Mohinder Verma
JAMMU, July 10: Caught in a peculiar situation following no breather from the Planning Commission of India on recapitalization of three ‘ailing’ Central Cooperative Banks, the Cooperative Department has decided to approach the State Cabinet very shortly on mandatory liquidation of Rs 100 crore liabilities to meet the condition set by the Reserve Bank of India.
Official sources told EXCELSIOR that during the Annual Plan finalization meeting held yesterday, State Government vociferously projected the requirement of financial assistance in this regard before the Deputy Chairman of the Planning Commission of India, Dr Montek Singh Ahluwalia.
“The State urged the Planning Commission to either sanction soft loan to meet the financial implications involved in bringing out three ailing Cooperative banks out of the red or grant a suitable package on the pattern of North-East”, they said.
However, there was no positive response from the Planning Commission, sources said, adding “what to talk of giving any financial assistance the Planning Commission even didn’t give any assurance to help the State in clearing the liabilities”.
Stating that State has been caught in a peculiar situation following denial of any relief by the Planning Commission, sources said, “now the Cooperative Department has been left with no other option but to place a proposal before the State Cabinet for sanctioning of at least Rs 100 crore in order to liquidate part of liabilities and meet the condition set by the Reserve Bank of India (RBI)”.
Disclosing that RBI has set a deadline of July 15 for liquidation of Rs 100 crore liabilities by the three ailing Cooperative Banks, sources said, “if the Government meets this condition of RBI the latter will consider extension in the time-frame for obtaining license to work as banks”.
Minister of State for Cooperatives, Dr Manohar Lal Sharma, who has already discussed the situation with the Finance Minister, Abdul Rahim Rather, has directed the Commissioner Secretary Cooperatives to prepare a proposal in this regard within next few days and submit the same for consideration of Cabinet.
It is pertinent to mention here that an amount of Rs 98.86 crore is required to achieve the target of 4% Capital Adequacy Ratio (CAR) fixed by the RBI in case of Anantnag Central Cooperative Bank; Rs 26.43 crore to bail Baramulla Central Cooperative Bank out of the red and Rs 187 crore to attain the 4% CAR in respect of Jammu Central Cooperative Bank.
When contacted, Minister of State for Cooperatives, Dr Manohar Lal Sharma confirmed that Planning Commission has not considered the request of the State Government. He, however, said that Chief Minister, Omar Abdullah was in constant touch with the Union Finance Minister for extending some sort of financial help to the State to meet the requirements of Reserve Bank of India.
Disclosing that the issue was thoroughly discussed with Reserve Bank of India Governor, Dr D Subbarao during his visit to Kashmir valley in the recent past, the Minister said, “the RBI Governor as well as Union Finance Secretary have given us the time till August 15 to submit a detailed proposal on our demand regarding extension of package to J&K on the pattern of North East”.
“If our demand is considered, we will get 90% share for liquidation of liabilities from the Union Government”, he added. However, sources said that State Government will have to liquidate at least Rs 100 crore at any cost to get any sort of reprieve.
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