Despite catering to the needs of nearly one billion people worldwide, cooperatives have failed to elicit matching response from the governments, said Dr Dinesh, Chief Executive of National Cooperative Union of India.

Dr Dinesh was, however, unsatisfied with the over-all performance of the cooperatives in India. Our International year of Cooperative pledge reads;“Cooperative enterprises build better world”. But how could we keep this pledge without professionalizing the cooperative team?

The relation of cooperative members to the cooperatives operating in Indian villages is restricted to getting a sack or two of fertilizers, seeds or other such requirements. He is not involved in its operations. There is no professional way of doing business, he lamented.

Unless the PACS become a whole game that survive on their own and conduct business through professional expertise, the slogan “cooperative builds better world” would sound hollow, he said in a frank chat with Indian Cooperative.

Mentioning America as an example, Dr Dinesh said 97 percent of the US’s energy needs are met through cooperatives. In Singapore majority of fair price shops are run through cooperatives, he added.

He felt that the government of India is ignoring the role of cooperatives for economic growth of the country. The absence of word “cooperative” in the five year plans for two consecutive terms comes as a shock to him.

If nuclear power could be generated by government and salt by TATAs why not allow cooperatives in the agricultural field where it is already doing 50 percent of the business, Dr Dinesh asked.

Cooperative banks are at receiving end in the wake of the Cobrapost sting which eposed some top banks involved into money-laundering. Nabard Managing Director Prakash Bakshi has, however, taken up cudgels on their behalf.

NABARD said that it has found no shortcoming pointing towards any such activity.

“Every year we do an inspection and we have not found anything like that,” National Bank for Agriculture and Rural Development’s (NABARD) chairman Prakash Bakshi said.

Reserve Bank of India has reportedly found that cooperative banks are used as conduits.

The cooperative banks tie-up with scheduled commercial banks to expand their reach. Co-operative banks can accept cash under Rs 50,000 from customers and earn commission.

When asked about the misuse of the system and if this amounts to regulatory arbitrage, Bakshi said, “It is the same regulation for everybody. Banking Regulation Act is same for everybody.”

Online portal Cobrapost had in its sting operation allegedly proved some executives at three top private banks — ICICI Bank, HDFC Bank and Axis Bank – agreeing to receive unverified sums of cash and put them in their investment schemes and benami accounts in violation of anti-money laundering laws.

Earlier this month, it had followed up with a similar operation, showing executives at over 20 financial institutions, including State Bank of India and Life Insurance Corporation of India, offering similar services.

The Reserve Bank has maintained that no transaction has happened while the sting also does not point to “money laundering”.

RBI Governor D Subbarao has also said: “RBI is not directly involved… even banks are not directly responsible. They are not expected to inquire about the source of income. It is for government and tax authorities to check money laundering.”

Courtesy: IE

The leading cooperative of the country IFFCO has strengthened its
commitment for Indian farmers by ensuring long term supply of raw
material of Phosphatic Fertilisers.

The world’s largest manufacturer and marketer of processed fertilizers in cooperative sector announced the signing of a Long Term Agreement with the Brazilian mining giant Vale SA for the supply of Rock Phosphate.

The LTA was signed by Mr.K.L.Singh, Director (Technical) of IFFCO and
Mr Roberto, Director Commercial of Vale, SA.

According to the agreement, the Rock Phosphate will be supplied from
Bayovar mines which are located in the Piura province of Peru.

Almost 90% of Phosphate demand of India is met through imports. India
ranks the largest importer of Phosphate globally.

Talking to Indian Cooperative Dr U S Awasthi, Managing Director of
IFFCO said that this LTA will be key to long term assurance for
phosphate fertiliser raw materials to Indian agriculture aiding to
increased food grains production.

“This is a step towards backward integration strategy of IFFCO in
order to strengthen its Phosphate sourcing for the manufacturing of
Phosphatic Fertilizers in India. Our commitment to farmers is always a priority” he added.

There are no deposits of Phosphates in India and country’s entire
Phosphate requirement is imported. IFFCO have two complex fertilizer
plants in India at Kandla and Paradeep. The DAP, NPK, NP plant at
Paradeep is world’s biggest complex fertilizer plant which is hailed
as world’s largest phosphoric acid plant with capacity of 2650 MT per
day of 100% P2O5

Over a judicious use of Education Fund, National Cooperative Union of India (NCUI) and the largest farmers’ cooperative IFFCO are once again at loggerheads. The Education Fund Committee that met sometime back diverted a sum of Rs 2 crore for the purpose of renovating the auditorium which hosts most of cooperative as well as non-cooperative functions.

