Expressing concerns over cooperative scams, Karnataka Chief Minister Basavaraj Bommai on Friday appealed leaders in the sector to work hard on reestablishing trust.
Without mentioning any scam, at the Cooperative Beneficiaries Conference here, Bommai said that frequent scams at cooperative banks created a "trust deficit" among borrowers. "This needs to be addressed with immediate effect," he said.
“Cooperative banks used to be the preferred banking institutions for people in rural areas to meet their financial requirements. These institutions commanded the trust of the local communities. But, on account of widening trust deficit, these entities are now struggling to survive and have seen a sharp erosion in business in recent years. We need to reverse this trend by re-establishing trust among small and medium investors,” Bommai explained.
He also asserted that the cooperative sector needs to evolve itself from ‘Cooperative Capitalists’ to 'Cooperative Activists'. “The cooperative sector was once fertile ground to create wide range of activists, but of late it is springing out capitalists,” he said.
Meanwhile, heaping praise on Karnataka cooperative sector, Shah observed that the first cooperative society in India was established in Kanaginahal village in Gadag district in 1905. The cooperative movement started from there and today has successful models like Amul, Kribhco, IFFCO and Lijjat Papad, he said.
“Karnataka has set many ideal models in the field of cooperatives and other states can follow the best practices of this state and create their own new models,” Shah said.