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| Recapitalization of Central Cooperative Banks | | | R.B.SURI
For the revival and rejuve
nation of the Central Cooperative Banks presently operating in the state, a provision of more than 366 Crores of rupees under "Recapitalization Package" has been kept by the Governor Administration. It is likely that by getting the huge amounts under the "Recapitalization Package", these CCBs are getting the DECADRON for their ultimate survival and for remaining in the banking operations in the state of Jammu and Kashmir. Requisite sanction was given by the SAC in its meeting held on December, where under three Bills on Central Cooperative Banks(CCBs) and Bovine Breeding stand approved.One of the bill will be an amendment to the existing J&K Cooperative Societies Act 1989, It provides the powers to the State Government to manage the affairs of the CCBs of the state by the Professional Managements ( Board of Directors) for two years instead of six months (stipulated in the provisions earlier) thereby replacing the J&K Cooperative Societies (amendment) Ordinance2018 promulgated by the J&K Governor on June 14 this year. This amendment will also help to various revival packages of the Central and State grants for such banks. It will also enable the State Government to constitute the Professional Boards for the three CCBs - Anantnag , Baramulla and Jammu for managing their affairs and the judicious use the recapitalized amount of Rupees 367 crores for attaining and maintaining the Capital to Risk Asset Ratio ( CRAR).Certainly, these two bill on Cooperative will bring a sea change in the working of the Cooperative sector as a whole. There will be the revitalization and Rejuvenation of the various Cooperative whose financial heath was deteriorated. The CCBs in the state shall be observing the provisions of the Banking Regulations Act and will be duly licensed by the RBI after availing of the Recapitalization package announced by the Governor Administration. According to the other bill on the Cooperatives is pertaining to the J&K Self Reliant Cooperative Act of 1999 as an amendment. This amendment will regulate the activities of the self reliant cooperatives and will protect the interests of the members and the depositors. Needless to mention here, that it has also been noticed by the State Government that some self reliant cooperatives are indulging in the banking activities without the permission of the regulatory authority- RBI ( as per the provisions of the Banking Regulation Act). Since there was no provision in the J&K Self Reliant Cooperative Act of 1999 for cancelling the registration of the Self Reliant Cooperatives, therefore, provision for the cancellation of the registration was required very much as an obligatory on the part of the State Government to meet such necessary requirement. In order to avoid the misuse of the Self Reliant Cooperatives, this provision was necessary to protect the members and the depositors as well.
It is the bad luck for the cooperative institution in the country that "COOPERATION "is in the "State List" for which only the States of the country are the only the competent authorities to deal with the subject independently. This should have been in the 'Concurrent List' about which State and Central Governments may legislate issues of the "Cooperation" the at least. Since "COOPERATION "is a State subject, there remained always the undue political interference of the local politicians into the sensitive affairs of the cooperative institutions in the country. They commit the grave mistakes and the irregularities in handling the affairs of the cooperative institutions independently resulting which they have become almost defunct/ dormant and are of no use . They go detrimental to the interests of the farming community at large.
Undue political interference of the politicians of the country should be made to halt at this stage only if the GOI really do something positive for the farming community so that the cooperative institutions may function smoothly. It is just to apprise the readers that there are three Central Cooperative Banks working in the state.
These are - Jammu Central cooperative Bank, Anantnag Central Cooperative Bank and Baramulla Central Cooperative Bank. Earlier, these were declared by the NABARD as the Weak Banks and now since they were not going in accordance with the stipulations as per the Banking Regulations Act, they were de-licensed by the Reserve Bank of India since more than three to four years because their liquidity position was bad enough as also due to their assets erosions as well. Though they are working in the field of Banking but with certain restrictions imposed by the RBI / NABARD.
