What is the future of Urban Cooperative Banks (UCBs) in the sphere of commercial banking institutions? This article discusses the advantages that UCBs have over conventional banks as well as the challenges they need to overcome to elevate their status and promote financial inclusion
Mention UCBs in corporate circles or even public sector commercial banking and chances are that you will evoke a smirk of dismissal. There are over 1,650 UCBs with close to 7,000 branches in the country. Yet they form a tiny part of the banking system accounting for less than 3% of the total banking assets and deposits and less than 3.5% of total advances. They also follow the 80-20 rule to the T. The top 20% of UCBs account for almost exactly 80% of its deposits.
Specific Challenges that UCBs Face
[This article has been reproduced with permission from the Indian School of Business, India]