Crisis grips Guj co-op banks

Ranked only behind Maharashtra in the spread of co-operative banking in the country, Gujarat's co-operative banking sector has taken a beating in the recent past, primarily because of mismanagement of the banks.

It is amidst these tension that the all India co-operation week is being observed from November 11 to 17.

Of the total 358 co-operative banks that operate in the state, eight are multi state co-operative banks, which have customers from outside the states.

However, as many as 84 banks today have been declared weak and have been asked to reduce their non-performing assets by increasing fresh deposits and speeding up recovery procedures.

Also, as many as 18 co-operative banks have either been placed under a custodian or an administrator. Another 14 co-operative banks is on the brink of bring liquidated as there is no scope of reviving them.

In fact, depositors of some co-operative banks that have been placed under liquidation, such as the General Co-operative Bank and Visnagar Nagarik Sahakari Bank, have already begun to get their insured money back.

However, the official version is that the co-operative banking sector in Gujarat strengthening after the Madhavpura Mercantile Co-operative Bank (MMCB) crisis of 2001.

With a revised revival plan having been chalked out for the bank, some 40 to 50 co-operative banks which had sizable deposits with MMCB, have got a fresh lease of life. But state co-operation minister Bhupendrasinh Chudasama was not available for comment.

Meanwhile, there are over 57,000 co-operative societies that have been registered with the state registrar of co-operatives. Apart from banking and milk co-operative, co-operatives have been formed in housing, irrigation, labour, consumer, agriculture, sugar and other segments.