The Assembly on Wednesday passed the Kerala Cooperative Societies (Third amendment) Bill 2013, clearing the way for district cooperative banks to admit individuals as nominal or associate members.
During the discussion in the House, Opposition members put up stiff resistance to the amendment, terming it as a move to strangle cooperative institutions. They said it would open a doorway for corporates out to gobble cooperative banks. The Treasury Benches said it was a timely reform and would help ensure financial discipline in cooperative banks.
Presenting the resolution on the amendment, Cooperation Minister C.N. Balakrishnan said the proposed changes were in line with the Reserve Bank of India’s directive to the State government to ensure a minimum of 7 per cent CRAR (Capital to Risk-weighted Asset Ratio) by all district cooperative banks and the State Cooperative Bank by March 31, 2015.
Opening the debate, P. Sreeramakrishnan said the proposed hike in CRAR would burden the primary shareholders of cooperative banks and bring down credit disbursement to farmers and needy sections. He said the Income Tax Department was carrying out raids on cooperative banks with the intention of destroying their credibility and scaring off depositors.
Former Cooperation Minister G. Sudhakaran said the amendment was part of a move by the RBI and Nabard to choke the cooperative movement in Kerala. Terming the Opposition’s concern baseless, V.D. Satheesan said the proposed reforms would help to bring cooperative banks out of the red and avoid financial mismanagement.
