The Hindu Business Line : Naidu seeks Nabard help in revamping credit cooperatives

THE recapitalisation and restructuring of credit cooperatives in Andhra Pradesh would require a financial support of Rs 2,350.32 crore, as per an expert committee chaired by Mr P.V.A. Rama Rao, former Chairman and MD of Nabard.

Stating this the Andhra Pradesh Chief Minister, Mr N. Chandrababu Naidu, urged the present Chairperson of Nabard, Ms Ranjana Kumar, to consider utilisation of funds from the Agriculture Infrastructure and Credit Fund, announced by the Union Finance Ministry recently for the above purpose, pending resolution of various connected issues.

The Agriculture Infrastructure and Credit Fund is to be operationalised by Nabard and the money utilised for improving the functioning and viability of cooperatives. The Chief Minister and the Nabard Chairperson who met here yesterday discussed various issues concerning the AP Co-operative Bank (APCOB).

Mr Naidu requested Nabard to provide refinance to APCOB for providing loans to the farmers directly in 8 districts, which do not have District Cooperative Credit Banks (DCCBs). He said the Nabard was considering sanction of a consolidated limit to APCOB for providing crop loans during the year 2004-05 based on NPA position of the APCOB and the DCCBs. The rate of interest on short-term refinance is proposed to be based on the level of NPAs.

The Chief Minister sought a separate policy or the necessary relaxation in sanction of limits to APCOB and DCCB's in the State, since the short term and long term cooperative credit structures were integrated, hence the NPA levels were relatively high.

In view of the severe drought during 2002-03 and drought and cyclone during 2003-04, the cash flows were inadequate to make remittances to Nabard up to 25 per cent of drawals made in khariff/rabi on March 31/June 30 as stipulated. Mr Naidu wanted this condition to be relaxed for the current year to APCOB and DCCBs in AP.

The Chairperson of Nabard agreed to positively consider all the issues raised by the CM, according to an official release.

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