The Hindu Business Line : `Vaidyanathan panel report not acceptable in present form'

THE Chairman of the Karnataka State Apex Cooperative Bank Ltd, Mr Rajendra Kumar, has said that the implementation of the Vaidayanathan Committee report in its present form is not acceptable to cooperative banks.

Presiding over a meeting of the Directors of Apex Cooperative Bank and the Presidents of District Central Cooperative banks in Mangalore on Thursday, he said, "Accepting the report in its present form is like pledging our powers to the Reserve Bank of India. The State Government will not have any authority on the cooperative banks, if the report is implemented in the present form."

States such as Punjab, West Bengal, Andhra Pradesh and Kerala have also opposed its implementation in the present form. However, he said, the cooperative banks are ready to accept the report with amendments.

Stating that waiver of interest on farm loans has affected the loan recovery rate, he said there was 16 per cent decline in the loan recovery in 2004-05 compared to the previous financial year.

Loan recovery by cooperative banks, which was at 43.4 per cent during 2003-04, came down to 27.4 per cent during 2004-05.

Assurance by the politicians to waive agriculture loans was one of the reasons for the decline in recovery rate, he said.

A Government Order dated April 27 says that the Government will waive interest and penal interest on short-term, medium-term and long-term farm loans — which were due on March 31, 2004 — till March 31, 2005.

To take this benefit, the borrower should repay the principal amount between April 1, 2005 and June 30, 2005 .

Mr Rajendra Kumar said that the Government should reimburse the full amount as the district central cooperative banks and primary agricultural cooperative societies cannot bear this burden. Since this facility helps only the defaulters, it should also be extended to those who repay promptly, he said.

A delegation of Apex Cooperative Bank with representatives from cooperative banks, will meet the Chief Minister and the Finance Minister in this regard, he said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page