The Hindu : National : Cooperative societies need restructuring: Chidambaram

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Monday, Oct 24, 2005

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Cooperative societies need restructuring: Chidambaram

Staff Reporter

`Newer forms of credit delivery need to be identified'

BANGALORE: Union Finance Minister P. Chidambaram on Sunday favoured restructuring of cooperative societies to ensure that credit reached farmers in a more effective way.

Inaugurating the Platinum Jubilee year celebrations of the Vijaya Bank here, he said the Vydyanathan Committee had submitted a blueprint to strengthen credit in rural areas. The committee had also suggested introduction of a model cooperative law, he said.

Calling credit delivery a "daunting task," he said there were 10-crore farmer families in the country and all the credit institutions put together had provided credit to 4.67-crore families and the rest borrowed money from money-lenders who charged a hefty interest. Hence, it was essential that the Centre identify newer forms of credit delivery through regional rural banks.

"The Centre will also convene meetings with the Chief Ministers to arrive at a consensus on strengthening cooperative institutions," he said.

Lauding Karnataka, the Minister said it was among the few States that had lent farm loans at 6 per cent interest. The Karnataka Tank Project, he said, had been adjudged a model project to restore tanks.

"Karnataka is the only State which has a comprehensive medical scheme for the poor," he said.

The bank's Chairman and Managing Director, K.S. Kapur, announced a reduction of 0.5 per cent in the interest on loan to various categories.

`Unfortunate'

Speaking to mediapersons after the function, Mr. Chidambaram termed "unfortunate" the resignation of Infosys Chairman and Chief Mentor N.R. Narayana Murthy as head of the Bangalore International Airport Limited.

While refusing comment on the controversy, he said he was unhappy but efforts were being made to convince Mr. Narayanmurthy to withdraw his resignation.

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