Chandigarh (Punjab) [India], Nov 28 (ANI): Punjab cabinet minister Sukhjinder Singh Randhawa on Thursday met Union Minister Anurag Thakur and demanded an early merger of District Central Co-operative Banks into Punjab State Co-Operative Bank with a single focus for the restructuring of Co-operative Banking apparatus in the state.
A press release from Information and Public Relations Department in Punjab said, "During the meeting held at North Block in the National Capital, Punjab Cabinet Minister apprised Thakur that the case for merger of DCCBs into PSCB has already with the Reserve Bank of India and the Union Finance Ministry should liaison with the RBI to speed up the process of merger of these banks."
It further said, "Punjab Co-Operation Minister told Thakur that to take the welfare steps for the farming community in Punjab there was dire need to restructuring the Co-Operative Banking system for providing Co-Operative loans to the farmers and the Union Finance Ministry must take up this issue with RBI on priority basis for early merger of these banks. The much-needed merger of DCCBs into PSCCB would help in many ways to provide services on a much better scale that would add to the prospectus for the welfare of the state farming community."
"Punjab Cabinet Minister also raised the issue with Union State Finance Minister to provide exemption in income tax to the Co-Operative Banks and Societies in line with that of Commercial banks as the Co-operative banks directly influence the financial aspects of small and marginal farmers` economy thus these banks deserve this financial relief on priority basis," the press release said.
"Demanding income tax relaxation for Co-operative banks in tandem with Financial Institutions and banks, Randhwa state that as under this financial relaxation the income tax has been slashed down from 30 per cent to 22 per cent for Commercial Institutions and banks, this relief must be reached to the cooperative banks," it added.
"Raising another important issue, the Cooperation Minister said that the Union Government gives 2 per cent relaxation in terms of interest through NABARD on the loan which is advanced by the cooperative banks to the farmers from its own resources, but this relaxation is absent on the loans provided to the farmers by the cooperative banks through NABARD. Before the year 2006-07, NABARD provided loans to the cooperative banks at a 5.5 per cent rate of interest while the banks gave loans to the farmers at a 10 per cent rate of interest. Now, NABARD gives loans at 4.5 per cent interest rate while the banks charge from the farmers 7 per cent interest rate," the press note said.
"So, the probability for the banks which in 2006-07 was 4.5 per cent now stands at 2.5 per cent. Similarly, the cooperative banks' probability has lessened by 2 per cent. If the Union Government gives relief at a 2 per cent rate on the amount the cooperative sector banks get from the NABARD, then the financial loss to the banks would be mitigated to a great extent," the press note added. (ANI)