MYSORE: The Union Budget has come as a shock to cooperative banks, members of the Comptroller's Office Bank Cooperative Ltd. has said. They demanded restoration of tax concessions to cooperative banks.

A release here said that cooperative banks were extended tax concessions because their main criterion was service.

But with liberalisation, these banks have lost their privilege of special protection, and have been forced to compete with financial institutions including commercial and multinational banks. It is unfortunate that while giving concessions to the rich and having made cars and colas cheaper, the Finance Minister has decided to discourage the cooperative movement, the release said. Cooperative banks have to earmark sixty per cent of their lending to the priority sector while commercial banks give only 40 per cent. Cooperative banks are not allowed to invest their surplus even in mutual funds. They have to invest in Government securities and they were forbidden from liberlising their lending, it said. In Karnataka, the Government charges an audit fee of Rs. 7 lakhs for audit of a bank with Rs. 35 crores, the release said.

Printer friendly page  
Send this article to Friends by E-Mail