evaluation of financial performance of urban co operative banks in india with special reference to select ucbs in the state of telangana

Abstract

Banking sector is the backbone of the economy of any country. In India, Banking sector has undergone a structural transformation over the last two and half decades after the initiation of liberalisation process in the year 1991. The Urban Co-operative Banks over the decades have saved the lives of marginalised sections of the society from the clutches of moneylenders who often exploit these people with their unfair practices. The Urban Co-operative Banking sector with its thrust on promoting thrift, self-help and mutual help had not gained much with this liberalisation process that kicked off in the year 1991 and in addition, the Urban Co-operative Banking sector had suffered due to multiple factors like dual-control by Reserve Bank of India as well as Registrar of Cooperative Societies of the State concerned, low capital base, series of scams, weak governance, poor professional management, managerial failures, siphoning of funds by Directors of the Banks, poor financial health, unviable very high interest rates on deposits, no clear-cut loan and investment policy, improper sanction of big loans without proper scrutiny, piling up of NPAs, ignoring the RBI s guidelines and directives and non-existence of proper internal audit in most of the UCBs etc., To offset all these bottlenecks, various Committees as well as Study Groups had stressed upon the importance of competent professional management, strict adherence to regulatory guidelines from time to time, implementing the latest corporate governance practices, improve the quality services to customers and to offer best services, pruning the skill sets of human resources to match the best in the industry, adopt modern methods of banking like e-baking, mobile banking etc.,