Malegam Committee report, published by the Reserve Bank of India, on Monday, seems to have opened the door for credit unions of Gujarat, who have been waiting for a state cooperative banks. Experts expect that about 40-50 credit cooperatives in Gujarat, you can choose to become urban cooperative bank (UCB), after the new emission standards recommended by the Commission.

The recommendations of the committee, appointed by the RBI in the licensing of new UCBS headed by YH Malegam said, “the current well-managed credit unions that meet the financial criteria such as income, capital adequacy and NPA “, the ratio should be a priority for the licensing UCBS especially in the districts or slightly banked unbanked in the country.

Experts from the banking community in Gujarat Cooperative reported that credit card companies of the State is likely to get a boost from this recommendation. “This will restore confidence in the cooperative banking sector. Of the 5,200 credit unions in Gujarat, more than 100 are able to meet the standard entry point set by the panel to become UCB. But at least 40-50 to credit card companies are likely to UCBS after the implementation of the recommendations, “said Ghanshyambhai Amin, President of the Federation of Credit Cooperatives.”

He added: “deposits with companies of credit institutions are not insured, while those with UCB are insured up to RS 1 lakh So companies try to get more credit status of UCB to improve their confidence and bring more customers .. “Gujarat has about 5,200 cooperative credit institutions with the communities with a total advance estimated at over Rs 700 crore.

Gujarat has been one of the worst banking crisis of the cooperative in the past. Industry experts said it was particularly serious fraud discovered after Madhavpura Mercantile Co-operative Bank (MMCB) confidence in the UCBS began to tremble. Industry estimates indicate that about ten years ago the state had more than 350 UCBS operating in different parts of the state, but more than 100 UCBS killed their shutters after the MMCB scam. Currently, the state UCBS 249, which recorded a total business of Rs 31,000 crore more than in 2010. The supreme organ of state UCBS. Gujarat Urban Cooperative Banks (GUCBF Federation) welcomed the recommendations.