The Hindu : Andhra Pradesh / Hyderabad News : 1,500-cr. NABARD aid for cooperatives

Online edition of India's National Newspaper
Wednesday, Aug 30, 2006

Andhra Pradesh

Andhra Pradesh - Hyderabad

1,500-cr. NABARD aid for cooperatives

Special Correspondent

To cover 2,746 PACS, 22 DCCBs, APCOB

PACT FOR AID: NABARD Chairman Y.S.P. Thorat and G. Sudhir, Principal Secretary, Cooperation and Marketing after signing an MoU in the presence of Chief Minister Y. S. Rajasekhara Reddy in Hyderabad on Tuesday. Minister for Cooperation K. Lakshminar ayana is also seen. — PHOTO: K. RAMESH BABU

HYDERABAD: Andhra Pradesh has signed a memorandum of understanding with the National Bank for Agriculture and Rural Development (NABARD) to receive Rs. 1,500-crore assistance to streamline three-tier cooperative credit institutions.

The package will cover 2,746 primary agriculture cooperative societies (PACS), 22 district central cooperative banks (DCCBs), and Andhra Pradesh State Cooperative Bank (APCOB).

The MoU was signed by G. Sudhir, Principal Secretary, Cooperation, and Y. S. P. Thorat, NABARD chairman, on Tuesday in the presence of Chief Minister Y.S. Rajasekhara Reddy. Andhra Pradesh is the first State to enter into such agreement with NABARD in line with the Vaidyanathan Committee recommendations for restructuring of cooperative institutions to be eligible for assistance. Dr. Reddy and Dr. Thorat described the MoU as historic.

State to contribute

Cooperation Minister K. Lakshminarayana said the State would contribute Rs. 500 crores, raising the total amount available for restructuring to Rs. 2,000 crores. This would be sufficient to wipe out the accumulated losses of all the banks.

He said NABARD was expected to release 75 per cent of the assistance in three months after similar agreements were signed by PACS with DCCBs, and the DCCBs with APCOB, and enactment of the new Cooperative Act.

The State would claim the 25 per cent later after appointing chief executives to these banks and citing the completion of elections to all the banks. As a result, the crop loans to farmers were expected to touch an all-time high of Rs 3,343 crores for 2006-07.

Widespread sickness

The Chief Minister said 19 of the 22 DCCBs and several PACS in the State had turned sick. As a result, the credit had touched a new low and allowed rural banks to gain an upper hand. He hoped that the NABARD assistance would go a long way in toning up the cooperative system.

Mr Thorat said the cooperative bodies would hereafter be independent without any Government interference and be accountable to stakeholders. They would be computerised shortly but without any retrenchment and their officers trained in line with the new goals.

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