Union Minister of Home Affairs and Cooperation Amit Shah on June 22 stressed the importance of modern banking methods, corporate governance, hiring professional service providers and symmetric development so that cooperative banks can thrive in this competitive age.
The minister was addressing the National Conclave of scheduled & Multi-State Urban Co-operative Banks and Credit Societies.
The Conclave that aimed at strengthening the vision of “Sahakar Se Samriddhi” (Prosperity through Co-operatives) saw the Union Minister talking on the “Future Role of Urban Cooperative Credit Sector.”
The Union Minister said, “ I am sure it is very easy for India to achieve a 5 trillion economy. But the real question is if we can take everyone along when we reach there. The challenge is if the development is inclusive.” To bring about such an inclusive development, he said a cooperative spirit and role played by cooperatives have no alternatives.
The minister urged all to take inspiration from Amul, Lijjat Papad, other cooperatives and decades old cooperative banks.
“At present there are 1,534 urban co-operative banks and 54 scheduled urban co-operative banks… but the development or expansion is not symmetric,” Union Minister said.
Reminding that the cooperative banks only share a meager share of the credit lending in the country, the minister said, “It’s important that we do symmetric expansion of cooperatives, that’s how we can sustain ourselves amid competition. ”
Numerous urban cooperative banks that have served society for 100 years attended the conclave and received felicitations. Such long tenure of service have created deep roots in the country for these oldest banking institutions. To many who doubt the relevance of these banks, the minister said that the existence of these banks after a century itself is proof of their relevance.
The Union Minister shared that he personally knows 5 big industrialists in India, who started their entrepreneurial journey from a loan of few lakhs by urban cooperative banks.
The business sessions of the conclave include discussions on various issues related to Scheduled & Multi-State Urban Co-operative Banks and Credit Societies and the Cooperative Credit Sector. Among the topics are the future role of Urban Cooperative Banks and recommendations of the Reserve Bank of India’s (RBI’s) Expert Committee, NCFDC as a game changer as an umbrella organization for the Urban Cooperative sector, the Banking Regulation (Amendment) Act, 2020 and its impact and developments. Other topics are the role of credit societies in the financial sector scenario with special reference to Multi-state societies and the issue of regulation and taxation of cooperative credit societies.
Efforts to support cooperatives
Government created the new Ministry of Cooperation to provide a separate administrative, legal and policy framework for encouraging cooperative based economic model in the country.
To make cooperatives more transparent and efficient, the government created a National database of Cooperatives, digitalised about 63,000 active Primary Agriculture Credit Societies (PACS) and made a scheme for Cooperative Education & Training.
As part of drafting a new National Cooperation Policy, the Government has begun consultations with various stakeholders, including various Ministries and Departments of the Government of India, State Governments, Cooperative Federations, NABARD, and other major cooperative institutions of the country.