Two days meet of members of NAFSCOB from April 28 to 29 in N Delhi is going to be stormy. The members sounded quite belligerent on the issue of getting their demands met at the Press Conference organized by NCUI on Tuesday in New Delhi. The two days meet is titled “ National Consultation and Review Meet on Implementation of Revised Revival Package of Short Term Cooperative Credit Structure” as recommended by Vaidyanathan committee report.
Listing his demands the Chairman of NAFESCOB, Dr Bijender Singh told media that Vaidyanathan Committee report is applicable only from 1997 onwards. Accepting the report in toto, the government has given a package of Rs 71000 crores which has helped coop banks in big way, added Dr Singh. Banks were able to improve their balance sheet and some dead ones have sprung to life. But those farmers who took loan before 1997 have been left out and Dr Singh demanded them to be included.
The government is giving loan to the state cooperative banks at the rate of 4percent and expects that coop banks will disburse the loan at the rate of 7 percent to farmers. But this loan amount is forwarded to State Cooperative banks which in turn forward it to district cooperative banks and then to Primary credit cooperative bank. Now because of these structures, without which the loan cannot reach to farmers, the cost of loan goes up to 9 percent. In other words, coop banks are bound to be in loss because of lacuna in the system . Dr Bijender demanded correction in this anomaly so that Coop bank could operate better. Commercial banks have their branches only in cities and are not bothered with farmers woes but we are the implementing agency of the Govt , quipped Dr Singh. Recovery is poor as our farmers depend on the vagaries of climate. Being the social face of the govt we cannot be ruthless on the lines of commercial banks , yet we are expected to get result like them ,lamented the Chairman.
But what seems to have seized entire NAFESCOB is the issue of income tax which was imposed on cooperative banks in 2006. Dr Bijender Singh was emphatic that this must go at least for those banks which are operating in rural areas and which does the job of strengthening the cause of Govt. What even the first Prime Minister Jawaher Lal Nehru did not do, Chidambrem in his earlier avatar as Finance Minister did. He imposed income tax on cooperative banks, lambasted Dr Sigh. He plans to meet the Prime Minster and UPA Chairperson for removal of income tax burden on cooperative banks. Many members including Jigneshwer Prasad from Orissa echoed his sentiments and told media that they will support whole heartedly any decision of launching nation wide protest including closing the coop banks for a day or two that our chairman decides to undertake.
Describing the agenda of the Meet, the Managing Director of NAFESCOB Mr Bhima Subrahmanyam told media that the Meet will examine the problems being faced by states in bringing suitable legal reforms whereby Viadyanathan report could be implemented. He further said that CRR should be reduced for cooperative banks to 3 percent. But his most vehement request pertained to creation of a separate apex body following the Rakesh Mohan Committee report for cooperative banks. NABARD which does the refinancing to cooperatives is burdened with a number of responsibilities and we need a dedicated apex body , Mr Subrahmanyam added.