Gujarat Urban Cooperative Banks strive for technology upgradation to push up advances

The Urban Cooperative Banks (UCBs) in Gujarat are struggling with lower credit-deposit ratio as compared to their private and public sector peers in the State. The UCBs, according to experts, are striving for latest technology in banking and strong marketing push.

The credit-deposit ratio for the UCBs in Gujarat have declined from 59.6 per cent in fiscal 2015-16, to 53.1 per cent in 2016-17 after a remarkable 26 per cent growth in deposits from Rs.40,183 crore in fiscal 2015-16 to Rs.50,715 crore in fiscal 2016-17, a report by the Gujarat Urban Cooperative Banks Federation  noted.

Against the deposit growth of 26 per cent, UCBs had reported advances growth of 12 per cent from Rs.23,980 crore in fiscal 2015-16 to Rs.26,954 crore in 2016-17.

UCBs in Gujarat have over 1 crore depositors, which grew by about 11 per cent over last year. On the other hand, the number of borrowers declined from 6.04 lakh in 2015-16 to 5.71 lakh in 2016-17. The UCBs have members as their borrowers, who contribute a certain share of their loan amount to the share capital of the bank and become a shareholder of the UCB. These UCBs provide loans for variety of purposes including personal loan, education, vehicle as well as home loans. The decline in number of borrowers, according to experts, is a temporary phenomenon and will be overcome in the remaining half of the fiscal.

“The scenario of lower credit off-take is not limited to UCBs. We see a similar trend across the banking sector. But there are some challenges unique to the UCBs. The key among them is the technological limitations such as netbanking facility. Sometimes, we feel our marketing muscle lacks strength,” said Jyotindra Mehta, Chairman, GUCBF. However, Kalupur Commercial Cooperative Bank Ltd is among the front runner in adopting net banking and mobile banking services for the customers.