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A safety net for U. P. small depositors

LUCKNOW: The Reserve Bank of India will have direct control over the urban cooperative banks in Uttar Pradesh. The move is aimed at ensuring security of the money deposited in these banks by the small depositors.

A memorandum of understanding to this effect was signed by the State Government and the Reserve bank on Friday. Uttar Pradesh is the 16th State where this arrangement has been finalised.

There are 61 urban cooperative banks and seven primary cooperative banks in the State. So far the RBI had no control over the urban cooperative banks and all the powers were vested in the Registrar of Cooperative Societies, U.P. The licences of the cooperative banks were cancelled by the RBI on the report of the State Government.

State Cooperative Minister Swamy Prasad Maurya said here that a State-level task force would be constituted to monitor the working of the urban cooperative banks. He told a press conference that the Registrar of Cooperative Societies had been included in the task force. Approval for the MoU had been obtained from the State Cabinet on March 20, the Minister added.

Groundwork for the arrangement had been prepared during the Samajwadi Party regime and the issue was pending for the last couple of years. Mr. Maurya said the management of the urban cooperative banks and the officials associated with the banking operation would now be accountable to the RBI.

Till March 2007, the urban cooperative banks had deposits totalling Rs.1,809 crore. The Minister said the move would give a fillip to the cooperative movement in the State and benefit the small depositors. He said it was the first time since Independence that a special package of Rs.2,500 crore had been sanctioned for the Cooperative Department. “The first instalment has been received,” he added.

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A safety net for U. P. small depositors

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