New Delhi: The National Urban Co-operative Finance and Development Corporation Limited (NUCFDC), envisaged as an umbrella organisation for the Urban Cooperative Banks (UCBs), would be launched by Union Minister Amit Shah at Vigyan Bhawan in New Delhi on March 2, 2024.
The initiative aims to modernize and strengthen the Urban Cooperative Banking Sector in India, for the benefit of both the banks and their customers.
The NUCFDC has received a Certificate of Registration (CoR) from the Reserve Bank of India to operate as a Non-Banking Finance Company (NBFC) and it will be allowed to operate as a Self-Regulatory Organization (SRO) for the urban cooperative banking sector.
The establishment of this umbrella organization will ensure specialized functions and services to cooperative banks, facilitate communication between banks and regulators, and address challenges faced by Urban Cooperative Banks, such as technology constraints and issues regarding the range of services.
The NUCFDC aims to raise capital, with plans to reach a capital base of Rs.300 crores. It intends to utilize this capital to support Urban Cooperative Banks and develop a shared technology platform to improve service offerings and reduce costs. To raise capital, discussions are going on with Urban Cooperative Banks and various other stakeholders.
Besides offering liquidity and capital support, the umbrella organization would set up a technology platform that can be shared by all UCBs, enabling them to widen their range of services at a relatively lower cost. It can also offer fund management and other consultancy services.
At present, there are over 1,500 scheduled and non-scheduled Urban Cooperative Banks in India with a total number of branches exceeding 11,000. The banks have a deposit size of over Rs 5.33 lakh crore, and total lending of more than Rs 3.33 lakh crore. Many of these banks have constraints related to technology platforms and difficulties in offering modern banking services.
By being part of NUCFDC, most of these banks would be able to upgrade to the latest technology and will be able to offer new products and services.
“Inauguration of this umbrella organization is itself a milestone event in the sector which has the potential to bring positive transformation at the grassroots level, empowering the communities across the nation, they would benefit from common marketing, treasury and network management,” the Ministry of Cooperation stated today.
– global bihari bureau
