Kerala: PACSs to get more say in district banks

THIRUVANANTHAPURAM: The Kerala Cooperative Societies (Amendment) Bill, which will ensure that primary agricultural credit societies (PACS) and urban cooperative banks (UCBs) have greater powers in running district cooperative banks, was tabled in the Assembly on Monday.  The Bill, which will replace the ordinance by the same name, is expected to prevent corruption, illegal appointments, misappropriation of funds, and illegal promotion in the sector. The Bill seeks to amend Section 2 and 18 of the Kerala Cooperative Societies Act, 1969, to ensure that only PACS and UCBs have the voting power in district cooperative banks. Out of the 11,759 societies affiliated with DCBs only 1,670 are PACS, which is 14.2 per cent. But a look at the paid up capital of DCBs will reveal the anomaly.

DCBs have a paid up capital of Rs 835.44 crore, and Rs 751.26cr or nearly 85 per cent is contributed by PACS. Nearly 50 per cent of deposits in PCBs (Rs 26,066 crore), too, come from PACS. At the same time, non-agricultural credit societies, which have greater voting powers, contribute just '7,630 crore to PCB deposits.  The irony is, DCBs were formed to provide credit to PACS. Sections 16A and 19A of the 1969 Act would be omitted to ensure free and fair elections to the committees of cooperative societies. 

It has been found that provisions for cancelling the membership of a person if he failed to use the services of a society for two consecutive years and fails to attend the general body meeting of the society were hindering free and fair elections. To prevent corruption, Section 32 of the 1969 Act would expand the scope of financial assistance to include any assistance from The state Coope-rative Development and Welfare Fund Board, the Deposit Guarantee Sche-me of The state Coope-rative Deposit Guarantee Fund Board, Risk Fund Scheme of state Coope-rative Development and Welfare Fund Board, NABARD, and National Cooperative Development Corporation. The Amendment Bill has been formulated on the basis of recommendations submitted by a committee set up to study the three-tier cooperative system.