Fair or unfair?: The revised charges announced by private banks, followed by industry leader SBI, has been received badly by the public. Services cannot be free. Banks have invested in technology and human resources. A decade ago,...

The Hindu Business Line, March 8, 2017

Reinvent cooperatives

The message contained in the well-researched ‘Cooperatives should reinvent themselves’ by MV Sasikumar and B Niranjan Raj Urs has come at the right time. Cooperatives have had more than their share of problems post-demonetisation. While primary cooperative banks whose functioning is similar to mini-commercial banks are regulated and supervised by the RBI, the tier structure of cooperatives have multiple regulatory and supervisory oversight involving RBI, Nabard and the Registrar of Cooperative Societies.
There are no alternative conduits to ensure banking service to clientele in semi-urban and rural areas. Cooperatives need to survive, and issues like politicisation, inadequate skills, or problems arising from the dual control of cooperatives by the Centre and States should be set aside by the judiciary, governments and cooperatives themselves for a short period. There is need for cooperation among these agencies.
Short-cuts being tried can only lead to more complications. They include bypassing DCCBs, diverting the business now being done by cooperatives to other agencies, and taking the problems to court, thus postponing decision-making. The historic reason for the present state of affairs include the straying away of Nabard constituted with the specific purpose of supporting the institutional framework responsible for agriculture and rural development from its focus on cooperatives and RRBs to greener pastures like SHGs with commercial banks’ involvement.
At this stage the Centre should empower state-level taskforces involving RBI, Nabard, banks and State governments to resolve the problems .
MG Warrier


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