Date:12/08/2005 URL: http://www.thehindu.com/2005/08/12/stories/2005081205190500.htm

Karnataka - Bangalore

H.K. Patil demands better deal for cooperative banks from Centre, RBI

Staff Reporter

"When the Global Trust Bank collapsed, the Reserve Bank of India stepped in. But the cooperative banks are not given their due."

A COMMON MEETING POINT: Minister for Law and Parliamentary Affairs H.K. Patil, Legislative Council Chairman V.R. Sudershan and Opposition Leader in the Legislative Council D.H. Shankaramurthy at the inauguration of the conference hall at the Legisla tors' Home in Bangalore on Thursday. — Photo: K. Bhagya Prakash

BANGALORE: The cooperative banks have long been discriminated against despite their fulfilling many social and traditional obligations that cannot be addressed by the commercial sector, Law and Parliamentary Affairs Minister H.K. Patil said here on Thursday. Mr. Patil was inaugurating a training programme for urban cooperative banks organised by Karnataka State Cooperative Federation Ltd.

He criticised the Centre and the Reserve Bank for their policy of going soft on commercial banks even while ignoring the cooperative banks. To tide over huge losses and misappropriation of funds, the Centre allocated Rs. 25,000 crores to commercial banks. When Global Trust Bank collapsed, the Reserve Bank of India stepped in.

But the cooperative banks were not given their due recognition nor is their credibility quotient appreciated, Mr. Patil said. Referring to new norms to convert lending or loans to non-performing assets after 90 days, he asked which cooperative bank can be expected to meet these norms when they are expected to reach out to people who need small loans and a large number of people who are dependent on these loans to invest for livelihood.

Western concepts such as the Basel II norms, and non-performing assets are not a part of Indian ethos, and should not be forced on the cooperatives that cater to agriculture-dominated clientele, he said.

New challenges

G.T. Deve Gowda, Hunsur MLA and Chairman of the federation, said the training programme where the Reserve Bank officials, banking experts and others would will give lectures and updates, is meant to help cooperative banks gear up to the new challenges in the World Trade Organisation regime.