The cooperative sector has urged the government to formulate a Rs 10,000-crore rehabilitation and recapitalisation package for weak cooperative credit institutions. This package should include assistance to the cooperative credit societies to cleanse their balance sheets and strengthen their capital base.
This is part of the 45-point charter of resolutions and recommendations adopted by the 14th Indian Cooperative Congress that ended, here, yesterday. It was organised by the National Cooperative Union of India (NCUI) and attended by hundreds of cooperators from within the country and abroad.
The resolution called upon the Reserve Bank of India (RBI) to immediately accord scheduled status to all the eligible state cooperative banks. The RBI should implement the recommendations of the Jagdish Capoor task force set up by it to suggest measures for strengthening the cooperative credit system. The task force recommendation of giving licences to agricultural and rural development banks to function as full-fledged banks should be carried out. Separate norms should be formulated for giving these licences, it said.
The Congress took note of the recent failure of a few urban cooperative banks and said a rational approach should be adopted in dealing with such instances so that the entire urban cooperative movement was not adversely affected. It expressed disappointment over regulating authorities using such aberrations as excuse for putting hurdles in the operational freedom of all urban cooperative banks. This was unwarranted as most of these banks were performing exceedingly well, it said.
It suggested that the RBI should withdraw the blanket ban on urban banks keeping deposits with other banks. The need of smaller cooperative banks to keep deposits in multi-state urban cooperative banks or scheduled banks should be recognised. A workable formula should be evolved by the RBI for this purpose.
The Congress urged the government to expedite the necessary amendment in the Banking Regulations Act to enable the RBI to issue a necessary licence to the Cooperative Bank of India to commence business. For dairy cooperatives, the Congress asked the government to remove incidence of double commercial taxation when transactions took place between federal cooperatives and their member cooperative institutions.
The dairy cooperatives should be fully exempted from sales tax on inputs like cattle feed and seeds.
The cooperative meet urged the railway ministry to reserve all skilled and non-skilled works up to Rs 15 lakh for allotment to the labour cooperatives. The ministry might reserve all parking lots for the labour cooperatives as well.
It noted with concern the adverse effect of liberalisation on the consumer cooperatives, threatening liquidation of many of them, and appealed to the government to provide administrative and financial assistance for their revival. It pointed out that the consumer cooperatives had often been used by the government for distribution of essential commodities as a welfare measure. They should be compensated for the losses incurred on such operations.
