Centre taking special steps to revive ailing Co-operative banks: Mahendra Bhatt

my uttarakhand news Bureau
Dehradun, 17 Dec: The Central Government has stated that it is undertaking special efforts to improve the financial health of 63 cooperative banks currently facing weak fiscal conditions. The Centre has further stated that key measures being taken in this regard include granting permission to open new branches, reducing lending targets, and facilitating one-time settlements for outstanding loans.
This response of the Centre was given in the Rajya Sabha to a question raised by BJP MP and BJP State President Mahendra Bhatt during Question Hour. Bhatt had raised questions in the House regarding the Centre’s scheme for cooperative banks with poor financial standings across the country. In response, Minister of State for Finance Pankaj Chaudhary stated that according to information provided by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD), a total of 47 urban cooperative banks and 16 rural cooperative banks, comprising one state cooperative bank and 15 district central cooperative banks, are under financial stress.
The government has launched various initiatives to strengthen these cooperative banks. Under these guidelines, the urban cooperative banks have been permitted to open new branches to expand their business operations. Furthermore, relief has been provided to urban cooperative banks by reducing the Priority Sector Lending (PSL) target from 75 percent to 60 percent. The National Urban Co-operative Finance and Development Corporation Limited, a non-deposit-taking non-banking financial company, has been established as an umbrella organisation for urban cooperative banks to provide information technology infrastructure and operational support.
Similarly, according to Chaudhary, the cooperative banks have now been permitted to enter into one-time settlements for outstanding loans, bringing them on par with commercial banks. To ensure transparency and protect the interests of depositors, the government has also amended the Banking Regulation Act. These amendments ensure that the tenure of the members of the Board of Directors of cooperative banks, excluding the Chairman and full-time directors, has been limited to a maximum of 10 years.