RBI inks MoU with Govt to revamp State?s co-op banks

THE SIGNING of a MoU between the Madhya Pradesh Government and the Reserve Bank of India here today to revamp urban cooperative banks in the State has been hailed as a historical move in the cooperative sector.

THE SIGNING of a MoU between the Madhya Pradesh Government and the Reserve Bank of India here today to revamp urban cooperative banks in the State has been hailed as a historical move in the cooperative sector.

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The MoU was signed by Secretary, Co-operatives RK Swai on behalf of the State Government and Executive Director, RBI (Central Office, Mumbai) VS Das at the Vidhan Sabha’s conference hall. The agreement is expected usher an era of revamping the rural cooperative credit institutions in the State.

MP is the fourth state after Andhra Pradesh, Karnataka and Gujarat to have entered with an agreement with the nation’s central bank in this direction. The onus of revamping operation would rest on a task force comprising representatives from the State Government, RBI, National Federation of Urban Banks and State Federation of Urban Banks.

The task force would identify weak urban cooperative banks in the State and a time-bound action plan would be prepared with constant monitoring towards financial strengthening of the banks.

The MoU is a part of the report submitted to the Government of India by a committee chaired by Prof A Vaidyanathan on Short Term Cooperative Credit Structure during February 2005. The RBI in its mid-term review of its annual policy in 2004 had announced on preparing a vision document on urban cooperative banks and the same was released in March 2005.

Speaking on the occasion, Cooperative Minister Gopal Bhargava said the initiative would prove a milestone for the State’s urban cooperative banks.

Simultaneously, he said the banks too have to understand the motto of cooperation and work in that direction. Bhargava said that the MoU would help in improving functioning and financial health of the urban cooperative banks.