Urban cooperative banks (UCBs) were urged by Reserve Bank Governor Sanjay Malhotra on Wednesday to be "mindful" of their obligations, especially in light of the "trust reposed" in them by depositors. According to a statement released by the central bank, the RBI Governor met with representatives from the National Federation of Urban Cooperative Banks & Credit Societies Limited (NAFCUB), the National Urban Cooperative Finance and Development Corporation Limited (NUCFDC), and stakeholders from a few UCBs. The meeting was one of several interactions the Reserve Bank has with the organizations it regulates.
Malhotra stated during the meeting that although the RBI will keep helping the industry achieve its growth goals, UCBs must continue to provide excellent customer service in order to gain and keep customers' trust. In addition, he counseled the UCBs to maintain their operational resilience, even in the face of cyber and IT threats.
Malhotra asked for feedback on the operational and regulatory issues affecting the industry and recognized the important role UCBs play in advancing financial inclusion at the local level. Executive directors in charge of regulation and supervision, as well as RBI Deputy Governors M Rajeshwar Rao and Swaminathan J, attended the meeting.
Hitesh Mehta, the bank's general manager and head of accounts, was detained by the Mumbai Police's Economic Offences Wing (EOW) on February 15 after he was accused of embezzling Rs 122 crore. By replacing the cooperative bank's board and designating an administrator to manage its operations for a year on February 16, the central bank took things a step further.
