The State government has rejected a directive of the National Bank for Agriculture and Rural Development (NABARD) to primary cooperative banks (PCBs) to stop accepting deposits and transfer their equity, loans, and deposits to district cooperative banks (DCBs) as recommended by the Prakash Bakshi Committee.
In a press note here on Saturday, the State Registrar of Cooperatives said instructions had been issued to all PCBs and DCBs not to comply with the NABARD circular of July 22 in this regard till they received instructions from the State government or the Registrar of Cooperatives.
Under the Kerala Cooperative Societies Act, no society registered under it could transfer to another its deposits or loans alone. The State government had also not signed any agreement with the Central government or the NABARD for inclusion of such a provision in the Kerala Cooperative Societies Act.
Unlike in other States, primary cooperative credit societies were performing exceedingly well in both deposit mobilisation and extension of credit.
As such, the State Cooperation Minister had written to the Union Finance Minister in February this year pointing out that the Prakash Bakshi recommendations were not suited to Kerala context, the Registrar said.
The Registrar said NABARD had not forwarded its July 22 circular to the Cooperation Secretary or the Registrar of Cooperatives, though it had been issued to all State cooperative banks and district cooperative banks.
The government had come to know about it from newspaper reports, he said (The NABARD circular and its implications for Kerala’s primary cooperative banks were first brought out by The Hindu in a news report on Friday.)
‘Withdraw circular’
Meanwhile, in a statement here on Saturday, Finance Minister K.M. Mani called upon the NABARD authorities to immediately withdraw its circular, which would cut at the very root of around 1,600 primary cooperative banks in the State.
The PCBs, with a combined deposit base of Rs.75,000 crore, constituted the foundation of Kerala’s financial structure.
Destruction of such a structure, which catered to the financial needs of around 2.45 crore members, would lead Kerala to financial anarchy, he said.
