Shaping the Customer Experience in Urban Co-operative Banks
Enhancing Customer Experience in UCBs


In today’s world, as we navigate through the digital revolution and the rapidly evolving banking landscape, it has become more crucial than ever to prioritize customer experience and adapt to their ever-changing needs.

Urban Co-operative Banks (UCBs) have played a vital role in India’s financial development, with 1,451 UCBs currently operating in the country as of April 2023, catering to the financial needs of millions of customers. Despite their long-standing presence in India, UCBs are now facing a unique set of challenges to meet the demands of the modern banking consumer.

According to a study by the RBI in September 2021, UCBs account for 3% of the total market share of the banking sector in India. Urban co-operative banks account for 3.24% of the deposits and 2.69% of the advances. However, as of 2020, only 16% of UCBs have been granted a license to use digital channels for their customers. This emphasizes the need for UCBs to embrace technology and enhance their digital offerings to remain relevant and competitive in the market.

In this webinar, we will explore innovative strategies, best practices, and cutting-edge technologies that can elevate the customer experience for Urban Co-operative Banks. We will delve into topics like digital transformation, personalized customer service, and the implementation of advanced analytics to better understand customer behaviour and preferences.

Together, let us embark on a journey of knowledge-sharing and collaboration as we work towards empowering Urban Co-operative Banks to deliver exceptional customer experiences and secure a robust position in India’s dynamic banking industry.

Speakers Profile

Vishram Dixit

Vishram Dixit is a highly accomplished professional in the banking industry, with degrees in BCom, CAIIB, and MBA. With 34 years of experience, he began as a clerk in 1990 and has since gained extensive expertise across various operational areas within banking. Vishram has received multiple accolades for exceptional branch performance, showcasing his outstanding contributions. His areas of expertise include credit management, audit, marketing, leadership of third-party products, demat, ASBA, and product development. Currently, as the CEO of The Nasik Merchants Co-op Bank, Vishram has been instrumental in driving significant business growth and profits. He prioritizes leveraging technology to enhance customer service and ensure a seamless banking experience.

Satyajit Subhash Dugal

Satyajit Subhash Dugal is a seasoned professional with an extensive educational background, holding degrees in B. Com. LL.B., PGDBM, NCDO, and CAIIB. With nearly 26 years of experience in banking and auditing, Satyajit embarked on his banking career in 2000 as a Junior Associate at RBL Bank. Throughout his career, he has worked in various areas such as Secretarial, RCU, HR, Risk Management, Admin, and Branch Operations. In recognition of his exceptional performance, he was awarded the Best Branch Trophy for his outstanding contributions in the year 2020-21. Currently, Satyajit is actively involved in the Credit Automation Department as the Manager, spearheading the implementation of the LOS Project at The Cosmos Co-op Bank Ltd.

Mani Parthasarathy (Moderator)

Mani Parthasarathy, the Co-Founder and CEO of CloudBankin, is a highly regarded fintech expert with over a decade of experience in the industry. He remains up-to-date with the latest developments and frequently shares his insights on fintech topics through his LinkedIn profile using the hashtag #manispeaksmoney. Mani leads a specialized team at CloudBankin, focusing on providing digital lending solutions to financial institutions across 10 different geographies, including banks, UCBs, NBFCs, and fintech companies. These solutions encompass digital onboarding, loan origination system (LOS), credit decisioning engine, and loan management system (LMS). Moreover, Mani brings extensive expertise in the IT sector, gained from more than 15 years of experience in the field.

Panel Discussion

1. Mani: How big is the market in India for Urban Co-operative Banks?

Vishram: Co-operative Banks mainly thrive in Maharashtra and Gujarat, although they also operate in other states like Karnataka, Telangana, Uttar Pradesh, Delhi, and Rajasthan. The growth in Maharashtra and Gujarat is particularly remarkable. Despite being similar to other banks in terms of growth ambitions, marketing reach, and global connectivity, Co-operative Banks are not small organizations. Their growth is influenced by factors like strategy changes, fund availability, and operational scope, which can either hinder or drive substantial growth. These banks must formulate effective strategies to achieve a growth rate of over 20% or 10% annually. Instead of perceiving themselves as smaller players, they should aim to compete and collaborate with other leading banks in order to gauge their growth within the broader banking sector.

