What was inevitable has happened. States after states have refused to toe the line of NABARD on converting Primary Credit Banks into business agent and losing their deposits with the district cooperative banks.
First it was Gujarat and now it is Kerala. Indian Cooperative has learnt that many other states are on way to rebelling against this draconian diktat.
G H Amin slammed the move of NABARD in Cooperative Congress the other day in Ahmadabad and now Kerala has unequivocally rejected the Nabard’s fiat and asked the PCBs not to comply with it.
The Kerala registrar of cooperatives has issued a strongly worded statement on the issue.
Primary cooperative credit societies in Kerala had been in limbo since the Nabard issuing the circular. The PCBs in the state have been greatly successful in deposit mobilization and extension of credit.
Kerala had been so much exercised by the issue that the state cooperation minister already in February had dashed off a letter to the central government detailing objections to the Nabard’s recommendations.
Kerala’s finance minister has also urged Nabard to take the circular back and stop threatening the existence of a big network of primary cooperative banks across the state.
PCBs are doing very well and are a big deal on the financial scene in the state. The 1,603 primary cooperative banks PCBs) that at present function as the fulcrum of the cooperative movement in the State with a deposit base of around Rs.60,000 crore will soon be stripped of the authority to conduct banking operations.
Indian Cooperative has also gathered that being election year the UPA govt is counting on the miracle of subsidies to sail across.
Nabard move is aimed at identifying farmers with district cooperative banks where it would be easy to pass on the subsidies. Alas, they fail to understand that they would be destroying an institution like PSB which has stood in good stead to farmers over a long period of time.