Professional Documents
Culture Documents
Challenges Before Co-Operative Banks
Challenges Before Co-Operative Banks
Mounting NPAs. Accumulated losses. Non compliance with section 11 of BR Act. Erosion of deposits.lar Dwindling market share.
No regular recruitments- ageing staff. Inadequate qualification as compared to their peers. Lack of capacity building of staff.
HUMAN RESOURCES
Non conduct of elections for long time. Delay in audit. Intrusion of the state in to the financial and managerial matters of STCCS.
Deputation of govt. officials in managerial position. Common cadre No relation between staffing pattern and business. Interference in operational decision making. Poor housekeeping. Weak MIS.
MANAGERIAL IMPAIRMENTS
REVIVAL PACKAGE:APPROACH
Financial
assistance-one time measure only. Conditional- legal and institutional reforms. States had an option to participateMoU. States given 2 years to take a decision.
voting rights to all users incl. depositors. Ensure periodic election and audit, introduce criteria for eligibility to contest, and limit powers to supersede Boards. Remove administrative interventions of State Govt. in the financial affairs of the cooperatives. Withdraw any other restrictive orders. Prohibit Govt. share capital in CCS.
Prohibit Govt. participation in boards. Define and distinguish roles of Boards and Executive clearly. Permit wider access for borrowing and investment. Delimit geographical restriction and permit wider choice for affiliation to upper tiers. Cede full financial regulatory powers to RBI for cooperative banks.
PACS
Accumulated losses due to all credit business to be fully covered by GoI grant. Losses due to non-credit business like PDS, trading etc. to be fully met by state govt State govt. may avail soft loan form GoI if needed Balance accumulated losses due to credit business (to PACS+ other member societies)to be shared by state govt. and GoI (sharing pattern indicated in the report) Losses due DCCBs to be borne by DCCB itself DCCB may avail soft loan form GoI if needed.
DCCBs
MEETING THE ACCUMULATED LOSSES (Cont.) The central Government will bear 100% of the losses arising out of direct credit business of PACS. 100% losses out of the agricultural credit business of DCCBs and SCBs and a potion of their losses out of non agricultural credit business, 50% of the losses due to PDS and 8input distribution undertaken in pursuance of national policy, The requirement of resources to raise CRAR to 7%, Full cost of technical assistance for human resources development, computerisation and improving accounting system.
IMPLEMENTATION MECHANISM
At national level A national steering Committee reporting to the finance Minister every quarter. With representatives of GoI (MoF- FS), GoI (MoA),NABARD,RBI , two representative of state govts. Which are under review, two eminent co operators
At state level A state level Implementation and Monitoring Committee (SLIC) comprising Secretary Finance (chairman), Secretary (Cooperation), RCS,MD (SCB),ED NABARD , and a CA as members
At District level (for PACS & DCCBs) A district level implementation committee (DLIC) comprising representatives of NABARD (chairman), and RCS,DCCB and a CA as member
LIMITATIONS TO GROWTH
Lack Lack
expense
Lack
all levels
LIMITATIONS TO GROWTH
Globalization Lack
of innovation
Technology
CO-OPERATIVE BANKS
SWOT ANALYSIS (1 OF 2)
Strengths
Ownership: Members are the owners and
customers of the banks
Weakness
Lack of professionalism: The members lack
right training and educations that is necessary for customer satisfaction
CO-OPERATIVE BANKS
SWOT ANALYSIS (2 OF 2)
Opportunity
Large untapped area for Expansion: As in
India, the major part of the population lives in villages
Threats
Competition: Increasing focus of commercial
banks towards untapped rural sector
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