RESPONSIBLE: A group of Catholics formed the Citizenscredit bank a hundred years ago to help small and medium businesses it has maintained a very high reputation.

By Arvind Pinto

The 100 years old Citizenscredit Co-operative Bank unlike the Mapusa and Margao Urban is a schedule bank started by the Catholic community in Mumbai. The bank follows a very prudent lending policy by limiting loans to `50 lakh which has enabled it to keep its NPAs at less than 1%….

In the firmament of falling and fading stars which is the story of the Cooperative Banks in India, there is a solitary star – the Citizencredit Cooperative Bank Limited that although 100 years old is still strong and vibrant. Let’s look at its story to learn how it not only managed to survive, but continues to grow and flourish in today’s day and age.
It was on the 6th day of May in the year 1920, that seventeen eminent gentlemen of the Catholic community in what was the town of Bombay in the Bombay Presidency of the colonial India, decided to come together to register the Bombay Catholic Urban Co-op Credit Society. This was an era when World War 1 has begun, hardships were the order of the day, many of the Catholic community had come to this growing city from both Goa and Mangalore, in search of jobs. But the war put paid to their dreams with employment hard to come by. At this time there were also stalwarts of the community, who had come a few decades earlier into the city and over the years had established themselves in the city. At the head of this group was Mr. F.A.C Rebello, who held a senior position in the Accounts Department of the then Government of Bombay. F.A.C Rebello was indeed a pioneer of the cooperative movement, having initiated several land housing cooperative societies, such as the Salsette Society and St. Sebastian Society in Bandra. Another person on note was Professor Aloysius Soares, who was the Principal of a school in Byculla and was with Doctor Cosmas Fernandes, one of the founder members of the St. Anthony’s Homes Cooperative Society at Chembur. In the ‘20s of the last century, banking in India was still in its infancy and money was not easily available for entrepreneurs. Accordingly, this credit society had as its objectives, the mobilization of deposits from its members by way of saving accounts and fixed deposits and to make loans and advances available to its members. The Cooperative society continued to flourish during the War years, helping out with loans especially those who had lost their jobs in the war period and the global depression that followed.
In independent India, several of these credit societies fell into disuse, since there was a steady rise in banking services especially in the urban centers. Besides credit societies were unregulated and the risk of investing one’s savings in these institutions was high. With falling interests in credit societies, the Bombay Catholic Urban Cooperative credit society also fell into hard times. In June 1982, the Society had a share capital of 17,590 with approximately 500 members. In 1982, at the General Bombay Meeting of the credit society, under the leadership of Mr. John D’Silva, helped by Mr. Miles Francis from the Reserve Bank of India and Mr. Leslie Lobo from the Grindlays Bank an effort was made to revive the credit society by increasing its membership and opening branches in different parts of the city. Further the general body was of the view that the days of these credit societies were numbered and there was a felt need of turning the credit society into a cooperative bank. Accordingly, an all-round effort was made to increase the share capital as also increase the membership of the Society. In 1984, the Registrar of Cooperative Societies approved the conversion of the credit society into a Bank with the name Citizen Co-op Bank Limited. With this approval an application was made to the Reserve Bank of India, for a banking license. On the 27th December 1989, the Reserve Bank of India granted this society a Banking License. This was a recognition of the good work that this society had undertaken Seven years later, the RBI granted the Bank Scheduled status. It was found that the bank has a similar name to yet another cooperative bank. Accordingly, this bank came to be known as Citizencredit Cooperative Bank Ltd. Interestingly its first office was in a small room underneath the staircase at Antonio D’Silva School at Dadar, with many of its founder members literally going from house to house to make members, collecting their initial contributions. Priscilla Buthello, the wife of the recently deceased Walter Buthello who was one of the first set of directors, remembers her husband going around the east Indian village of Kurla asking families to become shareholders. Several of those early members were not in a position to contribute to the initial capital and Walter, who was in business would willingly pay for their shares! Today the Bank has stopped issuing fresh shares or making new members. But each year, the shareholders receive a dividend of 16% which is probably the highest among the cooperative banks. For the year ending March 2020, despite making a profit of more than 14 crore, no dividend could be declared, since there was an RBI prohibition for the declaration of dividends by Banks. Today the Bank is a multi-state cooperative bank with 46 branches in the states of Maharashtra, Goa, Daman, Diu, and Dadra and Nagar Haveli. It has a shareholding of 13,413 members with a paid-up capital of15.10 crore. Being a cooperative society, the shareholding also includes nominal members – borrowers who are required to apply and are allotted a shareholding on obtaining loans from the bank.
Citizencredit Bank has a small but vibrant presence in Goa, with five branches – Panaji, Porvorim, Vasco Margao and Mapusa. Over the years, its business in Goa is slowly and steadily increasing. While several of the cooperative banks in Goa are in the process of being either closed or being merged with other banks, the Citizencredit Cooperative Bank with its professional Board of Directors, its focus on business and its professional risk analysis and compliant processes is steadily growing both its business as also its loan book. Besides the Bank gives loans at competitive rates, has interesting loan proposals for those interested in housing loans as also two and four-wheeler vehicle loans! There are also loans available for those fishermen interested in buying a boat!
The last financial year, 2019-20, while most of the Indian banks including several cooperative banks fared poorly, Citizencredit saw an increase in its net profit to 14.76 crore as against 11.23 crore in the previous year. Further there was a reduction in the gross non-performing assets (GNPA) from 4.99% to 4.62%. The Net NPA was only 0.8% as compared to 1.65% in the previous year. In view of the increasing NPA’s the provision coverage ratio attained a high of 81.47% as against the earlier year’s figure of 67.97%. Further the banks capital to its risk weighted assets known in banking parlance as (CRAR) stood at an all-time high of 22.40% as against the RBI norm of 9%.
Thus, the bank is both financially strong as it enters into a difficult phase where COVID 19 has hit most of the banking sector. With the moratorium given by the RBI to the repayment during the peak months of April to June, the Bank is poised to face the challenges of the likelihood of an increasing default in loans and the slow down of business. Unlike many cooperative banks where the management has to often to yield to the dictates of the board of directors, the management of the Citizencredit is professional in their approach and this policy has enabled the Bank to weather the downturn in the financial sector, while ensuring that its growth continues even in the downturn in the economy!