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Vinson Kurian

Thiruvananthapuram , April 12

THE long-lending co-operative credit institutions are poised to win a major battle for survival, with the Centre having reportedly given in to their demand for suitably amending the terms of reference (TOR) of the Vaidyanathan Task Force on Rural Co-operative Credit Structure.

Instructions have been issued to incorporate the clause "revitalising and restructuring with financial support" in the TOR, which mandates the task force to suggest a comprehensive strategy for institutional financing of long-term agriculture and development investment.

Mr K. Sivadasan Nair, Chairman of the federation, told Business Line that no official communication had been issued to the effect, but high-ranking officials had confirmed to him that oral instructions had already been given.

Amending the TOR has been a contentious issue exercising the minds of those at the helm of co-operative credit institutions after the TOR had originally sought to restrict the task force to attending to the issues raised by the short-term credit structure.

Taking exception, the national federation had agreed to attend the New Delhi sitting of the Task Force "under protest".

But, according to Mr Nair, the Delhi sitting was conducted in "a very cordial atmosphere" and the constituent State Co-operative Agriculture and Rural Development Banks (SCARDBs) of the federation were given a "patient hearing".

The next session of the task force is scheduled for April 16 in Bangalore.

The task force was appointed under the chairmanship of Prof A. Vaidyanathan on August 5, 2004 to suggest an "implementable" action plan for reviving the co-operative credit structure (represented by commercial and regional rural banks). Its draft final report addressed the issues raised by the short-term cooperative credit structure only.

Subsequently, the Centre said that there was an urgent need for strengthening the long-term credit structure and decided to entrust this work to the Task Force by way of an order dated January 31.

But the TOR did not reflect the urgent need for "revitalising and restructuring" the long-lending institutions (SCARDBs and its district-level and primary level affiliates).

This is now sought to be corrected by suitably amending the TOR.

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