The cooperative banking scene has witnessed a steep decline in financial standards and it explains the RBI laying down stringent rules for checking a bank’s financial health. However, the evolution of the strict norms by the RBI has ruffled the cooperative banking sector’s feathers.

Reduced to basics, the new tough parameters consist in directing the UCBs to maintain a gross non-performing assets ratio of 10 percent as against a net 10 percent in the former times. The banks not   conforming to the standard would attract punishment from the RBI.

The associations of the UCBs have expressed their serious reservations about various norms laid down by the RBI and warned the move could cramp the UCBs’ style.

The new norms would also mean capping loans at 70 percent of advances, deposits of 20 top account holders not exceeding 30 percent and the banks having capital adequacy less than 6 percent being put under the RBI’s scanner.

Ramchandra Mule who was recently removed from the Chairmanship of the Goa Cooperative Bank has gone to the Bombay High Court challenging his ouster.

In the petition he has asked the court to declare his removal illegal as out of 16 directors of the bank   only 8 of them had supported the no-confidence against him while a simple majority of 9 directors was needed for such a decision.

Earlier the High Court had dismissed Mr Mule’s petition challenging the notice issued by the registrar of cooperative societies for a meeting to take up the no-confidence motion against him.

However, in a turn of events that may yield Mule breathing space, the Supreme Court has granted him special leave to appeal the High Court’s order dismissing his earlier petition.

Financial inclusion is the zeitgeist of the contemporary world; we can barely construct a successful society if we tended to get away from the trend. It is regrettable that our banks have had a rather unedifying record in terms of accepting the spirit of the time.

Anand Sinha, Deputy Governor of the RBI has said the hoi-polloi inhabiting the country’s semi-rural and rural areas is still unbanked and under-banked. The banks’ services are exclusive of this huge population.

In Mr Sinha’s view, the urban cooperative banks could play an important role in bringing the poor within the banking framework.  As the poor could barely access commercial banks, the UCBs could cover them.

According to the RBI report, there are over 97 thousand cooperative banks in the country, UCBs count nearly 2 thousand. Altogether, the cooperative banks are a crucial link in the situation and their further expansion would do a lot of good in terms of financial inclusion. It is significant that both Sinha and the Y.H.Malegam Committee have favoured  a greater  presence of UCBs in the areas that are yet to be  banked.

The RBI report adds all is not hunky dory with the rural cooperative banks though the PACS are financially rundown and their capacity to be inclusive is severely limited.  Also the cooperative banks have been terribly slow in spreading their network in the North-East.

A Chinese dairy company is reported to have suddenly recalled  its milk products from the market. The move has followed the revelation that the company’s products were spiked with a chemical generally used in cleaning pipes.

However, sources say the reported contamination was not a suspicious deliberate act but attributable to leakage of the lye chemical into the production line of the milk factory.

The latest incident has blown a big hole in the already compromised image of the dairy industry in China. Already in 2008, a leading Chinese dairy company’s baby food had killed 6 infants and damaged kidneys of hundreds of thousands of babies.

Commentators say the incident is likely to dent the image of the Chinese industrial products worldwide at a time when   its economy is showing signs of  weakness.

Tamil Nadu Chief Minister J Jayalalitha has never been the kind of politician to mince words. In a missive   dashed off to Prime Minister Manmohan Singh she has severely criticized the central govt’s nutrient based subsidy scheme and graphically pointed out the perils of continuing with it.

She has called for an immediate abandonment of the scheme and underscored the need for reverting to the MRP method.

According to her, an unreliable supply of fertilizers to Tamil Nadu has followed the introduction of the scheme putting the basic interests of lakhs of farmers in the state in jeopardy.

She has added the NBS policy has given the freedom and wiggle room to manufacturers and importers of fertilizers to fix the MRP in the way they deem fit. In consequence, prices of fertilizers have gone up by 247 to 262 percent in recent days.

To make matters worse, Tamil Nadu Chief Minister says, the dept of fertilisers has effected a huge reduction in subsidy. Agriculture has become uneconomical in the state and farmers are suffering in multiple ways.

J Jayalalitha has urged Manmohan Singh’s intervention to redress the situation.

Question: I would like to start co-operative in my village and panchyat, initially I would like to work in the field of Dairy/Agriculture/Fruit and flower production.

I want to know how can I start it and from where will l arrange fund for these activities?

Is there any manual on cooperatives to guide any new entrant? Please help me so that I can go ahead with forming a cooperative. Alok Tiwary

I C Naik: Provisions incorporating a Co-operative Society in a village are laid down in the Cooperative Societies Act enacted by the State. Minimum number of members who can register a Cooperative Society is prescribed in that Act which is normally a two digit number, all being unrelated to each other.

