RBI TO INSTRUCT COMMERCIAL BANKS TO RESCHEDULE LOANS TO DROUGHT-HIT
PEOPLE
CENTRE
OFFERS RS. 8000 CRORE PACKAGE TO STATES FOR RESTRUCTURING OF COOPERATIVE
CREDIT BUT SYAS REOFRM COOPS TO GET IT
Union Agriculture Minister Shri Ajit
Singh today said that Reserve Bank of India has been asked to
issue instructions to all Commercial Banks to reschedule their
loans to the affected persons in the drought affected areas in
the country. While addressing the State Cooperation Ministers
meeting on "Reforms in Cooperative Sector" here, Shri
Ajit Singh said that under the guidelines of Reserve Bank of India,
Commercial Banks will convert/reschedule loans by converting the
amount of principal and interest of short term loans due this
year to term loans of three to five years. Commercial Banks would
also defer recovery of the converted loans. Similarly installment
of principal and interest in respect of short-term loans would
also be rescheduled for a period of three years which could be
extended for a longer period. Banks would also provide fresh loans
to farmers depending on the crop loss and there would be no penal
interest on individual agricultural loans upto Rs. 25,000 borrowed
by farmers during the period of drought. Banks would also not
compound interest on the dues converted/rescheduled.
The Minister said that National Bank
of Agriculture and Rural Development (NABARD) has advised State
Cooperative Banks and Regional Rural Banks to provide relief measures
in the drought affected areas including additional loans and enhanced
loans to farmers to offset the loss of expenditure incurred by
the farmers, loan for purchase of fodder, investment credit for
deepening of wells, installation of tube/bore wells. Besides,
Shri Singh said, for insurance coverage to the farmers of the
drought affected States, General Insurance Corporation (GIC) has
been asked to extend the date by 15 days for acceptance of insurance
proposals from the non-loanee farmers who have gone for late sowing
due to delayed rainfall so that they can avail the benefits of
crop insurance. Describing the drought situation in the country
as widespread, Shri Ajit Singh said that adequate measures would
be taken to provide succour to the drought affected people.
Stating that Cooperative needs to
be made a peoples’ movement, the Minister said that the Central
Government has recently got the Multi-State Cooperative Laws passed
in Parliament which would democratize cooperative institutions,
provide them with functional autonomy and free them from Government
control. Appreciating the States which has passed similar laws
in their States, the Minister called upon all other States to
pass laws to free the Cooperatives from the Govt. shackles. He
mentioned that the National Cooperative Development Corporation
(NCDC) Bill has been passed in this session of Parliament which
will facilitate direct lending by NCDC to the cooperatives without
State Governments standing guarantor.
Shri Ajit Singh said that his Ministry
has finalized a Financial Package of about Rs. 8,000 crore for
restructuring of the Cooperative Credit Structure in the country.
He said, under the package, cooperatives would be allowed to float
ten-year Bonds in the market and the Central and State Governments
would pay interest on these bonds @ 10% which can be utilized
by the Cooperatives to cleanse their balance sheets . However,
the Minister cautioned that this benefit would only be available
to those States which pass laws similar to Multi-State Cooperative
Laws and initiate reforms in the shape of allowing regular election,
professional audit and independence to Cooperatives to hire their
own cadre.
During the meeting the States agreed
to implement the legal and credit sector reforms as finalized
by the Task Force constituted for implementation of the National
Policy on Cooperatives.
Besides, they agreed to carry out
the following reforms: -
i) Registration procedure to
be simplified. Deemed registration if the society is not registered
within three months.
ii) The Regional Cooperative
Societies (RCS) to have no power to compulsorily amend the byelaws
of a society.
iii) Elections to be conducted
by the societies themselves.
iv) No supersessions of the
Boards by the Government/RCS unless the Government has got more
than 51% share holding in that society.
v) The societies would be enabled
to function as autonomous self-reliant member driven and democratically
managed institutions.
vi) The societies would appoint
their own Chief Executives.
vii) The cadre of the Secretaries
of the Primary Agricultural Cooperative Societies (PACS) would
be abolished.
viii) The societies would have
freedom to float subsidiaries and holding companies and enter
into joint ventures.
ix) The societies would be free
to take their financial decisions, raise resources and investment
of their funds.
x) The societies would conduct
audit on their own through Chartered Accountants.
xi) In order to provide credit
at a cheaper rate, the PACs will be converted into mini banks.
