Move to bring cooperative banks under RBI evokes mixed response

The Union Cabinet’s approval to bring cooperative banks under the supervision of the Reserve Bank of India has evoked mixed response from the Cauvery delta farmers.

While some of them appreciated the move saying that it would bring in financial discipline among the cooperative banks, others claimed that the move would shatter the very base of the cooperative network whose objective was to extend financial assistance to small and marginal farmers with minimum formalities and requirements.

As far as Tamil Nadu was concerned the primary agriculture cooperative societies (PACS) do not have the nomenclature ‘urban’ in their name but their activities are guided by the Tamil Nadu State Apex Co-operative Bank Limited.

Hence, farmers feel that Union Cabinet’s nod for the new Ordinance has set the stage to bring the functioning of the primary agricultural cooperative societies under the purview of the RBI since the TNSC Bank extends credit facilities to the societies through the District Central Co-operative Banks and gets refinance from the National Bank for Agriculture and Rural Development for extending credit to the farmers for short-term agricultural operations.

Stating that it would be beneficial for the farming community if bringing in financial discipline in the cooperative banking/credit facility network was the prime objective of the new Ordinance, general secretary, Tamil Nadu Cauvery Delta Farmers Welfare Association, S. Ranganathan and general secretary, Federation of Farmers Association of Delta Districts, Arupathi P. Kalyanam said. But they added that the move should be implemented in such a manner that the interests of small and marginal farmers were not affected.

Pointing out that nearly one-third of the agricultural lands in delta districts stand in the name of Hindu religious institutions, they claimed that imposing the same rules being followed in scheduled commercial banks for availing loans in cooperative societies would put the tenant farmers in a disadvantageous position.

Expressing similar view, the president, Thamizhaga Vivasayigal Nalasangam, G. Sethuraman, wanted the Ordinance to have some special provisions to safeguard the avenues available for small and marginal farmers to avail credit facilities with minimum formalities.

Hailing the move, the secretary, Thanjavur District Cauvery Farmers Protection Association, Sundara Vimalanathan, expressed hope that it would result in more transparency in the credit operations of the primary agricultural cooperative societies since the co-operative credit institutions enjoy immunity from the Right to Information Act. Further, it would also weed out “political influence” in the functioning of the PACBs and societies, he felt.

Terming the move as a step aimed to reduce the importance of the State government in the co-operative banking sector, the president, Tamil Nadu All Farmers Association Coordination Committee, P. R.Pandian, and the president, Uzhavar Aran, Arun Masilamani, urged the Tamil Nadu government to oppose the Ordinance tooth and nail to protect the interests of small and marginal farmers.

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Printable version | Aug 12, 2020 4:40:49 AM | https://www.thehindu.com/news/cities/Tiruchirapalli/move-to-bring-cooperative-banks-under-rbi-evokes-mixed-response/article31916150.ece

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