DUCBF criticises govt for making cooperative banks surpluses taxable

New Delhi, Sep 25 (UNI) Delhi Urban Cooperative Banks Federation (DUCBF) has condemned the Government's decision of ousting the cooperative banks from the purview of section 80P of IT Act.

''The Finance Minister placed false and distorted facts before the Parliament to get his proposal approved. He misinformed the House that Coopeerative Banks have no regulator, they do not get their accounts audited and were comparable with other commercial banks,'' the federation said in a statement.

It said that the co-operative banks have two regulators-- Reserve Bank of India and Registrar Cooperative Societies-- and their accounts are audited every year.

The Government's decision would make the income/surplus of the co-operative banks as taxable effective from this year.

The impact of such a move shall be catastrophic with regard to creation of reserves, capital formation and provisioning of bad debts. Urban Cooperative Banks do not have any avenue for raising capital except to retain their surpluses/profits, which help in strenghthening the financial health of these banks.

The Federation has requested its member banks in Delhi to adopt a suitable resolution and submit the same to the Prime Minister and the UPA Chairperson.

The Federation has also initiated enmass signature campaign to highlight the issue amongst masses.

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