Draft Final Report of the Task Force on Revival of Cooperative Credit Institutions
Shri. Y. S. P. Thorat, Managing Director, NABARD
Shri A. V. Sardesai, Executive Director, RBI, Mumbai.
Shri K. D. Zacharias, Legal Advisor, RBI, Mumbai.
The Terms of reference of the Task Force
- To recommend an implementable action plan for reviving the Rural Cooperative Banking Institutions, taking into consideration, inter alia, main recommendations made by various committees in this regard.
- To suggest an appropriate regulatory framework and the amendments which may be necessary for the purpose in the relevant laws.
- To make an assessment of the financial assistance that the Cooperative Banking Institutions will require for revival, the mode of such assistance, its sharing pattern and phasing.
- To suggest any other measures required for improving the efficiency and viability of Rural Cooperative Credit Institutions.
1.03 The Task Force was required to submit its report by 31 October 2004. However, on account of some delay in getting the names of the State Government nominees, the Task Force could hold its first meeting only on September 06, 2004. The deadline of 31st October, 2004 for completion of its work being clearly unrealistic, the Task Force sought and obtained concurrence of the Government of India to extend the deadline up to the end of December 2004.
1.04 The Task Force held eight meetings between September and December 2004 at Mumbai, Chennai, Kolkata, New Delhi, Bhopal, Kolhapur and Hyderabad. (The dates and venues of the meetings are given in Annexure II.
1.05 At its very first meeting, the Task Force considered the submissions of representatives of the long term credit institutions, that restructuring these institutions should also be considered. The Task Force appreciated the validity of their concerns. It recognises that the revival of the long term cooperative credit structure is no less important than that of its short term counterpart. The nature, magnitude and complexity of the issues relating to such institutions are, however, quite different from those of institutions of the short-term structure.
1.06 Moreover, since the time available to the Task Force was limited, it was unanimously decided to focus first on designing an action plan for the short-term structure, covering all tiers (including the primary agricultural credit societies) in the first phase and, if time permits, to take up the issues pertaining to the long term structure. As things turned out, however, this has not been possible. The Task Force, therefore, recommends that the Union Government consider setting up a Committee to examine the issues pertaining to the long term cooperative credit structure on the lines of the terms of reference assigned to it.
1.07 At its first meeting, the Task Force considered various issues pertaining to its approach and methodology. The Task Force noted that the current status of cooperative credit institutions, their weaknesses and underlying reasons, as well as measures to remedy them, have been widely discussed and analysed both in literature and more specifically in the reports of the previous committees. The reports of the recent committees listed below, were considered in particular.