IFFCO dissented and said that cooperative education fund, as the name shows, should be used for education and training and not for any other purpose, no matter how important.

Talking to Indiancooperative.com, Dr G N Saxena, Director of cooperative Development at Iffco animatedly argued that two proposals were before the Committee- one of starting the printing press lying in a shambles for some time and second, of renovating the auditorium.

While the first proposal was rejected outright, the second was discussed threadbare. I, being a member of the Committee objected to the idea of diverting a sum from Education Fund. Mr R K Tiwary, Central Registrar is also believed to have opposed the idea.

But Financial Advisor Mr Agnihotri, one of the two government nominees other than the Central Registrar is said to have supported the idea of diverting money to renovation.

Talking to the Indiancooperative.com Dr Dinesh, Chief Executive and DG of NCCT defended the decision of Committee and said that the auditorium is very much a part of education and training and given its bad condition, something needed to be done urgently. The air conditioners, chairs and other facilities cry for immediate attention, he added.

But Dr Saxena differed. “The auditorium is given on lease to a private party and it is using it for commercial purposes. How can the Education Fund which is being contributed by farmers in a way, be diverted for commercial gains of a third party”, he asked?

In the seven member Education Committee, NCUI has a majority and could get its agenda passed. The members from NCUI are President, DG of NCCT and head of Vaikunth Mehta, say insiders.

There are two members from Multi State Cooperative Societies and they are Iffco and Saraswat Bank. Due to medical problems, Saraswat Bank Chairman Eknath Thakur could not make it to the meeting.

There are two government nominees-the Central Registrar and the Financial Advisor. With the government nominees more often than not being absent, it is cakewalk for NCUI, said a source. However, both the govt nominees were present in the last meeting. These are quarterly meetings.

A cash-starved NCUI has more than Rs 330 crore lying in the Education Fund and the issue of diversion of fund keeps cropping once in a while.

National cooperative agriculture banks federation (Ncardbf)  has  come out in support of  FDI in the multi-brand retail sector arguing the move would  help farmers get better returns as well as enable them to pay bank loans.

As  the  foreign retailers  would   be in direct contact with farmers  getting  agricultural products from them , there would  be  more money coming  to farmers  and  the role of  the middlemen  would  stand automatically reduced,  said  Ncardbf MD Mr  Ravindran  while talking to the  press  in Chandigarh.

According to Ncardf , when  farmers get  better income  that means  their capacity to pay loans would rise.

Sources say state cooperative agriculture and rural development banks are active in 19 states altogether. The banks have put more than 15 thousand crore rupees in various forms and their NPA counts twenty percent, sources claim.

The meet in Chandigarh called upon the central govt to allow the banks to act as commercial banks. It also asserted that if the RBI permitted the banks to work as such it would go a long way in supplying the deficiency in banking services in the country.

NAFED’s Annual General Meeting at NUCI Auditorium in Delhi on Friday missed a stormy session by a whisker as delegates were prepared to voice their protest on the issue of share capital.

In a rarest of the rare cases delegates participating in the meeting forced the withdrawal of Agenda number-3.
Agenda number-3 was related to raising the share-capital price from Rs 40,000 to one lakh.

In an interview given to Indian Cooperative earlier, NAFED Chairman Bijender Singh had warned of disqualification in case of non-payment of the enhanced rate. Many of the delegates had also come, though reluctantly with a bank draft of Rs 60,000.

But the popular mood was against putting money in a sinking boat.

Indian Cooperative has learnt that there were backroom discussions between Nafed Chairman Bijender Singh and NCUI President Chandra Pal Singh Yadav in which the latter gave former an idea of restive mood of participants. Many of the directors also impressed upon the Nafed Chairman to understand the rebellious mood of delegates.

Some of the participants were prepared to raise their voice against the hike which might have led to an uncalled for situation. In a swift move the agenda was dropped before its turn came leading to wide applauds from the delegates.

Ram Kalebar Singh from Samastipur, Bihar who had raised the issue was quick to grab the mike and thanked the Chairman of staving off a storm.

Justifying their demand one of the delegates told Indian Cooperative that NAFED has not given us any dividend for a number of years. We have demanded to apply the new rate for new comers prospectively not retrospectively.

Speaking on the occasion Nafed Chairman Bijender Singh informed the delegates of steps taken by the Federation to recover the losses suffered by the agri-cooperative in tie-up business. The losses have accrued upto Rs 2000 crores, he informed.

Nafed has requested the government to give a bank guarantee of Rs 1200 crore to take care of the old loans and an amount of Rs 920 crores interest free loan for nine years, he added.

Bijender Singh also said that Nafed is taking all moves to recover the lost money with the help of investigating agencies including CBI. He promised to put Nafed back on the track with the help of governmental support.

