Randhawa urges Thakur to Liaison with RBI for speed up of merger case already sent to Reserve Bank

Chandigarh, November 28, 2019 (Yes Punjab News)

The Cooperation Minister, Punjab, S. Sukhjinder Singh Randhawa today met Union Minister of state for Finance Mr. Anurag Thakur and demanded for early merger of District Central Co-Operative Banks into Punjab State Co-Operative Bank with single focus for restructuring of Co-operative Banking apparatus in the state.

During the meeting held at North Block in the National Capital, Punjab Cabinet Minister apprised Mr. Thakur that the case for merger of DCCBs into PSCB has already with the Reserve Bank of India and the Union Finance Ministry should liaison with the RBI to speed up the process of merger of these banks.

In a press release an official spokesperson revealed that Punjab Co-Operation Minister told Mr. Thakur that to take the welfare steps for the farming community in Punjab there was dire need to restructuring the Co-Operative Banking system for providing Co-Operative loans to the farmers and the Union Finance Ministry must take up this issue with RBI on priority basis for early merger of these banks.

The much needed merger of DCCBs into PSCCB would help in many ways to provide services on much better scale that would add to the prospectus for welfare of state farming community’’, added S. Randhawa.

Punjab Cabinet Minister also raised the issue with Union State Finance Minister to provide exemption in income tax to the Co-Operative Banks and Societies in line with that of Commercial banks as the Co-operative banks directly influence the financial aspects of small and marginal farmers` economy thus these banks deserve this financial relief on priority basis.

Demanding income tax relaxation for Co-operative banks in tandem with Financial Institutions and banks, S. Randhwa said that as under this financial relaxation the income tax has been slashed down from 30 percent to 22 percent for Commercial Institutions and banks, this relief must be reached to the cooperative banks. Punjab Minister revealed that Mr. Thakur received this suggestion with positive gesture.

Raising another important issue, the Cooperation Minister said that the Union Government gives 2 percent relaxation in terms of interest through NABARD on the loan which is advanced by the cooperative banks to the farmers from its own resources, but this relaxation is absent on the loans provided to the farmers by the cooperative banks through NABARD.

Before the year 2006-07, NABARD provided loans to the cooperative banks at 5.5 percent rate of interest while the banks gave loans to the farmers at 10 percent rate of interest. Now, NABARD gives loans at 4.5 percent interest rate while the banks charge from the farmers 7 percent interest rate.

So, the probability for the banks which in 2006-07 was 4.5 percent now stands at 2.5 percent. Similarly, the cooperative banks’ probability has lessened by 2 percent. If the Union Government gives relief at 2 percent rate on the amount the cooperative sector banks get from the NABARD, then the financial loss to the banks would be mitigated to a great extent.

MLA Mr. Pargat Singh, Additional Chief Secretary Cooperation Mrs. Kalpana Mittal Baruah, Registrar Cooperative Socities Mr. Vikas Garg, and MD Punjab State Cooperative Bank Dr. S.K Batish were also present in the meeting.