Banking Development and Agricultural Credit initiated meetings with stategovernments and cooperators to formulate agreed programmes of cooperativereorganization. The programme for each state varied, inevitably, with localcircumstances. In Saurashtra and Rajasthan, for example, apex banks were tobe established with substantial state subscription to share capital. The stategovernments in both cases assisted their new apex banks by offering them amanagerial subsidy in the initial years. In addition, the apex bank in Saurashtrawas exempted from audit fees, while the Rajasthan government agreed toguarantee the state apex bank's borrowings from the Reserve Bank. In MadhyaBharat, an apex bank was formed by amalgamating three existing centralcooperative banks. In Travancore-Cochin, cooperatives were well developedin the former Cochin state, but poorly developed in the Travancore area. Withstate government assistance, an apex bank was formed by amalgamating theCochin and Travancore banks. Since cooperative institutions did not exist atthe district level, particularly in the Travancore area, the reconstituted apexbank was allowed to open branches at district towns. In Himachal Pradesh alocal commercial bank-the Bank of Sirmur-was converted into an apexbank; likewise in Bhopal where the Bank of Bhopal was already partly underState ownership. In West Bengal it was proposed to strengthen the existingbank, with the state government lending Rs
lakhs to its share capital andacquiring representation on the board. The Bank also agreed to improve theapex bank's liquidity by sanctioning loans aggregating Rs
lakhs againstsecurities and guarantees of the state government.
thanks to thecombined efforts of the Bank and state governments, apex banks wereestablished in all eighteen Part A and Part B states and in seven of the tenPart
states. At the time of the informal conference only three years earlier,apex banks had existed in eleven Parts A and
states and two Part C states.The birth pangs of apex cooperative banks were prolonged, however, bythe reorganization of states in
Apart from the Bank's own interest inthe functioning of apex banks, state governments also sought its help inresolving problems arising from the redrawing of their jurisdictional boundaries.Briefly, three sorts of situations were expected to arise. The principal problemwas that some apex banks, such as the Hyderabad, Madhya Pradesh, andBombay State Cooperative Banks, would have their head offices in one state,while their members and borrowers were likely to be scattered across severalothers. These state cooperative banks would, almost overnight, become 'multi-unit societies' with activities spread across more than one state. But the'multi-unit model' was not envisaged to apply to credit societies, whoseoperations generally required greater coordination and supervision. Thesecould become more difficult and cumbersome in the new situation. The other