Cooperators slam Jaitley for his IT stand

Cooperators connected with cooperative banks and urban cooperative banks have reacted with a shock and dismay at Arun Jaitley statement in the Lok Sabha last week that govt does not entertain the idea of granting Income Tax exemption to profit-making cooperative banks.

We have tried to accommodate the reactions of cooperators as many as possible. More are pouring in and we promise to feature them tomorrow. Here is verbatim reproduction of the same.

Laxmi Das, Chairman, Delhi Urban Cooperative Bank Federation and Kangra Cooperative Bank

We find the decision of the central government a little incomprehensible as cooperative banks are working for the welfare of the poor people. Whatever income they generate is either reinvested into further developing themselves or helping members. As cooperative banks are not private companies just interested in maximizing their profits, tax exemptions will be consistent with their missions.

William L D’Souza, Model Cooperative Bank, CEO and General Manager

The government should think about us and give us some additional benefits because the cooperative banking sector is the only sector which exists in rural areas catering to the needs of the multitude. Because of income tax reducing our profitability, we can’t adopt the latest technology.

Anand Gokul Bakshi, Prime Cooperative Bank, Surat, Gujarat

The office bearers of any co-op banks or societies may be offering their services gratis but institutions are doing business. As law abiding citizens, we should honor the decision of the government and pay taxes.

We can request rationalization of the tax rate, maybe what is applicable to companies having a turnover of less than 50 Cr. i.e. 25% tax slab. There are vital issues like covering co-op banks under securitization or SARFESIA which should be represented & followed up.

A K Shah, Managing Director, Fingrowth Cooperative Bank, Rajasthan

Reacting to Union Finance Minister Arun Jaitley’s statement in Lok Sabha Shah said “If the government is not giving any IT exemption to cooperative banks then we may request a flat reduction of 10%” in income tax ” he said.

K. Ravinder Rao, Chairman, Telangana State Cooperative Apex Bank Ltd (TSCAB)

Union Finance Minister Arun jaitley should have yielded to the members of parliament who supported cooperative banks. Not only that, Nafscab’s board has called upon him to exempt cooperative banks from paying income tax as these banks are doing yeoman service for the poor in the countryside. Vinod kumar MP from Karimnagar was one of those who participated in the parliamentary debate and argued in favor of the cooperative sector. .

The government has lakhs of crores to bail out non performing big commercial banks but when it comes to coop banks they assume the attitude of a step mother.. Whatever coop banks earn is ploughed back into the system.

CH. Raghavendra Rao, Chairman, Visakhapatnam Cooperative Bank

Earlier during the election campaign Bharatiya Janata Party (BJP) had promised in its manifesto that it will exempt cooperative banks from income tax and spare no efforts to strengthen them but it is time now it put the money where its mouth is.

The government has imposed 27.4 percent income tax on Corporates whereas the cooperative banking sector is paying 33.9 percent taxes on their income.

We will ask the apex body of Urban Cooperative Banks NAFCUB to raise the issue before the Government.

G.Rama Moorthy, Andhra Pradesh State Cooperative Urban Banks Federation

The decision of the Union Finance Minister to reject the cooperative sector’s demand for income tax exemption is unfortunate. We appeal to the honorable minister to re-consider the issue and help cooperative banks increase their net worth. On behalf of the federation, we will raise the issue before the government again.

Alka Shrivastava, NAFCUB Director and Chairman Laxmibai Mahila Nagarik Sahakari Bank

We had discussed with many including with then President of India Pratibha Patil the issue of giving Income Tax exemption to Urban Cooperative Banks but the statement of Union Finance Minister Arun Jaitley has shown that all our efforts had gone in vain.

On the one hand the government wants to empower women in society and on the other the govt. denies us the resources to work for women’s welfare. We appeal to the Union Finance Minister to help cooperative banks overcome their existential crisis.

Mukesh Chandra Gajjar, Chairman, Surat People’s Cooperative Bank

Union Finance Minister Arun Jaitley had said that we will not give income tax exemption to profit making cooperative banks saying they functioned like commercial banks and should therefore be treated on a par with them.

We demand that the services and facilities given to commercial banks and nationalized Banks should be given to cooperative banks as well. In that case, we will stop demanding IT exemption.

Commercial banks can collect capital from market but cooperative banks can’t. The apex bank of India is monitoring the activities of commercial banks but cooperative banks are not only monitored by RBI but also by State Registrars. Why this?