingly, it has been decided that with effect from the close of business of February 13, 2012, the bank rate (for UCBs) will stand increased by 350 basis points, from 6 per cent per annum to 9.50 per cent per annum,” RBI said in a notification today.

As the bank rate is a discount rate, “it should technically be higher than the policy repo rate,” said a notification issued to CEOs of all Primary (Urban) Co-operative Banks.

The RBI repo rate currently stands at 8.5 per cent while reverse repo rate is at 7.5 per cent.

Bank rate is the standard rate at which the Reserve Bank buys or re-discount bills of exchange or other commercial paper.

It is used as a penal rate which the banks have to pay for their failure to meet the mandatory Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).

Earlier on February 13, 2012, RBI had increased the bank rate for all scheduled commercial banks to 9.5 per cent from 6 per cent, after a gap of nine years.

The bank rate has been kept unchanged at 6 per cent since April 2003.

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Courtesy / Source : http://www.thehindubusinessline.com/industry-and-economy/banking/article2970549.ece?homepage=true&ref=wl_home

RBI: Weak urban co-operative banks may lose licence

Link to RBI Circular : Circular on Supervisory Action Framework (SAF) dated 01.03.2012

MUMBAI: The Reserve Bank of India on Thursday directed the management of urban co-operative banks to keep their financial positions strong, failing which, it said, it could resort to tough measures, including cancelling their licences.
If a co-operative bank's deposit erodes beyond 25%, the central bank would issue a showcause notice for cancellation of the licence of the bank concerned, which it calls supervisory action. Other conditions are not specific.
The action "would increase in terms of severity as the financials deteriorate and could include restriction on pre-mature withdrawal of deposits, freeze on the level of advances/deposits, prohibition in

E.P.Sreekumar & A.V.Usman will lead Kerala CEOs' fourm

Sri. E.P.Sreekumar (Thrippunithura Peoples urban cooperative bank) was elected as the President and Sri. A.V.Usman (Ponnani Coop Urban Bank) was elected as the General Secretary of the Kerala  Coop Urban Bank Chief Executives' Forum in its General Body meeting held at Thiruvananthapuram on 14th February. 
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കേരളത്തിലെ സഹകരണ അര്‍ബന്‍ ബാങ്ക് ചീഫ് എക്സിക്യൂട്ടീവ് ഓഫീസര്‍മാരുടെ സംഘടനയായ കേരള കോ- ഓപ്പറെറ്റീവ് അര്‍ബന്‍ ബാങ്ക് ചീഫ് എക്സിക്യുട്ടീവ്‌സ് ഫോറം ഭാരവാഹികളായി താഴെ പറയുന്നവരെ ഫെബ്രുവരി 14  നു തിരുവനന്തപുരത്ത് ചേര്‍ന്ന ജനറല്‍ ബോഡി യോഗം തെരഞ്ഞെടുത്തു:

പ്രസിഡന്റ്‌ : ശ്രീ. ഇ.പി.ശ്രീകുമാര്‍ (തൃപ്പൂണിത്തുറ)
ജനറല്‍ സെക്രട്ടറി : ശ്രീ എ. വി. ഉസ്മാന്‍ (പൊന്നാനി)

വൈസ് പ്രസിഡന്റ്‌ : ശ്രീ. ടി.കെ.ദിലീപ് കുമാര്‍ (ഇരിഞ്ഞാലക്കുട)
ജോയിന്റ് സെക്രട്ടറി : ശ്രീ. ടി.ശിവദാസന്‍ (തിരൂര്‍)

എക്സിക്യൂട്ടീവ് അംഗങ്ങള്‍ :
ശ്രീ സുനില്‍ പ്രകാശ് (പഴയങ്ങാടി)
ശ്രീ ബാബുരാജ്‌ (കോഴിക്കോട് Mercantile Coop Bank)
ശ്രീ സാബു ചാക്കോ (കൊട്ടാരക്കര)

