A Sahakar Bharati delegation led by Satish Marathe National President called on Union Finance Minister Arun Jaitley last week in the latter’s office in Delhi and made a detailed presentation on several issues worrying the urban cooperative banks and credit societies.
Among other things, the delegation argued strongly for the withdrawal of Income Tax on UCBs. It said that co-operatives by definition are Mutual Societies and are worldwide subject to Tax Laws.
Quoting the World ?Organisation of Coop Credit Union (WOCCU)’s figures it said that 67% countries in Asia, 62% in Africa, 81% in Latin America, 94% in Caribbean and 38% in Europe do not tax Co-operatives.
Other points raised included deductions u/s 36 (i) (vii) and 43 (D) be allowed to all UCBs.
The delegation also said that all demands, notices, etc made/issued by the Income Tax Department in respect of TDS for the past years be ?withdrawn and from 2015-16, the limit for deduction of TDS be raised from Rs 10000/- to Rs 50000/-.
As part of the public policy, the Govt of India and the RBI should immediately start licensing those UCBs having a background of healthy performance in the UCB Sector (A & B rated 1075 UCBs account for 85% of the Business), the high-profile delegation pleaded.
It was also brought to the notice of the Hon FM that there are small and big countries whose population is much smaller than that of India and yet have larger number of UCBs vis a vis their population/size eg.? ?Austria – 570, Finalnd – 220, France – 2500, Australia – 135, US – 8400. It was also stated that the contention of the RBI is not tenable as India ?has only about 1600 UCBs.
As regards raising of Capital for UCBs, it was suggested that the UCBs be allowed to Issue Rated Irredeemable Bonds and that the same be listed on a specially formed Exchange and that the GOI may constitute a Committee comprising of Representatives of the Govt of India, the RBI, and the Co Op Sector to work out the modalities/details.
It also demanded that all UCBs be recognized as Banking Organizations under SARFAESI Act and UCBs be included as Eligible Lending Institutions under Credit Guarantee Fund Scheme.
The RBI should issue guidelines for determining exclusive exposure limit for Housing Loans, independent of Commercial Real Estate, UCBs be permitted to open Sukanya Samridhi Account and nationalised Banks should fully involve core banking compliant UCBs in opening accounts under Pradhan Mantri Jan Dhan Yojana, the presentation demanded.
Besides Marathe those comprising the delegation included Jyotindra Mehta, Chairman, Gujarat Urban Banks Federation, Vice President, Sahakar Bharati, Vidyadhar Vaishampayan, Director, NAFCUB, Co Convener, UCB Cell, Sahakar Bharati, Satish Utekar, Alternate Chairman, UCB Committee, Indian Banks’ Association, D Krishna, Ex-CEO, NAFCUB and Lakshmi Narayan Gupta, President, Sahakar Bharati, Delhi.
The Co-operative sector is optimistic about this interaction with Arun Jaitley. Several cooperators Indian Cooperative contacted said the delegation comprised of people close to the government. And unlike others such as NCUI President and Nafcub Chief, the team carried greater weight given its ideological affinity with the present regime.