Reacting to the issue of two-tier vs three tier structure for co-op banks, NAFSCOB President K Ravinder Rao has clearly indicated his preference for the three-tier structure. Rao quotes the example of Kerala, among others, to prove his point.
It bears recall that Andhra Pradesh Employees Association (APCCBEA) protested earlier for the implementation of a two tier system for co-op banks in the state. Several co-operators associated with co-op banking have reacted to the issue with some for the idea while majority being against the idea.
Those in favour of a two-tier structure argued that it will help the farmers as well as banks in the loan recovery process but several others are against the idea arguing it will not work.
Talking to Indian Cooperative Nafscob Chairman K Ravinder Rao said, “If a two-tier structure is implemented in the state, it will not work properly. As we have seen in the state like Kerala where the apex bank is weak and PACCs are very strong but the formula of two tier has failed to take shape”.
“Several northern eastern states have adopted the two tier structure. States like Uttar Pradesh and Punjab are also going forward with the idea of two tier structure but there are total uncertainties regarding its outcomes; we have to wait and watch. In principle I am opposed to the idea”, Rao, who is heading a three-tier structure committee underlined.
Lending support to his NAFSCOB Chairman, its MD Bhima Subramanyam wrote “the Ministry of Cooperation, GOI has commissioned a study on ” Relevance, applicability and retention of three-tier Short term Cooperative Credit Structures under the chairmanship of Deputy Managing Director, NABARD. This will be a very good and probably last opportunity to place justifiable views in favour of the well-conceived 3 tier ST coop credit structure.”
It bears recall that even Sahakar Bharati is opposed to the idea of two tier arguing at present DCCBs are taking care of PACCs societies in their respective districts but after the merger who will take care of these PACCs which have been associated with DCCBs for a long time.
Andhra Pradesh State Cooperative Bank CEO Shreenath Reddy said “Mostly we are neutral on this subject and the government has to take the decision on this issue but if I am asked a choice we would like to add that the present three tier system is good and we have to keep the cooperative character alive”.
“At present we are not facing challenges in running the bank. There will be positive as well as negative results if the two tier system is implemented in our state”, said Reddy on the phone.
Eluru District Central Cooperative Bank Chairman Narasimha Raju said we are in favor of a two tier structure as it will strengthen the banks as well as would be good for farmers. It will help in recovering loans. We request the government to think on this subject.
Eluru DCCB has a business mix of more than Rs 4000 crore and 254 PACCs are associated with it. The bank has 34 branches across the district.
Prakasam District Central Cooperative Bank Chairman Dr Madasi Venkaiah said, the two tier structure will help to recruit employees directly on merit basis. If the staff of banks get professionalized, it will ultimately help the farmers as well as the growth of the banks. We demand implementation of a two tier structure.
The said bank’s business mix of Rs 2700 crore and over 170 PACCs are linked with it. It has a network of 29 branches across the district.
Chittoor District Central Cooperative Bank Chairperson M Reddamma said, we are not in favor of adopting a two-tier structure because it’s not so easy to manage the financial system at the state level and to know the problem at the grassroots level. My appeal that DCCBs should be continued.
There are 13 district central cooperative banks in Andhra Pradesh with 415 branches. 1993 PACCs are associated with them. The good thing is that all banks are in profit.
