The Hindu : Kerala News : Bank chief slams report on credit

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Wednesday, Jun 27, 2007
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Kerala

Kerala

Bank chief slams report on credit

Staff Reporter

Says if implemented it will destroy cooperative sector in the State

‘Move to give cooperative banks to banking giants’
‘Cooperative banks part of a unique system’

PALAKKAD: P.A. Ummer, Chairman of Kerala Cooperative Development and Welfare Fund and President of Palakkad District Cooperative Bank, has said that the move to implement the report of the Task Force on Cooperative Credit System, headed by A. Vaidyanathan, will destroy the State’s cooperative-credit sector.

Hidden agenda

In a statement released to the press recently, Mr. Ummer said the move had a hidden agenda to hand over service cooperative banks to new-generation and giant commercial banks.

He said these cooperative banks, spread over all panchayat areas in the State, made up a unique banking system.

But the task force and the Centre did not see their achievements and the democratic system in which they worked under the control of the Reserve Bank of India (RBI) and the State Government.

These banks had the rural poor, farmers, agriculture workers and so on as share holders and members.

The State had a share in these banks, with its Cooperative State Partnership Fund. But implementation of the report would result in their going into the hands of depositors who could use their money power to take control of these institutions.

Government share

The task force had recommended that the banks return the Government share. No State had demanded it. He said that to bring a Central Bill for the cooperative sector, a State subject, the Union Government had a hidden agenda.

The move would take away the control of the State Government on these institutions and give them to the RBI. The elected ruling committees of the banks could be dismissed by the RBI under the new law. Now, only the State Government had that power.

Mr. Ummer demanded major changes in the report to help retain the well-spread banking credit system. A debate on the recommendations had to be conducted with leaders of the cooperative sector, the State Government and the shareholders.

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