'Ensure that cooperative banks in UP continue to work'

The Uttar Pradesh government was today directed by the Legislative Council to ensure that the district cooperative banks of the state do not face a closure due to shortage of funds.
The issue was raised through an adjournment motion by the Congress members during the Zero Hour.
The members said due to lack of availability of Central share as recommended by the Vaidyanathan committee and no financial assistance by the state, the RBI has issued notice to close down or liquidate these banks for not obtaining licence by March 7 this year.
The Vaidyanathan committee was set up to revamp rural cooperative credit institutions and favoured revival of cooperative institutions offering short and long term credit facilities.

On this, Chairman of Vidhan Parishad Ganesh Shanker Pandey asked the government to make sure that these banks in 16 districts do not close down.
Congress members said the financial health of these banks is continuously deteriorating due to fund crunch.

They said that at present the Centre and the state have to give Rs 922.28 crore and and Rs 688 crore respectively so that these banks can be revived.
The members said once these banks receive funds, they would get licence from the RBI also.
On behalf of the government, Leader of the House Ahmad Hasan assured that the government will arrange resources and run the banks.

The adjournment motion was subsequently rejected by the Chairman.