LACK OF CORPORATE GOVERNANCE IN URBAN CO-OPERATIVE BANKS (UCB) RESULTS: UCB ARE FALLING LIKE PACK OF CARDS, LEAVING HAPLESS DEPOSITORS HIGH AND DRY!

Corporate Governance is concerned with the systems and processes for ensuring
proper accountability, probity and openness in the conduct of an organization’s business.
Thus, it is the process under which the organizations try to hold the balance between
economic and social goals and between individual and communal goals. The basic aim of
Corporate Governance is to align as nearly as possible the interests of individuals,
corporations and society. Banks have an overwhelmingly dominant position in
developing the economy s financial system, and are extremely important engines of
growth. Despite the differences between co-operative banks in the different countries, all
networks share one common and defining feature – member ownership. The cooperative
banks are effectively owned and controlled by their local customers through the

membership concept. Corporate governance in banks has assumed importance in India
post-1991 reforms because competition compelled banks to improve their performance.
Due to these core values and corporate governance rules, cooperative banks were not at
the root of the crisis and have shown to be more resilient during the crisis. With core
values and corporate governance model of cooperative banks in mind, the importance of
corporate governance is much greater than is considered at present.

This paper reviews the existing codes of Corporate Governance (CG) in India. It
uses secondary data for analyzing the adaptability of CG codes in the Indian context. The
data were collected through various published and unpublished reports and websites.
The paper reviews, what is conveniently forgotten is the pathetic troubles of a large
number of bank depositors caused by a series of failures of urban co-operative banks
(UCBs) year after year. During first ten months of the current year, ten urban cooperative
banks death causing untold hardship to a large number of bank depositors,
who are virtually left high and dry for no fault of theirs.