The Hindu Business Line : Review norms governing co-op credit bodies: PM

THE Prime Minister, Dr Manmohan Singh, today suggested a relook at the regulatory structure under which co-operative credit institutions function to end the "regulatory impasse" that the sector is now facing.

"The current regulatory impasse under which even the Reserve Bank of India can enforce regulatory compliance only through the mechanism of the Registrar of Cooperative Societies, its relevance, its viability, needs to be examined. Is the institution of the Registrar of Cooperatives an adequate mechanism for better governance and regulation of co-operatives? Are there any alternatives? If so, what are their merits?" Dr Singh asked, while addressing an interactive session with State Chief Ministers to discuss the report of the Vaidyanathan Task Force on revamping the co-operative credit institutions.

The Vaidyanathan panel, too, had suggested that the regulatory regime for the sector should be given a fresh look. It had proposed a financial assistance package of about Rs 15,000 crore for revamping the co-operative credit system.

The panel had proposed that Centre should share the burden to the extent of 53 per cent and the States should provide about 31 per cent of the required funds. The balance would come from the co-operative credit institutions.

Dr Singh said that State governments that are not in a position to provide funds towards their share of the revival package could be allowed to resort to market borrowings for this purpose.

"It appears that financial restructuring will have to be from a mix of resources from the Central Government, States and co-operative credit institutions. Where State governments are not in a position to provide funds towards their share of the package, they may be allowed to raise resources through market borrowings or similar sources," Dr Singh said.

The Prime Minister said urged the State governments to avoid the temptation to supersede the co-operative credit institutions management boards and ensure timely elections before the expiry of the terms of the existing management systems.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Maran cautions TN Govt on infrastructure

Bangalore losing out on IT investments, says Chamber
STPI refutes: `More firms set up shop'

Oilseed price fall keeps inflation under check

Ad hoc approach to full-blown fuel crisis

Tata Steel to go in for Rs 1 lakh-crore capacity expansion

Maruti to roll out diesel cars by end-2006

SAT sets aside SEBI order in UBS Sec case — `No violation of FII regulations'

RBI to approve opening, closing of bank branches, ATMs on annual basis

SEBI urges Ministry to tighten disclosure norms for oil finds

Raw sugar imports may continue next season — 15 lakh tonnes likely to bridge demand-supply mismatch

Review norms governing co-op credit bodies: PM