Co-op banks want taskforce report modified

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Kolkata, May 4: Cooperative banks across the country have decided to oppose a taskforce report that they feel will hand over rural India to moneylenders instead of making the cooperative framework stronger. Finance minister P Chidambaram has accepted the report of the Vaidyanathan Committee, which he set up, but heads of cooperative banks said no state government is likely to accept the report as it is.

The committee was asked to suggest ways in which rural cooperative credit institutions can be made viable. There are 112,309 primary agriculture credit societies (PACs), 367 district central cooperative banks (DCCBs) and 30 state cooperative banks (SCBs).

They are upset with its recommendations on eligibility criteria for availing benefits of revival package, classification norms and disintegration of cooperative structure, among others. The managing director of National Federation of State Cooperative Banks (NFSCB), B Subrahamanyam, said: “The report is not in line with the terms of reference. It should have suggested ways to implement the earlier reports.”

In the last four years, three committees — the Kapur Committee, Vyas Committee and VK Patil Committee — had presented their views on the revival of cooperative structure. Not one could be implemented. Collective opposition to the Vaidyanathan report surfaced first at a national meeting on April 25 of state officials, registrars of cooperative societies (RCS) and cooperators organised by the NFSCB in Mumbai.

At that meeting, the delegates opposed the eligibility criteria and also the enactment of parallel laws for cooperatives. Wednesday’s meet was organised by National Bank for Agriculture and Rural Development.

Ashok Bandopadhyay, a former chairman of NFSCB, said cooperators are not discarding the report in totality. “Some suggestions are important, but some need changes,” he said.

Cooperators have welcomed Mr Vaidyanathan’s call for an injection of Rs 15,000 crore to help banks wipe out accumulated losses and strengthen the capital base. But they feel that its criteria for banks that wish to tap the funds excludes precisely those who need the money the most.