Urban Cooperative Banks (UCBs) will have to perform their own SWOT analysis which will enable them to become efficient, effective, competitive and, above all, viable and profitable business enterprises. Needless to emphasize that UCBs are going to emerge as an important segment of the banking sector in the post-reforms period.

Urban Cooperative Banks (UCBs) are essentially credit societies that have emerged over the last 100 years as banks. While the government support and patronage had always been to the rural credit cooperatives, and rightly so, the growth of other credit societies and UCBs has been without any support, either from the government or from any other quarter. Their growth was, however, always constrained on account of restrictive cooperative laws. After the UCBs were brought under the Reserve Bank of India's (RBI) control in 1966, they have effectively been subject to dual control and operating under this dual control regime has been a big challenge for the sector.

UCBs form a significant segment of the financial system both in terms of their number and also their share in the deposits. The ever-increasing incidence of overdues and consequential Non-Performing Assets (NPAs) occasioned by poor recovery of loans disbursed by them and inadequate human resources development have crippled their financial solvency, economic viability, productivity and profitability.

An effort has been made to conceptualize future strategies for ushering in an era of self-reliant, self-sustained and economically viable urban cooperative credit structure. Survival of the fittest in urban banking sector will assume greater significance in years to come. An attempt has been made by an in-depth Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis for UCB sector to cope with the challenges thrown up by reforms in the banking sector. In a way, this has led the UCBs to reposition themselves in the increasingly competitive environment.

It may be interesting to note that the commercial banks, during the period of depression following the two World Wars, had suffered considerable loss of public confidence and cooperative banks were considered to be safer institutions. This was true of the banking sector in Europe as well as in India. While in most of the developed countries in Europe, cooperative banks are still considered to be more ethical in their dealings than commercial banks, the scenario is different in India.

Urban Cooperative Banks, UCBs, SWOT analysis, Business enterprises, Non-Performing Assets, NPAs, Human resources development, Financial solvency, Commercial banks, Cooperative banks, International prudential norms, Financial sector.