Agricultural co-ops to gain more autonomy

Govt nominees done away with, institutions to decide interest rates


The amendments usher in a sea change in the scope of authority and autonomy of the Societies. There will be no government nominees in PACCS henceforth. The cooperative institutions will have the authority to decide interest rates on deposits and loans.

The State government’s subscription to the share capital of any society will not exceed 25 per cent of the total share capital. The Governor promulgated an ordinance on Oct 30 effecting 18 amendments to the Act, based on the recommendations of Vaidynathan Task Force.

A separate chapter - “Special provisions application to societies in cooperative credit structure,” dealing with financial and internal administrative matters, loan-related policies and internal control systems of societies has been included in the Act.

The National Bank for Agriculture and Rural Development (NABARD) had constituted the Vaidyanathan Task Force to recommend measures for increasing the viability and reorganisation of credit cooperative institutions including central cooperative banks, apex banks and primary agriculture cooperative societies.

The amendments have been incorporated following a tripartite agreement between the state government, the Centre and the NABARD in March 2008.

Revival

Registrar of Cooperative Societies D N Nayak told Deccan Herald that the new provisions and amendments will help the State government in reviving as many as 3,900 PACCS with a financial assistance of Rs 570 crore from the Centre. In addition, the State government will provide an assistance of Rs 90 crore. However, only such PACCS which have succeeded in recovering at least 30 pc of the outstanding advances as on June 30, 2004 are eligible for revival scheme. In the first phase the government assistance will be applicable to short term loans, Nayak pointed out.

The Board of a primary agricultural credit society can be superseded on the grounds of society incurring loss for three consecutive years, serious financial irregularities or fraud, lack of quorum for three consecutive meetings or a judicial directive.

Elections to the committee of a cooperative society will have to be conducted before the expiry of its term and in case of the superseding of the society, elections will have to be conducted within two months.

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