Noida Soil Testing reports take ages to come and I request you to get it sent as quickly as possible, said Jaiveer Singh, a delegate from Hapur who had come to participate in the Kribhco AGM held on Thursday in N Delhi.

Krishna Lal from Bagpat wanted parity for cane growers vis a vis cooperative in matters of rate and availability of fertilizers. Khemchand Yadav from Jaipur wanted Kribhco to stress upon bio-fertilizer more and more.

In a free for all members’ AGM, delegates put across their point of views frankly. The Vice Chairman of Kribhco Chandra Pal Singh Yadav promised to accommodate as much as possible.

It was announced on this occasion that Kribhco has earned a pretax profit of Rs. 192.16 crores during the financial year 2011-12. Buoyed by the results, it declared a dividend @ 20% for Member Cooperative Shareholders, consecutively for the 8th year on this occasion.

The annual accounts have been approved by the Society in its 32nd Annual General Body Meeting held on Thursday at NCUI Auditorium in Delhi.

Kribhco Chairman V. R. Patel, Vice Chairman, Dr Chandra Pal Singh Yadav, Managing Director B D Sinha and all the directors attended the AGM. More than 510 delegates of member cooperatives from different parts of the country also participated.

B.D.Sinha, Managing Director informed Hazira Plant has maintained good performance during the year. On marketing front, Kribhco has positioned itself strategically and is committed to fulfill the aspirations of all stakeholders, said Mr Sinha.

KRIBHCO has also diversified into Infrastructure business and established a subsidiary “KRIBHCO Infrastructure Ltd.,(KRIL)”. KRIL has established Inland Container Depot (ICD) at Hazira and Rewari. Further two more ICDs are under advanced stage of construction at Modinagar and Hindaun. KRIL has eight rakes and 1500 containers.

On this occasion, two eminent cooperators were honoured by KRIBHCO for their pioneering works. The “Sahakarita Shiromani” samman was awarded to Smt. Leeladevi R.Prasad from Karnataka and the “Sahakarita Vibhushan” samman was awarded to Shri Vitthalbhai H.Radadiya from Gujarat. Both eminent cooperators are said to have acted as catalyst for the national cooperative movement.

Vipul Chuadhary had hardly settled down after winning the coveted post of GCMMF’s Chairman when the news of the demise of Verghese Kuiren shook the nation in general and Amul in particular.

Chaudhary, meanwhile, had plunged headlong into steering Amul towards still greater heights. Indian Cooperative caught up with him and requested him to unveil his future plans.

excerpts:

Question: How did you feel about the departure of Amul’s father-figure Dr Verghese Kurien?

Vipul Chaudhary: Dr Kurien was our guide and friend and it is difficult to come to terms with his passing away.
I C: But he was not active in recent years?

Vipul: He was our Honorable Director till his death. We have become vulnerable in his absence as we had always grown under his shelter.

Question: What next? We hear you are eager to script yet another success story for Amul.

Vipul: We intend coming at the national level where we can act as a cooperative federation for whole of the country.

Question: But GCMMF is not even a multi-state cooperative society?

Vipul: That is an operational issue which can be solved. What is important is the idea of moving to the national level. With clarity of objective, we propose to have brain-storming sessions on the issue. We intend upgrading GCMMF as an umbrella cooperative in the dairy industry.

Question: How do you propose to go about this?

Vipul: We intend consulting with other Cooperative Federations. We can be a big support for the dairy farmers for the whole of India. GCMMF can market their surplus and the arrangement could be mutually beneficial.

Question: And the talk of DMS take-over?

Vipul: No no, its not a take-over, we have merely offered to operate it professionally. I have met the Honourable Agriculture Minister and now the ball is in the agriculture ministry’s court. I firmly believe, business should be done by businessmen not by the government.

Question: There is news about GCMMF venturing into organic food segment.

Vipul: No, not in the immediate future.

Participating in a Punjab and Maharashtra cooperative bank event in Bombay H R Khan Deputy Governor of the RBI said the apex bank would soon implement the suggestions made by the Malegam Committee on the cooperative banks.

The committee, among other things, has recommended a dual approach of having a board of directors   appoint a board of management to run the cooperative banks and a relaxation of entry norms for the cooperative banks in the areas not yet covered by banking services, the RBI deputy added.

Mr Khan urged the cooperative banks to put in their utmost efforts to expand their business as their growth thus far leaves a lot to be desired. The share of the cooperative banks in banking business has gone down from six percent to a mere two percent, he noted.

However, the RBI deputy governor lauded the cooperative banking sector for improving its assets   quality and accomplishing mergers of weaker links with stronger ones in its chain.

