Referring to recommendations of the Rakesh Mohan Committee that cooperative banks must have a licence before March 2012, Mumbai Chief Minister Prithviraj Chavan has said “I request GOI to advise RBI to reconsider the time limit prescribed for obtaining the licence by banks so that the flow of agricultural credit is not hampered in areas where these banks operate.”
Maharashtra Central Cooperative Bank and 11 district central co-op banks were yet to receive licences, he said.
He made these demands at a meeting of Chief Ministers of western zone states called by Union Finance Minister Pranab Mukherjee on Saturday.
“Most of these banks either have negative net worth or CRAR much less than four per cent…It seems unlikely that they will be able to satisfy the conditions for securing licences before March 31, 2012,” he said.
He urged banks to increase their share in crop loan disbursement. He said while the HC had ruled that guarantees revoked by the bank could not be honoured by the government unless the assets of borrowers were liquidated, the NABARD had insisted that the amount of guarantee that had been defaulted be made available by the government.