While the Nafcub leaders are waiting to meet Union Finance Minister Arun Jaitley regarding their expectations from the NDA govt’s last budget, its President Jyotindra Mehta had already met Union Minister of State for Finance Shiv Pratap Shukla handing him over a list of demands.
Summarizing the expectations of the UCB sector, Nafcub Chief Executive Subhas Gupta said “Primarily we have four demands which we would like the present govt to solve before the election dates are announced.”
It bears recall that last week Nafcub President Jyotindra Mehta not only met the Minister of State for Finance but also Central Board of Direct Taxes Chairman Sushil Chandra to discuss the issues facing the urban cooperative banking sector. They had also knocked at the door of BJP President Amit Shah on the issue.
Besides budget expectations, Mehta had also raised issue of Income Tax woes being faced by co-ops in general and Sauharda co-ops in particular. Amit Shah, is believed to have immediately intervened and a relief from IT dept to Sauharada co-ops is on the way, claims a FB post of Jyotindra Mehta.
Coming to the “Four Big Points” CE Subhas Gupta said the issue of 80 P continues to be UCBs’ main concern. Removed by P Chidambram in 2007-8 the matter has failed to gain the sympathy of subsequent govts including the BJP’s.
Piyush Goyal during his short stint as the minister showed some inclination to amend the law favoring UCBs but before he could do so, Jaitley resumed his duties as the Finance Minister. following his discharge from the hospital. Several leaders of Sahakar Bharati have confided to this correspondent on condition of anonymity that the matter cannot be resolved till Jaitley is there at the helm of affairs.
The second major issue, according to Gupta is that of 80C of IT Act. While the Scheduled Banks do get tax relief under 80 C for five year deposits, the vast majority of non-scheduled banks under UCB sector do not enjoy this benefit. “Nafcub demands from the Finance Minister that such a partisan approach to the non-scheduled banks should be done away with”, said Gupta. UCB has just 54 Scheduled Banks.
The third major demand of Nafcub is removal of the ban which exists when it comes to giving loans to UCB’s directors. The rule prevents the UCBs from offering loan and advances to the Directors or their family members. The Rule came into being in the wake of several cases of them not repaying their loan amounts.
Batting for lifting this ban Nafcub CE Gupta argues “It looks ridiculous that a Director goes to other banks to seek loan; a few black sheep cannot be allowed to sully the image of the UCB sector and we ask the govt to review this blanket ban” Nafcub’s last demand is an increase in the DIGC coverage up to Rs five lakh. Currently the coverage is only up to Rs one lakh. In every budget the govt assures of increasing this but they have yet to do it, said a cooperator.