ALAPPUZHA: The State Government will take action against those district cooperative banks that fail to give loans to farmers at an interest rate of five per cent as stipulated by the Government, Minister for Cooperation G. Sudhakaran has said.

He was inaugurating a seminar on ``Cooperative sector'' organised by the Department of Cooperation and Alappuzha District Cooperative Bank here on Tuesday. Mr. Sudhakaran said the Government would not disband administrative committees of any district cooperative bank on the basis of political affiliation of office-bearers. At the same time, those banks that failed to fulfil their responsibilities should not expect any mercy, the Minister said.

Mr. Sudhakaran said the National Bank for Agriculture and Rural Development (NABARD) earlier black listed State cooperative bank, as its non-performing assets crossed the stipulated limits. But the NABARD removed it from the black list following assurances of State Government and had allotted credit to State Cooperative Bank (SCB) at an interest rate of 2.5 per cent, said Mr. Sudhakaran. He said the district cooperative banks should collect the credit from the SCB and distribute it at an interest rate of five per cent to farmers. He said the Government would sternly handle those banks that failed to do so.

Speaking on the accumulation of non-performing assets (NPAs) of the SCB, Mr. Sudhakaran said large-scale corruption hitherto unheard had been taking place in the SCB. The bank provided loans to 20 paper organisations to tune of Rs.110 crore that had become a huge burden to the bank, the Minister said. He said those organisations did not return a single rupee more than three years after they took the loan.

Mr. Sudhakaran said it was in the context of the fraud in the SCB that he criticised a section of the IAS officials. He said there were IAS officials who were prepared to do anything if they had the support of the leadership. Mr. Sudhakaran said as Minister, he had never asked any official to circumvent laws to accommodate his men.

Mr. Sudhakaran said though six IAS officials were working with him, only one person was complaining that he could not get along with the Minister. Mr. Sudhakaran said though he did not want to disclose in public why the particular person was complaining things would come out soon.

He said no IAS officer should think that he could peck the Government. ``The Ministers and IAS officials do not have any special rights,'' he said.

Mr. Sudhakaran said the officials of cooperative banks and members of local bodies should work in tandem to reduce the non-performing assets of cooperative banks. While action should be taken against those who deliberately failed to repay loan, a lenient attitude was needed in the case of extremely poor people who could not repay, the Minister said. He said the State Government would continue its fight against the stipulation of Union Finance Department that cooperative institutions needed to pay 30 per cent tax on its profits. Mr. Sudhakaran said the cooperative banks should appoint only professionally qualified persons in future.

Alappuzha district panchayat president R. Nazar presided. Those who spoke included K.S. Manoj, MP, and NABARD Chief General Manager B.S. Shekhawat.

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