Their creation was made for the financing of the three tiers of the Cooperatives i.e. Primary Cooperatives Societies (PACS), Cooperative Marketing Societies (CMS) and the Apex Societies like JAKFED and CONFED. JAKFED is very much in the field of doing something for the farmers and in the past, it met with the large scale embezzlements and misappropriations affecting its financial structure to the large extent but CONFED due to its malfunctioning, is under liquidation process at the moment whereas the Primary Agriculture Cooperative Societies (PACS) and Cooperative Marketing Societies(CMS) are so weak that these are not in a position to render any effective support to the farming community of the state which is unfortunate indeed. After every year or so NABARD usually conducts the Statutory inspections of these CCBs and sends its reports to the Managements of these banking institutions pointing therein about the irregularities and the defects for getting them corrected or removed and where some leakages in funds are observed during the course of its inspections, ask for compliance with regard to the removal of the defects and the irregularities pointed out. This is regular phenomenon indeed. The J&K State Cooperative Bank ( called as Apex Coop. Bank) finances the CCBs after availing of the concessional finance from NABARD at the concessional rates of interests. Its financial position is reported to be good and where as the CCBs are doing the agricultural business besides the commercial business also.The State Cooperative Bank based at Srinagar and it doesn't have its any branch at Jammu which is a matter of serious concern. Apart from the CCBs, Urban Cooperative Banks (UCBs) are also in the banking field but they are doing the commercial banking. They are - Devika Urban Cooperative Bank Udhampur, Citizens Cooperative Bank Jammu and Mercantile Cooperative Bank in Srinagar with a net work of several branches in their respective areas of their jurisdiction. RBI conducts the Statutory Inspections of these UCBs.
Another feature which is very important to discuss here that the Managements of the CCBs and the SCBs are not professional ones as the State Governments usually appoint the defeated politicians to man the affairs of these financial institutions in the country as the Chairmen who act arbitrarily in adjusting their kith and kins ( who don't possess the requisite qualifications for the posts ) Appointed personnel generally the blue eyed commit grave mistakes/irregularities in these institutions and after committing the same go scot free because of the political patronage, they enjoy their luxurious lives without any fear. Solution to this aspect is that RBI/NABARD should make a strong strategy to deal with this unwanted situation having the unhealthy financial position of these institutions and should depute its well experienced officers of high caliber to these financial institutions for at least 5 years in order to put the same on the rails once again. This act of the RBI/NABARD would generally be welcomed by the people of the country and would be in the interests of the cooperative movement in the country or in the alternative the RBI/NABARD should suggest for the constitution of a Recruitment Board to select the professionals for the cooperative financial institutions working in the country. We are living in the digital era these days and there is a immediate need for the total digitalization of all the cooperative financial institutions working in the country as also for the online banking also so as to enable to do their jobs effectively and to compete with the commercial banks.
The sorry state of affairs in the cooperative institutions in the state of Jammu and Kashmir these days is a matter of concern for all of us. Prior to 1990s, the 'Cooperative Structure' was good enough but now it has become a liability rather a deformed and defunct one. It was declined particularly during the National Conference Rule in the state. One should not forget about its achievements in the state in the past. The cooperative movement in the state flourished well during 1960-1987. But with the passage of time it went on ruined by the successive State Governments. Due care was not taken at all by the State Governments of the time and rather allowed it go beyond its control. For taking the undue benefits from it, various politicians who remained in power in the state gave unnecessary intervention in the affairs of the various institutions which fall within the ambit of the 'Cooperative Structure' in the state. Sorry to comment upon that the concerned ministers who remained at the affairs adjusted / appointed their nears and dears in the cooperative institution without applying their minds properly as there was no specific need of the same as also financial health of these institutions was not good at all resulting which they all became under RED .This aspect had tarnished the very image of the cooperative institutions. Now, with the sincere and concerted efforts of the Governor Administration and through this "Recapitalization Package" to the CCBs and captioned two amendments as discussed, the cooperative movement would certainly get the boost in delivering the goods to the farming and trading community in the state besides general public at large. It has been learnt from the reliable sources that some exercises have already started by the Governor Administration in providing the Professional Board of Directors to these CCBs very soon. |
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