Nabard advocates reforms in co-op banks

National Bank for Agriculture and Rural Development (Nabard) has called for reforms in the co-operative banking sector.

Senior officials of Nabard made a representation to chief minister Narendra Modi on Tuesday to improve the present condition of co-operative banks in the state.

Co-operative banks had contributed only 26.58 per cent in the credit to agricultural sector, which stood at Rs 1,15,242.81 crore during 2004-05, an increase of 32 per cent over the actual disbursement of Rs. 86,981 crore during 2003-04.

During her visit to Ahmedabad on Tuesday, chairperson of Nabard, Ranjana Kumar said, "Health of co-operative banks is a matter of grave concern for us. It has a significant role to play in rural credit. The co-operative sector is 100 years old in the country and is in a dismal position. We are advocating before the state governments to implement the recommendations by the Vaidyanathan Committee on revamping of rural cooperative credit system. We have also talked about the same to the state government of Gujarat and have received positive response."

During the last fiscal, commercial banks, co-operative banks and RRBs had disbursed Rs 72,886.26, Rs 30,638.38 and Rs 11,718.17 respectively. The disbursement by the co-operatives banks increased from Rs 26,959 to Rs Rs 30,638.38, representing growth of 14 per cent. However, it failed to achieve target of Rs 39,000 set by the government of India.

"The co-operative sector has tremendous potential as it has a better understanding of local culture, language and issues compared to any other agency. Its high time to reform the co-operative banking before it becomes too late. Co-operative banks also should be computerised soon to bring transparency in transactions," said Kumar.

Meanwhile, Nabard is also pursuing state governments in the country to introduce reforms in co-operative banking as soon as possible.