Addressing a meeting at a cooperative bank and a dairy managed exclusively by women in a village in Karimnagar district, Andhra Pradesh Governor Narasimhan underscored the importance of the expansion of the cooperative sector in the state.

The Governor said that cooperative sector has potential to create job opportunities and help fight absolute poverty.

The governor’s emphatic call for giving particular importance to the cooperative sector would influence the state govt’s attitude and policies towards the sector, a senior source at an important local cooperative body was quoted as saying.

A number of ministers and officials had accompanied the governor on the tour.

In Andhra Pradesh the cooperative banks and societies would soon be exempt from value added tax, said Andhra cooperative minister while addressing a cooperative society function in Kakinada.

According to the minister, his ministry has sent the relevant proposal to the state cabinet and the central government.

The issue has long been in discussions in the state.

Sources say if the cooperative organizations are exempt from VAT it will give a fillip to the cooperative movement in the state.

Andhra Pradesh Cooperative Bank would soon emerge as a major source of credit and other facilities to several millions of farmers in the state.

The bank with its wide network of district cooperative central banks and primary agricultural cooperative credit societies would work together with IFC the World Bank’s financial arm to help the local farmers.

In a statement issued recently the bank said it would receive support from the IFC especially in the field of staff training and product designing. The IFC would also   help the bank deliver financial products to the female entrepreneurs, the statement added.

Y V Reddy President of the bank claims the A.P state cooperative bank would play a significant role in the agricultural development of the state with its expanding product and client base.

Working together with the IFC would also enable us to have a better portfolio quality and risk management, he remarked.

President said the bank would develop all kinds of financial products and try to meet the agri-finance needs of farmers. The bank would build its capacity to help the farmers having no access to credit and financial services, he noted.

Addressing members of PACS and cooperative banks, Andhra Pradesh cooperative minister said he was pursuing the matter of abolishing VAT on the cooperative societies in the state with the Chief Minister and was hopeful of a positive outcome.

The cooperative minister added he would also soon be discussing with the central govt. The issue of exempting the cooperatives from income tax is something cooperative sector has been demanding for a long time.

According to the minister, the cooperatives would soon have elections and experience democracy.

Sources say there are nearly a hundred PACS in Andhra Pradesh but about half of them are not doing well.

Police say  branch manager and cashier  of Krishna District Cooperative central bank  in Andhra Pradesh  have been taken into custody  as  they had  swindled  2.5 crore  out of the customers’ deposit.

Police have recovered about Rs 62 lakh from the accused bank officials and begun investigating the matter.

Sources say, the incident immediately got politicized and the depositors of the bank began blocking traffic on the roads.

They were demanding an exemplary punishment for the guilty.

The Andhra Pradesh State Cooperative Bank has embarked on an expansion program. It has moved into new areas to develop its business further.

The bank has established its three branches. The president of the bank opened these branches in an official ceremony.

The bank has netted over hundred crore as profits in 2011-12. Its annual turnover surpassed 10 thousand crore and deposits worked out to more than 3 thousand crore.

A flyer distributed by the bank claims the bank has extended crop loans worth 7 thousand crore and investment credit to the tune of Rs. 5 hundred crore.

According to the A.P. Tribal Welfare Minister, Girijan Cooperative  Corp (GCC), that forms a part of his ministry will construct 240 multipurpose depots to enable  the tribal people to collect  their daily ration.

GCC will design and build some cost effective buildings as a pilot project with a goal of giving more access to tribal to buy their daily ration and market their forest produce.

The buildings would be constructed with the funds from MPLAD of Union Minister Jai Ram Ramesh, who has promised to release money for the project, the Tribal Welfare Minister added.

The Andhra Pradesh government enacted six legislations in all, including one related to cooperatives.

Andhra Pradesh Co-operative Societies (Amendment) Bill 2011 was  passed in the Assembly through a voice vote.

Main Opposition TDP staged a walkout in protest against extending the term of an existing Managing Committee of a cooperative credit society from one year to a period not exceeding two years in the Andhra Pradesh Co-operative Societies (Amendment) Bill.

Members cutting across party lines demanded that elections to co-operative societies be held without any further delay.

The government, however, remained non-committal on this.

