Report on Interaction program at TESCUBFED on 14-08-2024 with Sri Prabhuti Samal, DGM, DoS, RBI, Hyderabad

Report on Interaction program at Telangana State Urban Coop Banks Federation on 14-08-2024 with Sri Prabhuti Samal, DGM, DoS, RBI, Hyderabad

Urban Coop Banks in the state of Telangana are strengthened year over year. As on 30.06.2024 with a total business of over Rs. 15,569 crores consisting Rs.9,489 crores deposits and Rs. 6,080 crores loans and advances compared to position as on 31.03.2024, with a total business of over Rs. 15,474 crores consisting Rs.9,554 crores deposits and Rs. 5,920 crores loans and advances.  First quarter growth during the current year is a mixed phenomenon. Fall in deposits is to the tune of Rs. 65 crores and contrary growth loans and advances is Rs.160 crores, resulting in a raise of Rs. 95 crores in total business. In this scenario, in order to motivate the Chief Functionaries of the UCBs, an interaction program with Officials from Department of Supervision, Reserve Bank of India, Hyderabad was planned. Sri Prabhuti Samal, DGM, DoS, RBI, Hyderabad given consent to attend the interaction program. Telangana UCBs Federation organised the interaction program on 14^th August 2024 at federation office and good number of Chairmans’, Directors’, CEOs and senior officers of the UCBs in the State of Telangana attended the program.

Sri G Madana Gopala Swamy, Working President, Telangana Federation, Chairman, Adarsh Bank and Director NAFCUB, New Delhi in his opening remarks welcomed the participants, appreciated the support received from the DoS and expressed that the desire of UCBs is to include UCBs in the SLBC (State Level Bankers Committee), allow UCBs to do MSME finance under various Governments schemes like MUDRA loans etc. and arrange skill development trainings like Credit Appraisal etc to be made available locally. At present UCBs are sending their staff to RBI College of Agricultural Banking, Pune for various skill development trainings and now it is time to review and bring it near. He also brought into the notice about the time line between issuing new branch license and branch opening. To search for a building, completing the lease agreement formalities and construction of office counters etc needs more time. Hence federation requests to look into and allow more time to branch premises preparation.

Sri Pramod Kumar Kedia, Vice President, Telangana Federation and Chairman, Agrasen Bank praised for the support received from the DoS and issues related to Annual Inspections and stream lining issuing licences for new branches are to be looked into.

Sri Prabhuti Samal appreciated the federation activities and he preferred to go with the UCBs, hand in hand, to strengthen them.  Previously in the combined state, there are 97 UCBs and now 46 are Andhra Pradesh and 51 are in the state of Telangana and all are doing good. Their Department Mission is to strengthen the UCBs in a systematic and for that they adopted an approach called SAIDUT.

The word “SAIDUT”, signifies that ‘S’ for Strategic, ‘A’ for Approach &, ‘I’ for Initiative for the, ‘D’ for Development of, ‘U’ for UCBs in the, and ‘T’ stands for Telangana State. Hence SAIDUT was Strategic Approach & Initiative for the Development of UCBs in the Telangana State. In order to achieve this Mission, they adopted the approach of 4-Cs.

4-Cs are Consolidation, Calibrated upgradation, Continuous Supervision and Capacity Building. By merging 3 weak UCBs with strong UCBs, they achieved the first C. They reduced the number of SAF – (Supervisory Action Framework) UCBs from 12 to 5 and it should be to ‘0’ by this or next year end. To reach this, those UCBs have to work hard and come out of SAF. It helps us to achieve second C. There is good progress in Inspection of UCBs and number of UCBs inspected increased from 22 to 32 in a year. It is all possible due to the excellent support received from all the UCBs in the state of Telangana and all the UCBs are good. Thus, the third C also achieved. Fourth C is the Capacity Building and we are conducting trainings regularly sometimes at our office and at times RBI College of Agricultural Banking. This enables us to serve the purpose skill development and capacity building.

We aim to bring SAF Banks to ZERO and profitability of the UCBs to grow. We wish at least one UCB must convert into Small Finance Bank and for that required criterion is minimum of Rs. 200 crores in paid-up voting equity capital / net worth are required and net worth UCBs desiring to transition into SFBs voluntarily is Rs. One hundred crores must be enhanced to Rs. 200 crores within five years of the start of business. The priority sector lending (PSL) norms for UCBs are at par with SFBs and will receive scheduled bank status as soon as their activities begin.

Based on the following parameters, the growth of UCBs in the state of Telangana is commendable compared with all India average and this shows the commitment and dedication of the UCBs in the state of Telangana to strengthen and grow.

He concluded and invited questions from the members presented. Members from different banks raised the issues related to gold loans and limits for EMI, Bullet payment and its linkage to PSL lending targets and its achievement, MSME financing, CRR / SLR related issues, tenure of Directors in UCBs, nominating two professional directors in addition to the elected two professional directors etc.

Recent Banking Regulation (Amendment) Act Bill 2024 introduced in the parliament, RBI directives, which are challenged in the court of law, awaiting judgement and certain issues, which will be redressed through amendment of By-laws of the respective UCBs are the solutions for these issues and concluded by advising that the UCBs must approach the DoS for any issue wise clarifications by writing individually. Meeting concluded with vote of thanks.

Telangana UCB Fed organizes fruitful interaction with RBI official (indiancooperative.com)