Highlighting key challenges faced by cooperative societies across the country, Sreedhara Neelakanta Rao, Founder President and Director of GnanaShale Multistate Cooperative Society Ltd., has urged the Ministry of Cooperation to initiate policy reforms to strengthen the cooperative sector.
Rao said that addressing certain systemic issues could significantly improve the financial health and growth of cooperative institutions, thereby contributing to the national economy.
Among the major concerns raised was the reluctance of banks and financial institutions regulated by the Reserve Bank of India to take over or refinance loans of cooperative societies. He also pointed out that temple trusts, Section 8 companies, NGOs, and other non-profit organisations often hesitate to park deposits with cooperatives.
Rao further stressed that Bank Guarantees (BGs) and Earnest Money Deposits (EMDs) issued by cooperative societies should be accepted by government departments and private entities for contract-related activities.
He also proposed the introduction of a Depositors’ Insurance Guarantee Scheme and a CIBIL-like credit appraisal system for cooperative borrowers.
According to Rao, such reforms would make cooperatives more inclusive and financially robust, helping them play a stronger role in India’s economic growth.