The Joint Parliamentary Committee tasked with reviewing the MSCS Amendment Act 2022, met representatives of several co-op bodies last week to seek their views on various aspects of the new law, before finalizing its report to be placed in the Parliament.
Though none of those who appeared before the JPC were willing to say anything on the issue, Indian Cooperative has gathered that representatives of NCUI, NAFCUB, Nafscob and three agri business co-ops IFFCO, Kribhco and Nafed presented their cases and argued their points last Friday.
During the meeting, organized at the Parliament Annexe and chaired by CP Joshi, the representatives raised issues on several provisions, additions and deletions of MSCS Amendment Bill, 2022, for ensuring the comprehensive growth of UCBs.
Around 16 members of JPC drawn from both Houses attended the meeting. NCUI’s CE Sudhir Mahajan, IFFCO MD Dr U S Awasthi, Nafcub President Jyotindra Mehta, Kribhco MD Rajan Chowdhary, Nafscob Chairman K Ravinder Rao and Nafed MD Rajbir Singh were the officials who represented their respective organizations.
While putting forward their suggestions before the JPC, the NAFCUB representative suggested, “There are a large number of sections and subsections that require either to be omitted altogether or modified substantially in respect of multistate cooperative banks. If this is done through provisos and modifications under each head we may lose sight of many of them which could create complications later on”.
“It is suggested that on the lines of Sec56(AACS) in the case of Banking Regulation Act 1949, wherein a separate section was introduced for the Act to be applicable to cooperative banks, a separate section called Sec (AAMSB) be included that will either modify or omit each of the sections of the MSCS Act in order to make them applicable to multi state cooperative banks”.
“This is perhaps essential in view of the Banking Regulation (Amendment) Act 2020 as also the provisions of the 97thConstitution Amendment which is applicable in its entirety to the multistate cooperative societies”, they informed.
The Nafcub delegation also made the JPC aware that the proposed amendments are not addressing the issues like the absence of provision for empowering coops to enter OTS, no provision to promote/facilitate opening of new coops under the MSCS act etc.
“Just as the Banking Regulation Act (Amendment) 2020 empowered Coop Banks to raise Long-term Funds/Capital by issue of Bonds & Equity, there is no such provision in the proposed Amendment. Merely allowing Coops to issue Non voting Shares is not enough”, they added in their presentations.
Among other proposed amendments, NCUI touched on the issue of custody of the Cooperative Education Fund which it wants to be in the custody of the apex body in order to uphold the principles of autonomous cooperatives.
The Cooperative Education Fund was created under the Multi-State Cooperative Societies Act, 1984, and has been maintained by NCUI since inception as per the guidelines of the government. The Education Fund committee in which NCUI President is the Chairman, also comprises senior officials of the Ministry whose approval is taken before sanctioning funds for various education and training programs.
NCUI felt that if the Central Government takes control of this fund, then at the state level also respective state governments may take control of such funds, which may affect activities of education and training at the state level. The members felt that in accordance with cooperative principles, the government should allow cooperatives the needed autonomy instead of controlling them.
Later, tweeting about the meeting, JPC Chairman CP Joshi wrote, “Presided over the meeting of the Joint Parliamentary Committee (JPC) on multi-state cooperative societies in New Delhi today. In the said meeting, the members of the committee discussed the Bill related to Multi State Cooperative Societies”.
