MOU signed betwen GOI, GOM and NABARD

Pune, Nov 13: In a boost to revive the cooperative movement in the country, the Union Government and NABARD have accepted the Vaidyanathan Committee Report to revive and reform rural credit cooperatives under RBI regulation through special audits with a revival plan outlay of Rs 13,000 crore countrywide including Rs 2,000 crore for Maharashtra.

A Memorandum of Understanding (MOU) was signed between State Cooperation Minister Patangrao Kadam, Chairman NABARD Y S P Thorat and Government of India here today to signal the roll out of reforms in rural credit cooperatives. As per the recommendations of the Vaidyanathan Committee Report, special audits will determine the origin of losses and the central government would infuse 58-60 per cent of the agricultural losses. The remaining 20-22 per cent would be provided by the state government while NABARD will look into the remaining amounts. When asked about the losses accrued due to mismanagement or misappropriation, Thorat said it was for the banks to recover the same using their own methods.

He said that Manuals and Formats have been published for the guidance of credit societies. A system of training has been devised and master auditors have been coasched. The process will begin by December end and by January a clear picture will emerge.

''However, it is our estimate that it would be to the tune of Rs 2,000 crore in Maharashtra, the state government share would be to the tune of Rs 500 crore approximately,'' Mr Thorat said. The fund flow is expected to begin next month subject to legislative changes to be brought in state cooperatives for the implementation of the revival plan, he said adding that for the time being the state government could issue an ordinance to move forward, he informed.

Mr Thorat said that reforms will change the Management, Law and Administration in the Cooperative Sector. This will be implemented through a three tier system. There will be a National Implementation and Monitoring Committee, a State Level implementation and monitoring committee and a District level implementation and monitoring committee.

The mind set of low self esteem of cooperative credit socities will change through trainings, common sofware, common accounting systems.

State Cooperation Minister Patangrao Kadam said that the revival process is binding on all zilla parishad banks and a meeting will be held with central government officials regarding urban credit cooperatives on November 15.

The MOU identifies areas of action for reforms and revival with a view to provide efficient delivery of financial services at grass root level and reforms to restore financial strength of rural credit cooperatives.

The MoU identifies the areas of action for reforms and revival with a view to provide efficient delivery of financial services at grass root level in rural areas by the cooperative cerdit structure. The reform package, based on the Vaidyanathan Committee recommendations will lead to infusion of funds by the Central and State Government, changes in legal framework, with managerial and organisational restructuring with the objective that the institutions comprising Cooperativee Credit Structure remain democratic, well governed, professionally managed, audited and autonomous. Therefore, apart from the funding assistance for restoration of financial health of the structure, the package also covers the costs of training and capacity building to improve the financial management skills of staff and board members, for installation of uniform accounting and information system, as well as for Computerisation.

The financial assistance will be based on special audits of primary societies and the banks. The process of training master trainers for ensuring audit of the vast network of more than 20,000 PACS, has been completed.

The special audit of these institutions will be soon taken up after signing of the MoU. The funding of the three-tier structure will be taken up with a bottom up approach, with PACS as primary beneficiaries of the financial restructuring, followed by DCCBs and SCB.

The funding would cover accumulated losses, infusion of adequate capital, Human Resource Development and computerisation.

UNI