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Cooperatives in the State are well on the way to fiscal consolidation after being in the lurch until last year.
This is as Mr K. C. Shashidhar, outgoing Chief General Manager of the Regional Office of National Bank for Agriculture and Rural Development (Nabard), sees it.
‘TOP-DOWN' APPROACH
The cooperatives have been traditionally strong at the grassroots level, but weak at the middle (district) and weakest at the apex (State) levels.
“So the strategy was to work our way top-down to the middle-level, which has paid off,” Mr Shashidhar told Business Line here on Friday.
Nabard started to intervene at the level of the apex-level Kerala State Cooperative Bank (KSCB) and together launched a series of initiatives aimed at improving its lot.
The KSCB was asked to prepare a perspective plan for itself. Nabard then suggested various ways of improving its financials and overall performance.
Mr Shashidhar said he received excellent support from the State government in this initiative. The net result is that KSCB has been put on the road to recovery.
Nabard has since sanctioned Rs 500 crore to the apex cooperative bank but insisted that it keep its house in order.
All this time, Nabard has been providing interest subvention facility to ensure that the interests of farmer beneficiaries are not affected.
The focus then shifted to the district-level cooperative banks, Mr Shashidhar said.
“I'm happy to report that all 14 district-level banks are now resting on solid financial pillars and meeting all provisions of the Banking Regulation Act.”
Primary-level cooperatives are being groomed to become multi-service cooperative banks by imbibing the good aspects of the Vaidyanathan Commission report.
INSTITUTION BUILDING
According to Mr Shashidhar, the work with the cooperatives sector in the State falls within the ambit of the ‘institution building' function of Nabard.
Changes cannot be brought about overnight in any system. This explains the slow grind but the interests of beneficiaries cannot be usurped either, he said. .
The Nabard Regional Office here sanctioned Rs 2,700 crore to the banking system in the State in 2011-12. This has been highest for any State for the period, Mr Shashidhar said.
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