The Hindu Business Line : State co-ops seek higher budgetary provision

Kolkata, Feb. 25 The National Federation of State Cooperative Banks Ltd, the apex body of all state cooperative banks, has submitted to the Union Finance Minister, Mr P. Chidambaram, a six-point memorandum containing several suggestions for incorporation in the Union Budget for 2008-09.

The suggestions include need for enhanced budgetary provision for adequate interest subvention to enable rural cooperative banks to provide short-term loans to farmers at seven per cent rate of interest, a new organisational device for cooperatives as suggested at the recently held Indian Cooperative Congress in New Delhi, restoration of exemptions allowed under Section 80P of the Income Tax Act 1961 for state cooperative banks and district central cooperative banks, reverting to minimum statutory requirement of three per cent cash reserve ratio as against the present 7.5 per cent, restoration of interest benefit on the eligible CRR balances, formulation of institutional protection system to cooperatives at the level of NAFSCOB and creation of a fund at the level of NAFSCOB to provide financial support to rural cooperative banks to launch core banking solutions and disaster recovery system.

Also, as the memorandum suggests, necessary steps should be initiated for ensuring financial inclusion through information technology and introducing real time gross settlement and enabling the state cooperative banks to participate in national electronic fund transfer.

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