Important criteria examined before registration is economic viability of a proposed society. Since an agriculture produce society is proposed the Agriculture Marketing Produce Society may be contacted to assess and estimate marketing prospects before-hand.

Following these steps are essential requirements. After these are accomplished a good ground for registering a co-operative is ready.

Finance is not scarce in this country, what is scarce is well meaning citizens who can work shoulder to shoulder on any project with patience and enthusiasm.

In a rare show of bonhomie, the entire cooperative sector of the country is gearing itself up to make IFFCO’s International Cooperative Conference a huge success. The two day conference is scheduled from 4th July at Manekshaw Centre in Delhi.

Be it Chandrapal Singh, President of NCUI or Virendra Singh, Chairman of NCCF, be it NAFED Chairman Bijender Singh or NCUI Chief Executive Dr Dinesh-all of them all have taken upon themselves the job of presiding over one session or the other at the conference.

“Cooperative Enterprises Build a Better World” would be the theme of the conference to be inaugurated by Pratibha Devisingh Patil, President of India at 11 am on 4th July.

Apart from IFFCO’s luminaries including Chairman NP Patel and US Awasthi many big international cooperative figures are also participating.

While Dame Pauline Green, President of ICA would speak on the significance of IYC , Wilson H. Beebe, Chairman of the Board, NCBA would recount the experiences of American cooperatives.

Sharad Pawar, Harish Rawat, Shivaji Rao Patil-you name them and they would be there in the first major show of Indian cooperatives in the international year of cooperatives,2012.

Dr Prakash Bakshi, Chairman of NABARD would hold forth on the relevance of IYC to Cooperatives.

Chandra Pal Singh Yadav, President, NCUI would chair the session on “Building a Better World- Global Challenges and Issues for Cooperatives” in which Dr. Dinesh, Chief Executive, NCUI, B.D.Sinha, Managing Director, KRIBHCO, Rakesh Kapur, Jt. Managing Director, IFFCO and Rajeev Gupta, IAS, Managing Director, NAFED would deal with the subject.

Shivpal Singh Yadav, a cabinet Minister in the UP govt would chair a session that would have speakers from China, Japan, Iran, Korea and Regional Director ICA Asia-Pacific.

Virender Singh, Chairman of NCCF would preside over a session in which Rafiqul Islam Rabin from Bangladesh B.K.Mishra, Managing Director, FISHCOPFED and Dr. K.G.Wankhede, CEO, IFFDC would speak.

The next day programme is scheduled at the NCUI Auditorium in which Dr. Bijender Singh, Chairman, NAFED would preside over the session “Women Empowerment and Cooperatives”. Dr Jaya Arunachalam, President, Indian Cooperative Network for Women in Chennai and Ms Armi Zainudin, Former Vice President, ANGKASA, Malaysia would speak.

NAFCUB Chairman H K Patil ,Sanjeev Chopra, IAS, C.B. Paliwal, Managing Director, NCDC, R.K.Tiwari, Jt.Secretary & Registrar (Cooperation), India would also deliver lectures on the concluding day of the conference. The latter would be wrapped up with Dr. U.S. Awasthi moving a Vote of Thanks.

Once again, there are allegations of corruption against officials working in the department of cooperation in Uttar Pradesh.  The government has put them under suspension.

Shivpal  Singh Yadav, Cooperative minister has charged that these officials  had committed serious irregularities during the Mayawati  government. The names of the officials have not been made public so far.

According to the minister, appropriate legal action would be taken against all the erring officials.

The new government of Akhilesh Singh Yadav and especially Shiv Pal Singh Yadav, the cooperative minister has been focusing on the cooperative sector in the state in a big way. But hope it is not a witch-hunting of those officials who were active during Mayawati’s regime.

According to the shareholders’ welfare and development body, the Imphal Urban Cooperative bank’s financial situation has come to a nadir as it is mired in corruption and mismanagement.

Addressing reporters, members of the welfare body said the bank is being controlled by the corrupt governing body and in consequence the bank could collapse anytime.

They added the bank had earlier a good financial background but the recent RBI enquiry has revealed a different picture.

The governing board, according to them, has not only used bank’s money recklessly but also violated the RBI guideline putting people on jobs without vacancies.

Given that there is a shortage of storage space in the state, the UP government has called a halt to the wheat procurement by the close of June.

There are seven agencies altogether including NAFED and NCCF involved in procuring grains. All of them have been stopped.

According to a govt. official, Pradeshik Cooperative Federation has also been  asked  to stop buying  wheat from farmers  without delay.

Worried about the safety of grains lying in open spaces, the govt has decided to organize the optimal distribution of grains through PDS.