Satya: In the past 5-6 years, Co-operative Banks have emerged as strong competitors to both private and public sector banks. They now provide seamless banking services, including digital channels, bringing them on par with other banks. The landscape has changed significantly, with Co-operative Banks offering Internet Banking, UPI, and advanced facilities that rival those of private banks. In fact, some of their products are considered superior to those offered by private banks. Co-operative banks have become more proactive in their business mix and plans, which is reflected in their growth track record. Looking ahead, it is anticipated that Co-operative Banks will continue to outperform both private and public players in the coming years.

2. Mani: So, Satya, the subsequent question is: What factors do you believe contribute to the rapid growth of Urban Co-operative Banks (UCBs)?

Satya: There are three key factors contributing to the fast growth of Urban Co-operative Banks, as follows:

  • RBI Guidelines: Specific guidelines imposed by the RBI drive UCBs to enhance their retail portfolio.
  • Increased Competition: UCBs face strong competition from private and public sector banks, motivating them to accelerate growth.
  • Market Share Expansion: UCBs aim to attract a broader customer base by offering quality services and technological advancements

3. Mani: What manual works are performed in a UCB?

Vishram: Co-operative Banks need organized services with integrated technology for a seamless customer experience. Currently, customers have to physically visit branches and submit documents for account opening, which takes 10-15 minutes. By adopting a system-based approach with document upload and Aadhaar-based verification, this can be reduced to just three minutes. Other operations like office deposit accounts, locker services, and statement requests can also be efficiently handled through an IT system. Leveraging technology for management information systems (MIS), HR operations, and automation of processes can ensure accurate and timely solutions. Co-operative Banks should strive to be the preferred choice for customers by leveraging technology and competing with other banks.

4. Mani: What are the challenges faced by the customers in Urban Co-operative Banks?

Satya: Challenges faced by customers of Urban Co-operative Banks are prevalent across the banking industry

  • UCBs serve a distinct customer segment, including customers from co-operative societies in small villages.
  • Customers in these segments may have lower financial literacy.
  • UCBs have a responsibility to nurture and educate these customers.
  • Providing basic banking knowledge and financial literacy is crucial for UCBs.
  • UCBs prioritize customer service and aim to establish a familial bond with customers.
  • Private banks may prioritize account or token numbers over personalized approach.
  • Differentiating factor between private banks and UCBs is the emphasis on educating customers, especially those with no prior banking background.

5. Mani: How strong is the familial bond between UCBs and their customers, considering loans granted solely based on relationships without extensive documentation?

Satya: UCBs have a strong bonded relationship with their customers, treating them like family. They rely on trust and personal connections, often not requiring extensive documentation. Customers visit the banks regularly, engaging in friendly conversations with branch staff, fostering a lasting familial bond that is highly valued by customers.

Vishram: To summarize:

  • Urban co-operative banks treat their customers as family members, emphasizing the importance of building strong relationships.
  • Manual work is still prevalent in loan origination, HR payroll processing, and other operational tasks.
  • Financial literacy plays a crucial role in educating customers and providing them with essential banking knowledge.
  • UCBs face competition from other banks, including Co-operative societies.
  • Adopting technology and acquiring the necessary skill set pose challenges for UCBs.
  • Delays in service delivery are identified as a potential issue.

These challenges are not unique to UCBs but are prevalent across the banking service industry as a whole.

6. Mani: Could you share any success stories or examples of UCBs that have successfully improved their customer experience?

Satya: From Cosmos Bank’s perspective, they are actively addressing the challenges faced by customers in account opening and loan processing. They have introduced an online savings account opening a facility that takes just two minutes, utilizing the LOS project and online verification of KYC documents. This technology-driven approach has significantly reduced the time required for account opening from several days to a few minutes. 

Furthermore, they are also working towards implementing a similar process for current account openings. By adopting such online systems, both the bank and customers can save valuable time. Cosmos Bank considers these initiatives as successful case studies in leveraging technology to improve banking services.

Vishram: Namco Bank achieved success in serving small customers and expanding its reach at the grassroots level. How? Let’s take a look at 2022:

  • They processed over 800 small housing loan cases, with 428 cases being sanctioned and disbursed within a short period of time.
  • Automation of sanction letters and disbursement processes led to significant time savings.
  • Namco Bank disbursed a subsidy of Rs. 15 crores to borrower accounts, making them the sole co-operative bank in India to achieve this.
  • They organized 16 car shows, attracting 965 walk-ins and converting 700 new car cases.
  • The delinquency rate for car loans is exceptionally low, nearing zero.
  • Automation of processes such as documentation and sanction letters saved time and streamlined operations.
  • Proposals received at the head office are sanctioned or rejected within two hours.
  • They are working on applying similar efficient processes to other areas, including commercial loans.

