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Singh to finalise co-op revival package soon

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Press Trust Of India New Delhi
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.

 
 

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First Published: May 16 2005 | 12:00 AM IST

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