The A.P. Mahesh Co-operative Urban Bank is leading Urban Cooperative bank of Andhra Pradesh with a presence in the far-flung areas of the state. It caught media attention on the eve of launch of its own ATM Card recently.

The year 2012 being the international year of cooperative as declared by United Nations, Indian Cooperative decided to celebrate the success of cooperative institutions by interviewing the Chairman of Mahesh Bank, the dynamic Mr Ramesh Bung. This is our time as the ICA contributor said once, signalling the onset of IYC 2012.

Institutions are built around individuals and Mr Bung’s contribution in making Mahesh Bank where it stands today could hardly be overstated.

Excerpts

Q  What is the scope of the ATM Card launched by Mahesh Bank?

Ramesh Bung:  The customers can access their accounts and withdraw cash any time anywhere in India through 88,000+ ATMs of various banks under NFS.

Q How many branches are likely to be opened in the Year of International Co-operative Year and would there be an increase in the dividend for members?

RB We are opening three more branches in twin cities of Hyderabad & Secunderabad taking out branch network to 39 by March’12. We are also proposing to open 4 more branches in 2012-13 at Surat (Gujarat),  Bhilwara (Rajasthan), Nagole (Hyderabad) and Medchal (Suburbs of Hyderabad).

The issue of dividend would entirely depend upon the profit earned for the year, allocations to be made to various funds & reserves and the recommendation of the Board.

Q RBI requires that UCBS are registered with RBI instead of State Govts. What is the take of the Mahesh Bank on this?

RB: This would be an advantage as RBI can take immediate and necessary measures whenever and wherever required, as is being done in case of Commercial banks.

Q Why is it that Co-operative Banks are constantly being punished by RBI across India? Has your bank ever been punished?

RB: Only the erring banks are being punished. Again the bank could be erring due to incorrect interpretation of the RBI guidelines. NO, our bank has never been punished by RBI.

Q  Malegam Report on Licencing of UCBs is recommending for separate Committees viz. Board of Directors & Board of Management. Will this complicate the operations of the Bank?

RB: Establishing two power centres is likely to result in co-ordination problem resulting in delay in decision making which in turn would affect capitalizing the opportunities for the development of the bank.

Since the present set up of BoD and MD&CEO supported by staff is working satisfactorily in co-operative Banking sector, the status quo may be continued.

Q  Do you support Direct Tax Code?

RB: Unless the bill is finalised, we really cannot comment on the same.

Q Do you favour reducing income tax on co-operative banks and societies to the pre 2006 level as demanded by many?

RB:  Yes. Because co-operatives are formed to help the members of the society and not with a profit motive as is the case of commercial banks/ establishments.

Hence, they should not be subject to Income Tax provisions. However, in case that cannot be considered, IT at concessional rates should be considered.

Q  Does Mahesh Bank has any plan to apply for All India License on the lines of Saraswat Bank

RB:  Once we establish ourselves in the States of Rajasthan, Gujarat & Maharashtra, we have definite plans to expand the area of operations to other states and eventually to entire country.

Q How is Mahesh bank celebrating or contributing to International Year of Co-operatives?

RB:  We are conducting the programs throughout the year as suggested by the Department of Co-operation, Govt. of A.P.  We have road shows, training programs and many such things in the pipeline. A separate team has been formed to plan and execute IYC celebrations.

“The Andhra Pradesh government has resolved to promote the cooperative movement”, Cooperatives Minister Kasu Krishna Reddy said while talking to reporters after a workshop that debated ways and means of reorganising the cooperative sector. The State is planning to start cooperative bodies in food retail, travel, health and insurance.

The govt will boost the present cooperative organizations through Business Development Plans and introducing cooperative societies in the areas and fields that are not yet covered, he said. The minister also broached the concept of social audit to ensure effective services and responsibility in the cooperative sector.

The govt is also planning to introduce cooperative societies in the transportation sector. There will soon be autorickshaw and taxi drivers’ cooperatives in the state.

The govt has decided to bring renewable energy and event management into the cooperative sector and there are moves underway to help the farmers through the cooperative societies and cooperative banks.

Andhra Pradesh is also planning to hold a national meet on the cooperative movement and senior leaders like Sharad Pawar and distinguished experts will be invited for wide ranging discussions on the challenges facing the cooperative sector in the State.