Union Cooperation Minister Amit Shah

| Photo Credit:

The smaller the loan, the better is the asset quality for banks as small borrowers are honest, said Union Co-operation Minister Amit Shah.Citing his own experience, Shah said when he decided to introduce a ₹2.50 lakh loan without collateral and guarantee in his bank (Ahmedabad District Co-operative Bank), the CEO, who was a veteran banker, was skeptical about this scheme.The CEO alleged that the Chairman (Shah) of the bank approved the scheme to further his political agenda, and it will become a “loan mela”.“Before coming to this function, I checked with the Bank whether the scheme, whose loan amount has been upsized to ₹5 lakh, is still running. They told me that the default rate in this scheme is only 0.22 per cent. That means 99.78 per cent of the loans have been returned with interest,” he said at an event in BSE to launch the Security Operations Centre and a nationwide Core Banking Service (Bank in a Box) for UCBs.To generate self-employment in the economy, co-operatives, including banks, have a big role to play, emphasised Shah.The Minister underscored that common peoples co-operatives should be formed by aggregating their savings, creating a big pool which can be used to do big business. In this regard, he cited the example of Amul, which has 36 lakh women members (who invested less than ₹100 each) and has a turnover ₹1.25 lakh crore. This is the strength of co-operatives.Meanwhile, Shah asked all 1,400 urban co-operative banks (UCBs) to become members of the National Urban Cooperative Finance and Development Corporation (NUCFDC), the umbrella organisation for UCBs, Shah said.Currently, 690 UCBs are members of the Corporation, which was launched March 2024. NUCFDC aims to provide these banks with shared technology platforms, core banking services, cyber-security solutions, capacity-building and operational support.“In one year, 100 per cent UCBs should be in the net of the umbrella organisation. For this, UCB State Federation office bearers should take responsibility,” Shah said at the “‘Sahakar Nav-Kranti’ programme said after inaugurating NUCFDC’s office.Published on August 8, 2026