ഇ.പി.ശ്രീകുമാര്‍

എ.വി.ഉസ്മാന്‍

അനുബന്ധ പരിപാടിയായി അര്‍ബന്‍ സഹകരണ ബാങ്ക് പ്രതിനിധികളും റിസര്‍വ്വ് ബാങ്ക് ഉദ്യോഗസ്ഥന്മാരും പങ്കെടുത്ത കോണ്‍ഫറന്‍സ് നടന്നു.  അര്‍ബന്‍ ബാങ്കുകള്‍ നേരിടുന്ന വിവിധ പ്രശ്നങ്ങള്‍ ചര്‍ച്ച ചെയ്യപ്പെട്ടു.  മറ്റൊരു അനുബന്ധ പരിപാടിയായി പ്രസിഡന്റ്‌, വൈസ് പ്രസിഡന്റ്‌, ജനറല്‍ മാനേജര്‍ മാര്‍ എന്നിവര്‍ക്കുള്ള പരിശീലന പരിപാടി നടന്നു.

വിവിധ പരിപാടികളില്‍ റിസര്‍വ് ബാങ്ക് റീജിയണല്‍ ഡയരക്ടര്‍ ശ്രീമതി സുമ വര്‍മ, ഡെപ്യൂട്ടി ജനറല്‍ മാനേജര്‍ ശ്രീമതി സൂസന്‍ കുര്യന്‍, NAFCUB  എക്സിക്യൂട്ടീവ് ഡയറക്ടര്‍ ശ്രീ സുഭാഷ് ഗുപ്ത, അര്‍ബന്‍ ബാങ്ക് മാനേജ്‌മന്റ്‌ സംഘടന പ്രസിഡന്റ്‌ ശ്രീ. പി.പി.വാസുദേവന്‍, സെക്രട്ടറി ശ്രീ. ജയ വര്‍മ്മ തുടങ്ങിയ വിശിഷ്ട വ്യക്തികള്‍ പങ്കെടുത്തു.
ചടങ്ങില്‍ വെച്ച് ഡയരക്ടര്‍ മാര്‍ക്കുള്ള കൈപ്പുസ്തകം മുംബൈ റിസര്‍വ് ബാങ്കിലെ ശ്രീ. നന്ദകുമാര്‍ പ്രകാശനം ചെയ്തു.

I expect a simpler but effective tax system

I look forward to this year’s Budget as a milestone in India’s growth and development. We are at a crucial stage where the estimated fiscal deficit of 5.6-5.7 per cent of GDP looks too high and will take delicate balancing to bring it down by a percentage point. The overall GDP growth rate is showing a declining trend. We are just recovering from high inflation and have a challenge to keep it under control. I expect a simpler but effective tax system in the Budget to ensure the realisation of the targeted revenue generation.
Infrastructure and power generation are important sectors for growth. Many states, including Maharashtra, are facing serious power shortage. Serious efforts are needed to bring in investment in

Pioneering change

One should not mistake Mumbai-based Shamrao Vithal Cooperative (SVC) Bank as a regular urban cooperative bank. Not only has the bank grown exponentially – in the past seven years, the bank has scaled up its turnover from Rs 1,600 crore to 13,000 crore. From presence in 37 places, it now boasts of being in 120 locations. “We have grown by nearly six times in less than a decade, only because of the technological advancement the bank committed itself to,” says Ravikiran S Mankikar, General Manager, IT.
The bank not only has an in-house IT team, it is also the only bank in India that has its core banking on a virtual platform. Even the core banking business is done via virtualisation – the backbone for cloud. The bank caters to 10 lakh customers through 129 branches and has implemented a three-tier architecture-based banking solution on a distributed database called Genius I, which provides a single window solution for

Two power centers result in coordination problems: Chairman, Mahesh Bank

The A.P. Mahesh Co-operative Urban Bank is leading Urban Cooperative bank of Andhra Pradesh with a presence in the far-flung areas of the state. It caught media attention on the eve of launch of its own ATM Card recently.
The year 2012 being the international year of cooperative as declared by United Nations, Indian Cooperative decided to celebrate the success of cooperative institutions by interviewing the Chairman of Mahesh Bank, the dynamic Mr Ramesh Bung. This is our time as the ICA contributor said once, signalling the onset of IYC 2012.
Institutions are built around individuals