7. Mani: Which loan products are relatively straightforward in terms of processing, and which ones tend to be more time-consuming?

Vishram: The duration for processing and approving commercial loans has been a topic of discussion. Initially, it used to take around two and a half months to dispose of a commercial loan. However, efforts have been made to improve the process, and it has now been reduced to just 15 days, which is a significant achievement. Despite this progress, there is still a general consensus that the timeline is quite lengthy, and there is a shared desire among people involved in commercial loan processing to further shorten the duration to seven to ten days.

Satya: In my opinion, commercial loans indeed require considerable time for processing due to the various aspects involved. The bank needs to thoroughly assess factors such as the customer’s balance sheet, financial analysis, legal documentation, and specific details related to their business operations. Given these complexities, it is understandable that commercial loans currently take approximately 25 to 30 days to complete. However, I agree with the sentiment that efforts should be made to reduce this duration and expedite the commercial loan approval process.

8. Mani: How does data analytics shape customer understanding and personalization in co-operative banks? Can you share an example?

Satya: Do you know that many major Urban Co-operative Banks have yet to implement data analytics? Meanwhile, private players are already utilizing it for data warehousing and mining. UCBs should prioritize establishing their own data teams to gather customer data, generate leads, and improve their services. Additionally, they should embrace e-commerce, social media, digital marketing, and efficient customer service practices to stay competitive in the evolving landscape.

9. Mani: Is there any cost-effective way that these UCBs expect the technology solution?

Vishram: I believe that a collaborative approach, such as pooling resources and capital, can be beneficial for small co-operative banks. By joining forces, these banks can work together to achieve specific objectives. This pooling activity can be overseen by apex bodies, ensuring effective management.

  • Larger banks like Namco, with a business volume of at least 2500 crores, have the capability to invest in technology and grow.
  • Smaller banks below one thousand crores may struggle to afford capital expenses for acquiring such technologies. Therefore, the pooling method becomes the most effective solution for them.

In Maharashtra and other states, various organizations can take the initiative to create a pool amount for infrastructure development in small businesses.

  • This approach has already been adopted by organizations like GPay, which no longer requires a debit card for UPI enrollment, relying on other authentication services instead.
  • Many smaller organizations with limited sales and growth can benefit from sharing expenses collectively.
  • The pooled activity serves as a solution to ensure consistent growth, as deviating from this approach may result in stagnation and ongoing challenges.

To sustain and thrive, these organizations should adopt the suggested format of pooling resources, capital, and expertise.

Satya: Small banks often face challenges in investing significant capital in data architecture, including data centres and related infrastructure. However, a potential solution lies in collaboration with larger banks. By sharing resources, big banks can extend support to their smaller counterparts. This co-operative approach enables small banks to leverage the capabilities and infrastructure of larger banks, facilitating their growth and development. Such a symbiotic relationship allows both small and big banks to thrive in the evolving banking sector.

10. Mani: How can UCBs like Cosmos Bank and Namco Bank engage customers and gather feedback for continuous service improvement?

Satya: Cosmos Bank encourages customers to open an account when disbursing loans, fostering regular interaction and relationship-building. This allows the bank to educate customers on banking transactions, including loan repayments. Customer education familiarizes customers with banking processes and showcases the bank’s support. Cosmos Bank employs Customer Relationship Officers (CROs) as lobby managers to gather customer feedback and identify areas for improvement. Regular feedback sessions and sharing of information with the head office ensure the continuous enhancement and exceptional customer service.

Vishram: Customer service is a key focus for Namco Bank, aligned with compliance and growth. Co-operative banks can explore methods to improve in this area. Namco Bank can leverage internal or external services, use social media surveys, and implement customer feedback calls. For example, TJSB Bank already conducts customer service calls for loan feedback. Feedback sessions can be organized via Google Sheets or dedicated forms. Namco Bank aims to enhance customer experiences and foster a strong banking community.

11. Mani: What strategies can urban co-operative banks employ to attract and retain younger customers with their unique preferences and expectations?

Vishram: The younger generation seeks digital banking, financial education, and community involvement. Co-operative Banks excel in community relations and attract customers with innovative and sustainable products. Namco Bank aims to reintroduce customer-friendly savings and current account products while cautiously avoiding competition. 