Main recommendations of Malegam Report

UCBs play a useful role and there is need for a greater presence of UCBs in unbanked districts and in centers having population less than 5 lakh. It is necessary to encourage new entrants to open banks and branches in States and Districts which are unbanked or inadequately banked. It is equally necessary to discourage new entrants from opening branches in Districts and population centers which are already adequately banked.

The existing well managed co-operative credit societies meeting certain financial criteria like profits, capital adequacy, NPAs’ proportion etc. should be given priority for granting licenses as urban co-operative banks particularly in unbanked or inadequately banked centers.

Organization Structure of New UCBs

There should be segregation of the ownership of the UCB as a co-operative society from its functioning as a bank. The new organization structure shall consist of a Board of Management in addition to the Board of Directors.

The Board of Directors (BoD) would be elected in accordance with the provisions of the respective Co-operative Societies Acts and would be regulated and controlled by the RCS / CRCS.

The (BoD) will establish a Board of Management (BoM), consisting of persons with professional skills, which shall be entrusted with the responsibility for the control and direction of the affairs of the Bank assisted by a CEO who shall have the responsibility for the management of the Bank.

RBI would have unfettered powers to control and regulate the functioning of the UCB and of its BoM and of the CEO in exactly the same way as it controls and regulates the functioning of the Board of Directors and the Chief Executive in the case of a commercial bank.

It should be made a condition of the license that every new UCB should be required to have a Board of Management (BoM) to be appointed by the Board of Directors (BoD) and a Chief Executive Officer (CEO) to be appointed by the BoM. While the BoD will be responsible for laying down the broad contours of strategy, the BoM will be vested with the mandate to direct and control the day-to-day operations of the UCB within the limits set by the BoD. At least 51 per cent of the members of the BoM should have special knowledge or practical experience in the matters specified in Section 10 A(2) of the B. R. Act, 1949.

Members of the BoD can be members of the BOM provided they fulfill the conditions specified. Members of the BoM can be paid such sitting fees as the BOD may decide subject to a ceiling to be specified by RBI. The BoM to follow a Code of Corporate Governance to be specified by RBI.

The CEO shall be responsible for the management of the whole or substantially the whole of the affairs of the UCB but shall be subject to the control and direction of the BoM. The appointment of the CEO shall be subject to the prior approval of RBI.

Audit by a Chartered Accountant to be appointed by the BoM from out of a panel of approved auditors maintained by RBI and subject to rotation after four years.

Umbrella Organization

There should be two separate Umbrella Organizations viz. a national level organization which provides payments and settlement services and other services normally provided by central banks as also liquidity support to its members; and one or more organizations which provide the management, IT, training and other services which the UCB sector needs.

The national level UO should preferably be in the form of a multi-state UCB with membership being restricted to and mandatory for all UCBs other than scheduled UCBs.

Member UCBs should be required to maintain their CRR in the form of deposits with the UO.

The UO should invest its funds only in the form of balances with RBI, deposits with commercial banks or in SLR securities and in no other form.

The UO should offer Repos and Reverse Repos facilities to UCBs in the same manner as RBI offers to commercial banks and at the same rates of interest.  In turn, it should enjoy Repos and Reverse Repos facilities with RBI.

UCBs can avail of Repos facilities only to the extent of their excess SLR holdings.

Until the Payments and Settlements facilities are provided directly to UCBs, the UO will act as a gateway to provide these services for a fee to UCBs. In turn, the UO will be a member of the Payments and Settlement System.

Being a UCB, the UO would have a Board of Management and will be subject to the regulation, supervision and inspection of RBI.

Nobody has seen Amul girl ever weeping. She is hurly-burly ever eager to take on the world. But she is weeping at the news of her father’s demise- Verghese Kurien.

She has been carrying milk to us from the year 1964 and has seen all weathers. She has seen shortage of milk, its abundance. She felt sad sometimes but never wept.

She is weeping and is barely able to hold her tears. All these years she played around, confident of the fact that the father is resting up in Anand. Its true her father stopped active participation in the affairs of Amul long time back. But a patriarch is a patriarch and his mere presence fills one up with confidence.

She saw him ( Kurien) taking on the mighty vested interests in the beginning. She saw how he bulldozed his way in the deeply-entrenched bureaucracy to create a milky way. She remained with him through thick and thin.

Now she has become alone. Others come to offer solace and tell her of their presence. But in heart of her hearts she knows no one could be like her father Verghese Kuiren. Others could be follower but not the trail- blazer that his father was.

Her parting lines are no less touching. She says “Thank You For Giving us Hausla, Pragati & Anand.