The proposal is ready and state governments have also given their consent to the plan. The issue may be taken up and cleared by the Cabinet next week, senior government officials said. The finance ministry may also decide to bring co-operative banks under the ambit of the Reserve Bank of India. Currently they are governed by the state governments. To this end, the RBI Act would also be amended.
Sources added that the finance ministry is currently working out the finer details of the revamp plan. Once we get Cabinet approval for the same, we would start implementing the exercise on the ground level, a source said.
It may be noted that Prime Minister Manmohan Singh had earlier held a meeting with state finance ministers and other honchos to discuss ways to revitalise co-operative banks. Its revamp has become necessary with agriculture credit disbursement growing steadily. Finance ministry officials say co-operative banks would play a significant role in this area.
The ministry has set an agriculture credit target of Rs 1,41,000 crore for banks, including co-operative and regional rural banks.
As of October 31, a total sum of Rs 89,359 crore, which is 63% of the total target has been disbursed to the agriculture sector.