Maharashtra signs MoU with Nabard

The government of Maharashtra and the National Bank for Agriculture and Rural Development (Nabard) on Monday signed a memorandum of understanding (MoU) that will pave the way for capital restructuring of the loss-making primary credit societies in the state.

State minister for co-operation Patangrao Kadam and Nabard chairman Y S P Thorat signed the MoU.

Special audits of the co-operatives will be conducted till January 2007 to arrive at the exact nature of the capital required to be infused into the societies. There are approximately 22,000 societies that will undergo audit by specially trained officials.

Losses to be reworked as per the norms laid down in the MoU will be on the basis of the data as on March 31, 2004.

Thorat indicated that the quantum of financial infusion would be around Rs 200 crore, which would be shared by the central and the state governments according to an agreed formula.

He said the state government would have to amend its co-operative legislation to become eligible to receive the Centre's share of the package. An ordinance to this effect would be issued by the government soon after the assessment of quantum is finalised.

Kadam said a similar revival package for the urban co-operative banks in the state was being worked out and the final round of discussion with the RBI in this matter is scheduled for November 15.

The state is also keen on reviving the Land Development Bank, which is currently under liquidation. Liquidation orders may be revoked if a similar revival package is possible to be worked out for the bank, sources in the state co-operatives department said.