Date:20/01/2008 URL: http://www.thehindu.com/2008/01/20/stories/2008012055810700.htm

National

Cooperative credit institutions to get a major boost in J&K

Shujaat Bukhari

State to implement Vaidyanathan Committee report

The State would shortly sign an MoU with the Centre to push a package of Rs.248 crore
All cooperative banks would be eligible for low-cost refinance from NABARD

SRINAGAR: Cooperative credit institutions in Jammu and Kashmir are all set to get a boost now with the State Government agreeing to implement the Vaidyanathan Committee report on revival of such institutions in the country. The State would shortly sign a memorandum of understanding with the Centre to push forward a package of Rs.248 crore for the purpose.

Maintaining that this package would go a long way in revitalising the cooperative credit institutions in J&K, Agriculture and Cooperatives Minister Abdul Aziz Zargar told The Hindu that the State Cabinet had already approved the Vaidyanathan Committee report and now the modalities were being finalised.

Stating that the Government was concerned about the falling health of these institutions and he as a minister had worked hard to revive them in the past five years, he added, “Our efforts have yielded good results in their revival but by implementing this package these institutions will get a boost.” He clarified that the package was only for revival of the institutions and not for individual borrowers who were bound to pay the loan back to these banks.

Out of Rs.248 crore, 68 per cent is to be given by the Centre and 28 per cent by the State Government while these institutions will bear 4 per cent. The package, he said, would cover the losses up to March 2004.

‘Historic decision’

Terming it as a historic decision, Mr. Zargar said that under the package deal all the cooperative banks would be eligible for low-cost refinance from NABARD for further loaning in the agriculture and allied sectors. “Our cooperative banks will become strong enough to compete with other public sector and commercial banks,” he said.

The package was, in fact, negotiated with Prime Minister Manmohan Singh by Deputy Chief Minister Muzaffar Hussain Baig in 2005. Cooperative Societies Registrar G. N. Qasba, who was part of the team at that time, said that modalities for ensuring the package were being worked out now and NABARD had been designated as the nodal agency.

NABARD, he said, would audit all these institutions to cross-check the facts and implementation would start. “For banks it will come in one go while for other institutions the time limit is three years,” Dr. Qasba said.