PM’s shared package for co-op banks ‘not enough’ for state

SOME MORE UP was hoping to get an exclusive deal of ` 1,524 crore

LUCKNOW: The announcement of Rs 2,375 crore package for revival of cooperative banks in four states by Prime Minister Narendra Modi during his Varanasi visit might bring cheers to weavers and farmers but the state government is not much enthused with the declaration. Reason: The state government had sent a proposal of Rs 1,524 crore for revival of 16 district cooperative banks alone and now it would have to share the package with seven other banks in Maharashtra, West Bengal and Jammu and Kashmir.

Though UP will get lion’s share of the package, state government will still have to arrange 70% of the fund whereas the central government and NABARD would release remaining 30% of the package.

This means that of the Rs 2,375 crore package announced by the PM, state governments will contribute Rs 1,464.59 crore whereas central government would release Rs 673.29 crore and the remaining Rs 237.54 crore would be borne by the National Bank for Agriculture and Rural Development (NABARD).

“The state government will urge the central government to allocate an exclusive Rs 1,524 crore package for revival of 16 district cooperative banks in UP,” said a state government official.

Under the three-tier cooperative bank system in the state, UP Cooperative Bank in Lucknow has 50 district cooperative banks with 1,330 branches spread in various districts and 7,479 primary agriculture credit societies.

The Reserve Bank of India has given licence to 34 district cooperative banks while 16 sick district cooperative banks have been left in the lurch.

These banks are situated in Faizabad, which requires Rs 31 crore for revival, Ghazipur (Rs 38 crore), Varanasi (Rs 65 crore), Hardoi (Rs 76 crore), Azamgarh (Rs 82 crore), Basti Rs 96 crore), Allahabad (Rs 101 crore), Sitapur (Rs 103 crore), Ballia (Rs 118 crore), Fatehpur (Rs 119 crore), Gorakhpur (Rs 131 crore), Siddharth Nagar (Rs 49 crore), Bahraich (Rs 75 crore), Sultanpur (Rs 91 crore), Jaunpur (Rs 138 crore) and Deoria (Rs 203 crore).

The working of the 16 unlicensed banks is spread in 25 districts with 469 branches and 3,311 primary agriculture credit societies. Around 27.11 lakh members are associated with these banks, which have 2,036 employees.

“The banks have been giving loans to marginal and needy farmers in rural areas. The proposal for revival of the sick district cooperative banks was sent to the central government on March 31, 2013. Since then, the revival package has been pending before the central government,” said the officer.

Delay in revival of the banks has made adverse impact on distribution of not only fertilizer and seeds in the districts but also on the purchase of wheat and paddy.

“Out of the 16 banks, 13 are located in east UP. If government fails to revive the sick cooperative banks, it would jeopardise the cooperative movement in Purvanchal region as well,” he said.

THOUGH UP WILL GET LION’S SHARE OF THE PACKAGE, STATE GOVERNMENT WILL STILL HAVE TO ARRANGE 70% OF THE FUND