Speaking on the topic ‘Cooperative Credit Guarantee Fund’ in the webinar inaugurated by Prime Minister Narendra Modi, Nafcub President Jyotindra Mehta said to help co-ops, the Ministry of Cooperation may create a National Cooperative Credit Guarantee Trustee Company (NCCGTC) on the lines of National Credit Guarantee Trustee Company (NCGTC) which has been created by Finance Ministry to provide credit guarantee to various types of businesses.
“Eligible Lending Institutions under various trusts to be managed by NCCGTC would be all cooperative banks and multistate cooperative credit societies that fulfil certain minimum criteria in respect of their financial health”, he added.
In his speech Mehta suggested, only loans under schemes that are finalized by the proposed National Cooperative Credit Guarantee Trust Company under Cooperation Ministry as above, to cooperative societies, and also loans that are not included for guarantees by schemes of NCGTC, by cooperative banks & other banks, will be eligible”.
It may be pointed out that an important segment of the cooperative credit sector is the 1541 strong Urban Cooperative Banking Sector, with an aggregate deposit base of over Rs 5 lakh crores and loans of Rs 3 lakh crores.
It may be observed that none of the schemes include cooperative banks as eligible lending institutions (ELIs), except those few which are scheduled cooperative banks members of IBA. The credit again goes to this government that they have announced this year to include non-scheduled cooperative banks as ELIs for one of the schemes, CGTMSE, for micro and small enterprises, he said.
National Credit Guarantee Trustee Corporation (under DFS, MOF) presently overseeing the 5 trusts with a committed credit guarantee corpus of Rs 13000 crore can also add two funds for financing 3 by all ELIs to the cooperative sector, one for loans given to agricultural cooperatives and the other for loans given to non-agricultural cooperatives. If NCGTC is not in a position to include the credit guarantee portfolio of cooperative societies then the Ministry of Cooperation may create National Cooperative Credit Guarantee Trustee Company (NCCGTC) NCCGTC.
He demanded that the Govt should create systems and schemes to encourage cooperatives to modernize and create new age cooperatives. This can be done through NCDC by having a separate corpus to give seed money to new age cooperatives.
“Urban Cooperative Banks should be given permission to give credit to primary level cooperatives. For instance, if the consumer co-op of Rajkot wants to avail the loan from Rajkot Nagarik Sahakari Bank, we can’t give loans to them because they cannot become our members. We request the Ministry of Cooperation to think on this subject”, he concluded.