Date:16/08/2006 URL: http://www.thehindu.com/2006/08/16/stories/2006081608160400.htm

Tamil Nadu

Cooperative banks staff seek repeal of IT Act amendment

Special Correspondent

Amendment allows levy of income tax on cooperative banks' profits
Expert committee to strengthen urban cooperative banks sought

Regularisation of services of 25,000 employees demanded

TIRUVANNAMALAI: The Tamil Nadu Cooperative Bank Employees Association (TNCBEA) has urged the Centre to repeal the amendments introduced to Section 80 P of the Income Tax Act that allows levy of the tax on cooperative banks' profits.

At its fourth conference, which concluded here on Tuesday, the Association demanded refinance by the National Bank for Agricultural and Rural Development (NABARD) to the extent of 80 per cent of the crop loans disbursed by cooperative banks.

By a resolution, it urged the Centre to constitute an expert committee to strengthen urban cooperative banks and relax liberalising norms for identifying non-performing assets.

The conference urged the Tamil Nadu Government to implement the Vaidyanathan Committee's recommendations by signing an agreement with the Centre for minimising its control over cooperative banks. It also urged the State Government to secure Rs. 800 crore as recapitalisation assistance to primary agricultural cooperative banks (PACBs) and district central cooperative banks from the Centre's Rs.14,000-crore package.

Congratulating Union Finance Minister P. Chidambaram for extending the package, the conference hailed the State Government's decision to reopen and revitalise 199 PACBs in the State. It urged the Government to reopen the Madurai Urban Cooperative Bank.

The conference adopted a resolution urging the Government to regularise the services of 25,000 employees whose were working since 1980. Another resolution urged the Centre to bring all cooperative banks under the ultimate control of the Reserve Bank of India. It wanted the Government to honour its promise of granting pension to cooperative bank employees.

"Increase subsidy"

TNCBEA president N. Sampath thanked the Union Finance Minister for reducing the interest rate on crop loans by two per cent, but said it was insufficient. He requested the Tamil Nadu Government to increase subsidy to cooperative banks to enable them to remain strong and provide fresh loans to farmers.

TNCBEA general secretary P. Balakrishnan appealed to Mr. Chidambaram to increase NABARD refinance to cooperative banks to 80 per cent of their disbursements.

All-India Bank Employees Association general secretary C.H. Venkatachalam assured the Minister that the AIBEA would cooperate with the Centre in its efforts to strengthen public sector banks.