Prime Minister Manmohan Singh is expected to convene a meeting of chief ministers of all states this month end to give a final shape to the proposed Rs 15,000 crore revitalisation package of cooperative banks. |
"The Prime Minister is expected to convene a meeting of chief ministers on the cooperative bank revamp scheme by end of May," Nabard managing director YSP Thorat said. |
Thorat, who played an important role in suggesting a set of stringent guidelines for cooperatives to become eligible for the bailout package, said states have to agree to the package and make their share of contribution. |
"If states don't agree to the terms, the package is unlikely to take off," he said. |
The move comes in the wake of rising losses of cooperatives estimated at Rs 9,277 crore in 2002-03 and their declining share in rural credit from around 62 per cent in 1992-93 to around 34 per cent in 2002-03. |
Out of the total 367 district credit cooperative banks registered in various states, 144 are not complying with the minimum capital requirements. |
Considering the dismal state of cooperatives, the finance ministry had set up a task force under eminent agricultural economist A Vaidyanathan. |
In a report submitted to Finance Minister P Chidambaram, the panel recommended Rs 15,000 crore assistance over the next three-four years to revitalise the cooperative banks and credit institutions. |
It proposed that Nabard should be designated as the nodal agency for implementation of the package in phases and provide technical assistance. |
Mooting autonomous and self reliant cooperative system, the taskforce said the financial assistance would be contingent to legal, regulatory and institutional reforms. |
The panel proposed that the assistance should be shared by the Centre, states and cooperative credit entities. |
The task force also suggested that the state governments should cease to interfere in the financial management of state and district cooperative banks, which is expected to face resistance. |