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State urban co-op banks to go on one-day strike on May 12

Written by: Staff

Mumbai, May 10 (UNI) The Maharashtra Urban Co-operative Banks Federation Limited has called for a one-day strike of all urban co-operative banks in the state on May 12 to protest against Union Finance Minister P Chidambaram's decision to withdraw the tax concessions available to them under Section 80 (P) of the Income Tax Act, 1961.

Over 2,100 urban co-op banks from all over the country and around 35,000 employees would go on strike this Friday, said Prashant Parichark, Vice-Chairman of the Maharashtra Federation, while interacting with reporters here today.

He also condemned the ''insulting and derogatory language'' used by the Finance Minister in Parliament and blamed him for not considering the request of the urban co-operative banks on tax support.

All directors of co-op banks from all over the country will assemble in Mumbai at Azad Maidan at 1200 hrs on Friday and a delegation will then proceed to the office of the Chief Income Tax Commissioner, where it would hand over a memorandum to him to be handed over to both the Prime Minister and Finance Minister, Mr Parichark said.

Claiming that the urban co-op banks cater to the needy sections of society, with the deposit base of the biggest bank at around only Rs 5,000 crore, Mr Parichark said that the co-operative banking sector ''just cannot be put in the same basket as huge-sized public and private sector banks.'' The Reserve Bank of India has already subjected co-op banks to very strict prudential norms, particularly with respect to the net NPA percentage and capital adequacy requirements, he said, adding that ''we are doing our best to cope up with these norms.'' According to him, co-op banks had to make considerable provisioning from profit and if the tax cover was removed as annonced in this budget, then it would impair the strengthening process of the co-operative banks, endangering the sector and the depositors, he said, adding that shareholders also expected a minimum dividend.

''The tax burden will disable the bankers in that respect and cause outflow of paid-up capital as the co-operative law allows it,'' he said, adding that it would be very difficult for co-op banks to satisfy capital adequacy norms if capital was withdrawn.

Besides, the Urban Banking Sector was going through a tough phase and hence this was not the right time to deprive the sector of its due support, Mr Parichark added.


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