Embracing technology is crucial for convenience and relevancy. Co-operative and public sector Banks may face challenges with limited connectivity, but addressing these issues offers advantages.

Satya: The key to attracting the younger generation is through technology. As they are constantly on their mobile devices, banks should leverage social channels and gather suggestions directly from college-going individuals to meet their expectations. Implementing their feedback and developing products accordingly will effectively attract younger customers. Gathering feedback from the new generation is crucial for improving services and creating appealing offerings.

Neo banking apps are gaining popularity, allowing users to open savings accounts quickly through mobile devices. The apps, like LXME, Jupiter Money, and FI Money, received surprising requests for physical cheques from the younger generation. This highlights the varied preferences and needs of this demographic, even in an increasingly digital world.

Questions by the Audiences

  1. What challenges arise in educating diverse customers to use the Loan Origination System (LOS) for an Urban Co-operative Bank?

The loan origination process faces challenges in dealing with diverse customer requirements and streamlining operations, which are prevalent in Cooperative Banks. One issue is the disparity in handling different types of work.

Customers can fill out the application form on the bank’s website, and necessary documents can be uploaded in PDF format. After completion, they receive a unique application number via SMS or email. However, evaluating and processing the documents in the back office is cumbersome. The system lacks efficient methods for analyzing statements of accounts and conducting business evaluations, leading to sanctioning delays and manual handling of printouts.

To address these challenges, the bank intends to implement a system that streamlines the loan origination process. The system will include three phases: 

  • First, customers complete the application on the portal and receive an application number. 
  • Second, an automated analysis provides sales turnover insights. 
  • Finally, the sanctioning process moves smoothly between authorities.

Although the system’s articulation has started, the bank realizes it may take some time to fully implement it. Even major banks like HDFC Bank still face manual handling of statements and other aspects of the process.

  1. How are UCBs overcoming regulatory and infrastructure challenges to improve customer experience?

Customer services must comply with regulatory processes set by The Reserve Bank of India, particularly in infrastructure and technology development. Following these parameters is essential for effective services, such as conducting vulnerability assessments for customers. These challenges are mandatory for UCBs and other banks when introducing customer-oriented products, ensuring smooth and secure experiences.

  1. Should UCBs adopt the Account Aggregator (AA) System?

Yes, they definitely should. Since the AA program is being followed by all banks, then the UCBs should not be left behind.

  1. In June 2023, the RBI cancelled the license of 7 UCBs. How does this affect the existing Co-operative Banks?

No impact is expected. Among 1500 operative Cooperative Banks, only one or two faced issues, now reduced to 2400 through mergers. This is a systemic issue limited to specific organizations in certain areas of operations. The key is to focus on individual strategies, compliances, and customer reach rather than being affected by the failures of a few banks across India.

  1. On the importance of cybersecurity in the UCBs, what should be in place?

In the field of cyber security, regulatory instructions are explicit for both commercial banks and UCBs. It is imperative for them to comply with these guidelines and invest in cyber security despite the associated costs. The protection of data is of utmost importance, and failing to implement cyber security measures leaves banks vulnerable to negative consequences.

An analogy highlights the significance of security: just as a grandmother safeguards her gold in a purse away from anyone’s reach, a bank is entrusted with protecting its customers’ data from any form of attack. Therefore, banks must establish proper protocols and follow them diligently to prevent unauthorized access or potential data breaches, ensuring they are not susceptible to malicious activities by hackers or unauthorized individuals.

  1. What are some actionable insights regarding enhancing the customer experience of UCBs?

a) Customer experiences are crucial in shaping new product designs, requirements, and earnings.

b) Focusing on Green Technology initiatives, such as in mutual fund activities, can enhance customer engagement.

c) Innovations in technology are vital for digital banking growth and profitability.

d) Digital banking growth should align with organization strategies and be linked to sustainable growth budgets.

e) Systematic transactions growth plans aligned with digital requirements and sustainable growth budgets. Top management should design and work out these growth plans.


Enhancing customer experience in urban co-operative banks in India is a multifaceted journey. It’s about understanding customers’ evolving needs and employing strategies like personalization, data analytics, and employee training for a seamless banking experience. While technologies ensure trust and security, sustainable banking practices signify a commitment to broader societal goals. 

As we navigate the digital age, the “branch of the future” will be one that seamlessly blends technology with human connection. Conversational banking and touchless payment solutions are just the beginning; the future holds unlimited potential for innovation and enhancement in customer experience. Let’s explore these possibilities together for the betterment of our future.

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