The Hindu Business Line : AP co-operative bank convention in March

THE Andhra Pradesh Urban and Town Co-operative Banks' Association will hold a State-level convention on March 9 at Vijayawada to discuss their problems and chalk out strategies, Mr M. Anjaneyulu, President of the association, has said.

At a press meet here on Sunday, he said representatives of the RBI, State officials and delegates from all co-operative banks have been invited to the meet. The State Government was planning to pass an act making it mandatory for healthy co-operative banks to part with a percentage of their profits, he said and added that it was very arbitrary.

Mr Anjaneyulu said that in the wake of the failure of a few co-operative banks in the State such as the Krushi Bank and Charminar Bank, the Government had floated a federation of co-operative banks with mostly the weak banks and pushing through such an arbitrary piece of legislation without taking into account the majority of healthy co-operative banks represented by his association.

The dual control regime — by the State Government and the RBI — on the co-operative banks should be dispensed with and the RBI should assume sole responsibility, he said.

Of the 140 urban co-operative banks in the State, 108 were making profits and the rest too would recover, with the RBI making it clear recently that co-operative banks too could invoke the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Mr Anjaneyulu said that roughly non-performing assets of the urban co-operative banks in the State could be pegged at Rs 800 crore. As much as Rs 600 crore could be recovered with the application of the Act, he said. The co-operative banks were functioning in the past under great political pressures and the NPAs had risen sharply as a result. He hailed the Securitisation Act as a revolutionary move.

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