National Conclave of Scheduled and Multi-State Urban Co-operative Banks and Credit Societies
Recently, the Conference of ‘National Conclave of Scheduled and Multi-State Urban Co-operative Banks and Credit Societies’ has been organized by the Ministry of Cooperation.
The conference is organized by the Ministry of Cooperation and National Federation of Urban Cooperative Banks and Credit Societies Limited (NAFCUB).
The need for modernization of co-operative banks was emphasized in the conference.
Importance of Co- Operative Banks
- It increase the bargaining power of the poor,
- It encourage leadership development,
- It promotes financial inclusion etc.
Challenges before the Co- operative Banks
- Government interference in such banks is high and they are also politicised.
- Such banks lack a fair audit mechanism.
- Lack of propensity to earn profit over cost.
- They face double regulation. These are subject to the regulation of both the State Registrar of Societies, and the Reserve Bank of India.
Constitutional Provisions with respect to Co-operative Societies-
- ‘Co-operative Societies’ is a subject of ‘State List’ under the Seventh Schedule.
- Part IXB was added to the Constitution through the 97th Constitutional Amendment Act.
- In Union of India v. Rajendra Shah, and others case (2001), the Court partially struck down the amendment. According to the Court, certain provisions of the amendment encroach upon the powers of the State Legislatures with respect to the subjects in the State List.
- Article 19(1) (c) guarantees freedom to form association or association or co-operative society.
- Article 43B sttes that the state, voluntary formation of co-operative societies, autonomous. Will endeavor to promote functioning, democratic control and professional management.
- Earlier, a new Ministry of Co-operatives was constituted. It has been formed to streamline processes for ease of doing business for cooperatives and to enable the development of multi-state cooperatives.
Source – The Hindu
