Sahakar Bharati delegation led by its Patron Satish Marathe has demanded that Credit Co Ops and Primary Agricultural Co Ops (PACs) which are fully computerized and which are financially sound be given membership of National Payment Corporation of India (NPCI). Suitable norms be prescribed by NPCI for giving membership to Credit Co Ops and PACs, Marthe said.
The Sahakar Bharati team red-flagged several of the bottlenecks that hamper the growth of the co-operative banking system compared to its commercial counterparts in a meeting with the Union Finance Minister on the occasion of pre-budget consultations.
On govt continual refusal on the issue of IT exemption, Sahakar Bharati lowered its demands this time and wanted exemption at least for all Non-Scheduled UCBs if not for all UCBs.
The meeting lasted more than 2 hours at Jaitley’s residence on Saturday in which besides Sahakar Bharati, representatives of Bharatiya Majdoor Sangh, Kisan Sangh and those from the SMEs sector took part. Shakar Bharati President Jyotindra Mehta could not participate as Gujarat Chief Minister was coming to his place on the occasion of Makar Sankranti, said Marathe.
Some of the demands made by Marathe included provision of deduction allowed on income earned on 10% of advances of rural branches of all Banks be made available to eligible Urban Co Op Banks (UCBs) which lend to Agriculture and allied activities.
Another important demand was provision under Section 43D should be made applicable to all Non-Scheduled UCBs. Presently, the facility of this Section is made available to all Scheduled UCBs and all Financial Institutions but not to Non-Scheduled UCBs.
He also demanded that Section 80(c)(xxi) of the Income Tax Act 1961 and Section 80(p)(ll)(a)(l) be amended so that the financially Sound well Managed UCBs enjoy the benefits just like Scheduled UCBs Banks.
The memorandum also demanded that all UCBs should be eligible to receive benefits of Interest Subvention and pass on the same to their Borrowers/Shareholders in case of all GOI Schemes (eg Housing, Agri, MSME, Educational Loans, etc) of Interest Subvention on such Advances sanctioned by UCBs.
It also called for exemption on Income Tax on Dividend paid by Co Ops to its Shareholders.
Under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, UCBs registered under the State Co Operative Acts are not recognised as Banking Organisation, even as the UCBs registered under Multi State Co Operative Act are recognised as Banking Organisations. This anomaly needs to be corrected to facilitate quick recovery from defaulters, Sahakar Bharati demanded.
All Banks, including PSUs, Private Sector, Foreign and RRBs are recognised as Eligible Lending Institutions under the Credit Guarantee Fund Scheme and they get cover under the Guarantee Scheme for credit facilities extended without Collateral Security. Unfortunately, UCBs have not been covered under the above Scheme. Hence, all UCBs be recognized as Eligible Lending Institutions under the above Scheme, it argued.
Sahakar Bharati also demanded that concession for fisheries cooperatives, dairy farmers and wanted their loans to be treated as agriculture finance. It also batted for senior citizens and wanted their deposits’ interest exempted from TDS.