THIRUVANANTHAPURAM: Cooperation Minister G. Sudhakaran has said the State Government is prepared to sign the Centre's revival package for cooperative banks in the State if the Reserve Bank of India (RBI) and the National Agriculture Bank for Rural Development (NABARD) amend some of the conditions.

But NABARD Chief General Manager (CGM) B.S. Shekhawat has said much of the Minister's apprehensions about the norms to be followed by cooperatives to use the package are `unfounded.' The Centre has promised to sanction Rs.1,000 crore for the revival of the State's cooperative sector.

Talking to The Hindu on Wednesday, the Minister said the Government had already held two rounds of talks with RBI officials on the package. ``We have told them that we are ready to continue the discussions. But they have not yet responded.'' Some of the conditions proposed by the RBI and NABARD for getting the benefits of the package are not acceptable to the Government.

According to Mr. Sudhakaran, the attempt of the RBI and NABARD is to convert the cooperative sector into a network of institutions on the lines of Self-Help Groups (SHGs) and bring cooperatives under the control of the RBI and NABARD. They do not want the Government to have any say in the affairs of cooperative societies and want to take away their democratic character.

NABARD CGM said the first condition of the package was that cooperative societies must have duly elected governing bodies. But the election process should be truly democratic with due representation to all sections of the stakeholders including the depositors. The second condition is that they should be run and audited by professionals.

Mr. Sudhakaran said the cooperative societies in Kerala had a unique history. With a network of about 25,000 societies, Kerala accounts for nearly 30 per cent of the institutions in the sector in the country. They have acquired an important stature in the State because of the participation of the ordinary citizen. Also, they are able to function so effectively because of Government support. So cooperative activists and the Government should have a control over the societies.

Mr. Shekhawat said NABARD and the RBI were interested only in those 1,637 cooperatives in the State which called themselves as banks. They together have mobilised about Rs.32,000 crore as deposits from the people. This is indicative of the trust that the people have in them, and this is precisely the reason why the RBI and NABARD want them to be run professionally as per the Banking Regulations Act.

Reacting to the allegation that the State Government was trying to divert the funds from the cooperative sector, the Minister said, ``We don't buy the argument that cooperative societies can lend money to anybody but the Government. The Kerala Government had taken only Rs.340 crore as loan from the cooperative sector, and had paid Rs.370 crore as interest just two weeks ago. That loan is now being rescheduled. But some of the district cooperative banks had lent Rs.1,000 crore to private parties, and the amount is now remaining as Non-Performing Assets (NPA).

Asked about the reports that West Bengal had already singed the revival package, the Minister said, ``We have asked NABARD and RBI officials to show us the documents to support their claim that the West Bengal Government has signed the package. But they have not yet shown us the documents. If the conditions agreed by West Bengal are acceptable to us, we will also sign the package.''

Mr. Shekhawat said the Kerala Government should write to the RBI and NABARD about their reservation on the specific clauses on the conditions attached to the revival package.

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