Indian Cooperative has received a mail from Rajiv Padia who also finds NABARD role vis a vis cooperative banks not constructive. Debate being soul of intellectual process we produce below his take on the subject. Excerpts
NABARD and RBI both are are responsible for this condition of CCI. They always put restrictive policies on State and District Central Cooperative Banks.
They never allow these banks to come out of artificially crafted well in frog-in the well manner.
While in the matter of financial discipline and economic prudence they are treated at par with Commercial Banks but when it comes to doing profitable business, they are reminded of their puniness.
In the given scenario CCIs can survive only if they are allowed to venture out and do business in other sectors and are not entrapped to agriculture or PACS alone.
RBI and NABARD still think that State and District Cooperative Banks are meant for PACS only.
We have visited USA and studied working of credit unions. It has been observed they survive even where big banks fail in USA.
RBI and NABARD must have some positive policies for State and District coop Banks.