The draft circular released by the Ministry of Cooperation related to prudential norms for Multi State Cooperative Societies in the business of thrift and Credit, has become an issue of discussions among cooperators associated with these co-op bodies across states.
It bears recalling that the Ministry of cooperation is seeking feedback on the draft circular from the representatives to all 613 Multi State Credit & Thrift Societies till 13th September 2023.
Several co-operators, the Indian Cooperative talked to, are opposed to some provisions of the draft as some of them feel that the provisions of Banking Regulation Act are being imposed on Multi State Credit Cooperative Societies.
In response to the Ministry’s initiative, a series of meetings are going on in different states and more particularly in Maharashtra, which claims to be having a large number of credit co-ops.
One of such meetings was called recently by Sahakar Bharati in collaboration with Buldana Urban at Pune. Another meeting of cooperators associated with Multi State Credit Co-ops was organized by Federation of Multi State Cooperative Credit Societies at Ahmednagar, Maharashtra.
Talking to the Indian Cooperative correspondent, Sahakar Bharati National General Secretary Uday Joshi said, “We are not against the draft circular as such but some of its norms are not in the interest of credit co-ops. We are preparing a note on the reactions we are getting from cooperators for submitting to the Union Ministry of Cooperation”.
“Earlier, when these norms were implemented in cases of UCBs, they faced many challenges but it took several years for them to adopt the same. Would it not be too early to impose these tough norms on Multi State Credit Co-ops almost without a warning”, asked Joshi.
He further added that there are many avenues for urban cooperative banks to recover dues but going for arbitration seems to be the sole way for credit co-ops to recover dues. The Union Ministry of Cooperation should also focus on this. Earlier on several occasions we demanded a separate body for protecting deposits of Credit Co-ops on the lines of DICGC but to no avail.
“The provisions of the Banking Regulation Act are being imposed on credit cooperatives and it is not fair. In Maharashtra, in the past the state registrar office issued prudential norms for credit co-ops of the state and this may also be replicated in the working of Multi State Credit Cooperative Societies. There are 13,500 credit co-ops in Maharashtra out of which 9700 societies are in profit”, said Joshi who is on the board of Nafcub.
Sahakar Bharati National General Secretary further added that the aggregate exposure limit for cooperative
Many other cooperators said the Union Ministry of Cooperation should first do the survey of Multi State Credit Cooperatives across states and seek their views before releasing a draft circular for prudential norms for multi-state credit co-ops.
It is being said that the prudential norms draft circular has been released as per the study prepared by NAFCUB. On the instruction of the Ministry of Cooperation, Nafcub constituted a committee but no representatives from credit co-ops were there in the committee, claimed co-operators, some of those connected to credit co-ops complained.
The copy of draft circular can be accessed by clicking on the link given below:
Read More: Co-operators not happy with provisions of Draft of Prudential Norms