Kerala - Kochi   

Panchayats told to deposit money in cooperative banks

KOCHI: The ongoing sixth Cooperative Congress, which began here on Friday, called for orders to make three-tier local bodies deposit their money only in cooperative banks and not anywhere else.

Cooperatives, it said, should be involved in Plan formulation by local bodies. Laws should be framed to ensure compulsory involvement of cooperatives in agriculture.

Establishment of coordination committees for grama panchayats, krishi bhavans and primary cooperative societies to ensure that seeds and fertilizers reach farmers in time was another suggestion that came up on the first day of the congress.

The leaders of the cooperative sector, who have congregated for three-day deliberations, felt that involving cooperatives in Plan formulation could ensure that they would be part of project implementation.

The congress felt that the Kerala Cooperative Act should be amended to create an atmosphere in which administrators of cooperatives could take independent decisions and act on them.

Classification norms for cooperative societies, a more scientific audit system and development of software for cooperative audit were other suggestions for improving the operations of cooperative institutions.

The congress felt that a panel of experts should be constituted to monitor interest rates on both deposits and advances. Under the current rules governing lending, the primary cooperatives would not be able to make a two per cent margin. Steps should be taken to ensure that these societies earned at least four per cent margin.

The cooperative societies should be allowed to change interest rates as was done by commercial banks. Either the cooperatives should be able to decide on rates or the monitoring cell comprising experts should meet frequently to decide on rate changes, the congress said.

The congress called for an end to the competition between district cooperative and primary cooperative banks. For this, district cooperative banks had to end the practice of offering higher interest rates on deposits than those offered by primary cooperative banks.

The congress called upon the State government to pressure NABARD to change its norms on refinance so that farmers were able to get sufficient money to start their operations in the background of agriculture input cost going up steadily.

Formation of local-level consortiums that operate like financial institutions is another demand raised by the congress. Financially sound primary banks at taluk levels can be made lead banks and the consortiums should be allowed to lend to the government’s development programmes.

The congress called for changes in the norms governing promotion of personnel running the cooperatives.

These and other important changes are needed to ensure that the cooperative sector can face up to the challenges posed by rising cost of operations, globalisation and the competition in the banking sector.

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