A meeting was held under the chairmanship of Union Ministry of Cooperation Secretary Ashish Bhutani at Atal Akshay Urja Bhawan to discuss several topics related to the cooperative sector. Besides several representatives of Kheti Banks, Nabard Chairman Shaji KV was also present in the meeting.
The issue related to providing banking licenses to ARDBs also came up for discussion. The other items on the agenda included Availability of Block Guarantee from State Governments and Computerization of ARDBs
During the meeting, Bhutani reviewed the status of computerization of PACS and preparation of SOP for nationwide implementation of the pilot project launched in Panchmahal and Banaskantha districts of Gujarat.
It is learned that the Nafcard Chairman Dollar Kotecha was also invited for the meeting but due to the last minute engagement, he couldn’t attend. On behalf of Kotecha, Gujarat’s Kheti Bank Managing Director K.B.Upadhyay, Joint MD V.M.Chaudhari were present.
In the meeting, Gujarat’s Kheti Bank team demanded that ARDBs should be given banking license to provide banking services to the general public on the lines of other RBI licensed banks working in India. At present, ARDBs can only be able to accept public deposits but they can’t borrow short term and saving deposits from the market. Due to this, these banks are facing a severe shortage of resources to meet the demands of their members.
Besides, ARBDs are not allowed to implement various game changing government schemes for farmers including Agri Infra Fund, the interest subvention scheme for crop loans and the same scheme for education loans and others.
One of the representatives of ARDBs said, “RBI has not prescribed norms for granting banking licenses to ARDBs so far. LTCCS therefore, seek intervention of GOI to facilitate framing of appropriate norms by RBI to give banking licenses to SCARDBs, either as Primary Cooperative Banks’ or as ‘Small Finance Banks in the Cooperative Sector.
It bears recalling that the task force strengthening the rural credit system headed by former Deputy Governor of RBI Jagdish R Capoor (1999) recommended that SCARDBs should be converted into full-fledged banks under the BR Act 1949.
There are 16 SCARDBs out of which 13 are functioning fully but the financial conditions of a few ARDBs are just up to the mark and many ARDBs are affected by a higher level of NPAs.