The cooperative banks in Haryana are in a bad way largely due to low interest loan to farmers and a huge-scale defaulting on their loans. The banks are not only facing a serious shortage of capital but cancellation of their banking licence.
It is against this background that Haryana chief minister Bhupinder Singh Hooda has called upon Nabard to reduce rate of interest on refinance helping the beleaguered banks overcome their financial crisis.
At a time when cooperative banks and rural banks in the countryside are desperately struggling to stay afloat it is regrettable that Nabard is intending to make profits said Mr Bhupinder Singh Hooda while addressing Nabard’s 32nd Foundation day ceremony in Panchkula near Chandigarh. Nabard should, instead, take steps to shore up the ailing banks, the chief minister said.
NABARD is an organisation that gives short term refinance at concessional rate of interest to state cooperative banks (SCBs) and Regional Rural Banks (RRBs) by way of sanction of credit limits.
Nabard had introduced a new refinance scheme for financing of primary agriculture cooperatives societies through psbs & rrbs, when cooperative banks are in difficulty or not able to lend to PACS.
A Nabard source says cheap refinance cannot be made available to cooperative banks and rural banks as the state govt is refusing to play ball with Nabard.