Reacting to cooperators charges that the govt speaks highly of the co-operative sector but it does little for it union Agriculture Minister Radha Mohan Singh said had this government been not there, several things capable of destroying co-operative institutions would have come into legal existence.
Every month I along with the Ministry’s officials sit with Sahakar Bharati leaders to monitor if anything wrong is going on in the cooperative sector. The exercise has helped us save cooperatives from several pernicious acts, he said hinting at the possibility of not allowing bills such as conversion of UCBs into commercial entity or bill for unregulated deposits. Minister was speaking at a function of Sahakar Bharati in Delhi.
Readers would recall the RBI Deputy Governor R Gandhi’s recommendations for conversion of urban cooperative banks into commercial entities had been fiercely opposed by cooperators. The recommendation called for conversion of banks doing Rs 20,000 crore business into commercial ones.
Co-operators have argued that Urban Coop Banks should be allowed to grow to their full potential and restrictions should not be imposed on their aspirations. The limiting factor for UCBs has been that they cannot participate into 12 core business activities such as road constructions, offering bank guarantees and many other things.
The second dangerous proposal was the Inter-Ministerial Group (IMG) report on unregulated deposits. According to the report, multi state co-operative and credit societies cannot accept deposits. The proposed bill called for banning of Unregulated Deposit Schemes and Protection of Depositors’ Interests Bill (Banning Bill).
Ruffled by comparison with ponzy schemes in the wake of Shradha and other frauds especially in the eastern part of India, cooperators sought to draw the government attention to the basic difference between credit cooperatives and ponzy schemes.