The Hindu Business Line : AP co-op urban banks for setting up mgmt corpus fund

THE Andhra Pradesh Government should constitute a liquidity management corpus fund with an initial amount of at least Rs 10 crore to help co-operative urban banks meet temporary crisis.

The State Government should also enact a separate co-operative act for these banks or at least add a chapter, as their administration can be equated to that of co-operative societies.

The management of urban cooperative banks, on the other hand, should resort to Securitisation Act for the overdues of over Rs 1 lakh and make use of legal means of recovery.

These were some of the salient demands made by the A.P. State Co-operative Urban Banks Federation.

The State Government should also constitute arbitration and execution cells at district and State level and use full powers for speedy recovery of overdues from borrowers, the Federation's Chairman, Mr G. Rama Moorthy, said in a release.

In view of the innumerable problems facing the co-operative urban banks in the State, the Federation also urged the Reserve Bank of India to allow these banks to undertake all banking activities and non-interest business activities without restrictions.

The RBI should also discontinue thrusting international banking standards on the vulnerable co-operative urban banks and allow them to cater to the needs of the lower strata of the society, the Federation said.

The Apex bank should also extend 180 days NPA (non-performing asset) impairment norm to all these banks, irrespective of their size, it said. The Federation has a membership of 105 and organises training programmes for improving commitment in management, skills and so on.