In a significant move for India’s cooperative finance sector, the Ministry of Cooperation held a high-level meeting on Wednesday to deliberate on enhancing concessional funding and credit support to NABARD and NCDC, a step that could strengthen the lending capacity of Cooperative Banks and Credit Societies across the country.
The meeting, chaired by Cooperation Secretary Dr. Ashish Kumar Bhutani in New Delhi, focused on key policy and regulatory issues related to Urban Cooperative Banks (UCBs), cooperative credit flow and institutional financing. Discussions also covered issuance of banking licences for UCBs, governance reforms and measures aimed at modernising the cooperative financial ecosystem.
The proposed enhancement in support to NABARD and NCDC is being viewed as an important policy signal for the sector. Higher and cheaper institutional funding could improve refinance availability for Cooperative Banks and expand loan support to PACS, urban credit societies, dairy cooperatives and other grassroots cooperative institutions.
Sector observers believe the move may help cooperative institutions improve liquidity, strengthen rural and semi-urban lending and expand financial inclusion at the grassroots level. The deliberations also indicate the government’s intent to deepen the role of cooperative finance institutions in India’s overall credit delivery framework.
The meeting was attended by Sanjay Lohiya, Special Secretary, Department of Financial Services (DFS); Pankaj Kumar Bansal, Additional Secretary, Ministry of Cooperation; Dr. Debashish Prusty, Additional Secretary, DFS; Anand Kumar Jha, Joint Secretary & Central Registrar of Cooperative Societies (CRCS); Raman Kumar, Joint Secretary, Ministry of Cooperation; Ms. Shwetha Rao B., Director, DFS; Kumar Ram Krishna, Director, Ministry of Cooperation, along with other senior officials.
The developments assume significance as the Ministry of Cooperation has recently intensified consultations on issues affecting cooperative credit institutions.
A few days ago, Pankaj Kumar Bansal, Additional Secretary in the Ministry of Cooperation, also held discussions with Pankaj Jindal, Joint Secretary, Department of Revenue, regarding taxation and compliance concerns faced by cooperative credit societies and cooperative banks across the country.
Sector representatives have increasingly flagged operational and financial stress arising from tax disputes and complex compliance procedures, particularly among smaller cooperative societies operating in rural and semi-urban areas with limited administrative and technical resources.
