NAGPUR: Depositors in cooperative banks may now get an opportunity to take a well-informed decision before parking their funds in these institutions. Amidst cases of cooperative banks going bust leaving the depositors in the lurch, Reserve Banks of India is planning to put their ratings in public domain. Termed CAMEL- short for Capital Audit Management Earning and Liquidity- the ratings system was applicable to the commercial banks. Following report of Narsimham Committee, it was adopted for the cooperatives from 2009 onwards. It is now being planned to disclose the CAMEL ratings of the banks to public so that depositors can take an informed decision. This was disclosed during a meeting convened by task force on cooperative urban banks (TAFCUB) held in Nagpur on Friday. Sources said there were plans to make information about the banks' financial status more accessible to the public. This would include making CAMEL ratings or the grades, which is a parallel system to categorize the banks, public. The general view is that grades may continue to be an internal matter but ratings may be made public, said a source. Gradings, which are denoted in numbers 1 to 4, are given on the basis of parameters like capital adequacy, consistency in profits and quantum of non-performing assets. CAMEL ratings on the other hand are denoted in alphabets, said the source. Even auditors have been asked to follow the CAMEL system while auditing the books of accounts. It was also decided to elevate the Shikshak Sahakari Bank to Grade 3. The second biggest cooperative bank of the city has finally come out of red with its networth entering positive zone, which is a major sign of improvement, a member of the TAFCUB said. The move brings the bank out of the danger of facing RBI action in the near future.
TOI
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