RBI moots state panels to resolve co-op woes

The Reserve Bank of India (RBI) has recommended state level committees to resolve the problems of co-operative banks.

The panel for Gujarat will have one representative each from the RBI, state government, Gujarat Urban Co-operative Banks (GUCBF) and the National Federation of Urban Co-operative Banks Credit Societies (NAFCUB).

The committee will discuss issues related to co-operative banks, the GUCBF said in Ahmedabad on Friday.

At the 19th Standing Advisory Committee meeting of the RBI, which was held in Mumbai earlier this week, GUCBF said the apex bank had shown a positive attitude towards co-operative banks and has assured all support to strengthen them.

GUCBF secretary Pankaj Shah said V Leeladhar, deputy governor of RBI, who was recently appointed for looking into co-operative bank matters, emphasised on the need to close down financially non-viable banks to strengthen the co-operative banking sector. Shah also stated that the RBI has decided to hold a meeting of the standing advisory committee every quarter.

Before December 8, 2004, the standing advisory committee had met on December 16, 2002. Shah said since December 2002, more problems have cropped up in Gujarat's co-operative banking sector.