Vora asks for scheme to revive weak banks

Minister of state for cooperation Ramanlal Vora said that as in the cases of nationalised banks, the RBI and NABARD should prepare a scheme for the revival of weak district cooperative banks and primary agriculture credit societies as per Kapoor Committee recommendations.

Mr. Vora was speaking at the conference of chief ministers of states on recommendations of the Task Force on Cooperative Credit System and Rural Infrastructure Development Fund held in New Delhi on August 25 under the chairmanship of Prime Minister Atal Behari Vajpayee.

Mr. Vora further said that looking at the financial limitations and other factors, it is not possible for the state to accept Kapoor committee’s recommendations to contribute 40 per cent for the revival package of weak co-operative banks.

Mr. Vora said that as many as six district co-operative banks and more than 800 PACS are weak in Gujarat and they need immediate help. Total amount of imbalances in the co-operative sector is to the tune of Rs 400 crores, he added.

Mr. Vora said that to avert repetition of the present crisis in the field of cooperative banks and to maintain the faith of general public, more controls and restrictions should be imposed on the financial agencies. RBI should also be directed to work for better control and monitoring of financial agencies, he added.

Disagreeing on the notion of duality of control, Mr. Vora said that the concept of duality of control as observed by the committee, is not realistic. Citing the Madhavpura Mercantile Co-operative Bank case, he said that though MMCB is registered under Multi-State Cooperative Society Act, members and depositors expected the state government to act firmly, which was technically and legally not within the purview of state government. Hence state has to impose certain restrictions in case of emergency and this cannot be termed as duality of control, he said.

Republished from The Asian Age