The Hindu Business Line : AP co-op banks seek Rs 100-cr crisis management fund

THE Federation of Andhra Pradesh Urban Co-operative Banks has urged the State Government to set up a Rs 100-crore "liquidity crisis management fund'' to enable the banks to get over financial difficulties.

Mr G. Ramamurthy, Chairman of the federation, said at a press meet here that several urban co-operative banks in the State were caught up in a liquidity crisis, as the Government did not have the correct perspective and was adopting wrong policies.

He said the Government should set up the fund with a corpus of Rs 100 crore, ``as several good banks are also getting into trouble due to temporary liquidity problems.''

He expressed regret that both the State Government and the RBI were neglecting the sector and, even though the co-operative banks were playing as important a role as the commercial banks, there was no support for them.

He said the directors of the urban co-operative banks should also be allowed to take loans, subject to a ceiling, and the deposit insurance limit should be raised to Rs 5 lakh to instil more confidence in the depositors.

He added the State Government should formulate and announce a clear policy on the co-operative banking sector and issue guidelines.

``At present, the Government policies are designed to weaken the co-operative movement to pave the way for commercial banks, especially the private ones,'' he alleged.

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AP co-op banks seek Rs 100-cr crisis management fund