Also, there is urgent need for increase in the quantum of the general line of credit support from the present Rs 6,500 crore to Rs 35,000 crore (at least Rs 18,000 crore) at an interest rate of 3 per cent, instead of the present 6 per cent from the Reserve Bank of India to Nabard to ensure doubling of credit in next three years. Further, we want an increase in the quantum of refinance towards seasonal agricultural operations with lower rate of interest to facilitate co-operative banks to make available farm credit at a lower rate of interest.
There is need to explore the possibility of a separate fund at the level of Nabard to extend refinance to meet the production credit needs of the farmers.
Further, we suggested that the government initiate the process of consultation with all state governments to ensure reform measures, such as adoption of a model co-operative Act, removal of dual control by the state government and the RBI, re-model the Co-operatives Act, and regular elections to boards of management, with larger stake of members to ensure professionalisation of management etc. We also sought restraint on announcements on fixation of interest rates on farm loans to ensure the viability of co-operative institutions, declare loan waivers to ensure a proper loan recovery environment and honour the financial commitments made for co-operatives on earlier loan waivers and also waiver of interest on kharif loans.
The government should not reintroduce the Banking Regulation (Amendment) and Miscellaneous Provisio-ns Bill in its present form, as the proposed legislation is not in tune with the National Cooperative Policy which upholds the preservation of the distinct identity of co-operatives, its values and principles by providing an appropriate environment and taking required administrative and legislative measures.
Further, we suggested introduction of the modified Bill by retaining Section 56 of the Principal Act and bring out amendments in consultation with the co-operative credit structure.
The subsidy on agricultural products should not be reduced as other countries are providing higher subsidies which makes products from our country less competitive.
Ashok Bandyopadhyay, Chairman, National Federation Of State Cooperative Banks Ltd