Interference in rural co-ops thing of past: YSR

Andhra Pradesh chief minister Y S Rajasekhara Reddy today said government interference in the affairs of rural cooperative credit institutions in the state would be a thing of past.

Commenting on the MoU entered into by the state government with the National Bank for Agriculture and Rural Development (Nabard) for the implementation of financial package along with legal and administrative reforms aimed at reviving the rural cooperative credit system here on Tuesday, the chief minister said the new initiative would bring in self-sustenance to the institutions and benefit farmers immensely in the long-run.

He said that 19 of the 22 district cooperative central banks (DCCBs) in the state were facing financial bankruptcy on account of lack of professionalism in their management while the indifference and interference from the previous governments further contributed to the fast deterioration of the cooperative credit system weakening its role in farm credit.

Stating that the measures to be initiated under the MoU would bring a sweeping change in the existing institutions, the chief minister said the government would complete all the formalities and facilitate the recapitalisation of the state's rural credit system fully.

Terming the MoU as a historic and bold decision taken by the state government, Y S P Thorat, chairman of Nabard, said the financial package and the following structural measures would revitalise the short-term rural credit structure in the state.

According to Thorat, the state rural cooperative credit institutions would receive a minimum of Rs 1,500 crore assistance in the form of recapitalisation of the system if the state government fully implemented the legal and administrative reforms envisaged in the MoU.

A quarter of the assistance would be released upon the completion of the first stage reforms, which includes necessary amendments to the existing cooperative Act of the state government, he said.

Legal and administrative reforms include ensuring voting rights to borrowers and depositors, ending the state's intervention in administrative and financial matters of cooperatives, and limiting powers of the state government to supercede boards among other things.