‘RBI order on netas won’t affect cooperative banks in Goa’

NT NETWORK

Panaji 

After the Reserve Bank of India banned politicians from being on the board of cooperative banks, experts in the state’s   cooperative sector have said  the order is unlikely to affect Goan banks.

The RBI directive pertains  to the appointment of managing directors and fulltime directors. But  Goan urban cooperative banks have no political leaders in the concerned two posts. Hence  the directive will  have no impact on way the banks do business, experts explained. 

A senior stakeholder in the cooperative sector said that all Goan banks have roped in professional managing directors following the RBI’s steady pan-India tighter control over the cooperative banks.

Furthermore although the cooperative banks have politicians as chairmen or vice-chairmen, they are not fulltime directors and therefore the RBI order does not apply to them, he said.

The state has six cooperative banks of which the four functioning banks are: Goa Urban Cooperative Bank, Bicholim Urban Cooperative Bank, Citizen Cooperative Bank and Women’s Cooperative Bank.

The Madgaon Urban Cooperative Bank is presently under RBI ‘directions’ while the licence of Mapusa Urban Cooperative Bank has been cancelled.

Commenting on the RBI order, vice-chairman of Goa Urban Cooperative Bank Sandeep R S Khandeparkar said that it is aimed at ending  the involvement of MPs, MLAs or political leaders from day-to-day working of the banks. 

Khandeparkar, however, emphasised that it is the credentials of the person at the top that is important.

“He could be a person even with political or business background. But he must remember that the bank is a custodian of people’s money,” he observed.

The vice-chairman of Goa Urban Cooperative Bank added that cooperative banks by tradition have been promoted by politicians as it is a sector which requires a lot of support from the government.

Chandrakant Gawas, a board member of Citizen Cooperative Bank, said  the RBI directive is in the wake of the PMC Bank collapse.

“It is meant to clean up the cooperative sector, and therefore must be viewed positively.”

G B Desai, managing director at Bicholim Urban Cooperative Bank pointed out that the present RBI rules make it very difficult for the board of directors to misuse depositor’s money as directors are not eligible for availing loans from the bank.

The RBI order issued on June 25 said that cooperative banks with deposits above Rs 100 crore must have managing director or fulltime director who must not be  holding the position of a member of Parliament

or state legislature or municipal corporation or municipality or other local bodies.

The MD or the fulltime director must not be employed in any other business, the order said.

As per the RBI, eligibility criteria the MD or fulltime director must be a graduate or with qualification in banking or chartered accountant, among others.

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