Sharad Pawar slams RBI policies towards cooperative banks, says 'give reins to specific people'

Maharashtra has a strong network of cooperative bodies, which also forms a support base for the NCP and Congress who share power with Shiv Sena in the Maha Vikas Aghadi government.

Pune: NCP chief Sharad Pawar on Tuesday (September 7) criticised policies of the Reserve Bank towards cooperative banks, saying an attempt is made to "weaken" the cooperative movement by handing over the reins of the sector to a specific set of people.

"It seems the policy of the RBI is to gradually bring down the number of cooperative banks, which help the common man in difficult times and close them down, merging them with other banks. All this is not only detrimental to the cooperative movement but is also dangerous for the common man," Pawar told reporters.

The veteran politician said the "perspective" of the top bank towards cooperative banks is "not at all appropriate". The Nationalist Congress Party has been opposing the supervision of cooperative banks by the RBI since the changes were made to The Banking Regulation Act approved by Parliament in September 2020.

As per the amended law, the RBI can supersede the board of directors of cooperative banks after consultations with the concerned state government. Pawar said it is the right of members of a cooperative institution to decide to whom the reins of the bank should be given, who should be appointed as director and if the performance of that director is not up to the mark, remove him.

"But now the RBI is saying that they will appoint the person irrespective of whether he is a member of the institution or not...So there is an attempt to slowly weaken the cooperative movement by handing over the reins of the cooperative sector in the hands of some specific set of people," he added.

The Modi government recently carved out the Ministry of Cooperation, which is headed by Union Home Minister Amit Shah. Pawar had earlier said the co-operative societies fall in the purview of the state government, and the Central government cannot interfere.

Speaking about the 97th Amendment, which dealt with issues related to the effective management of cooperative societies, Pawar on Tuesday said it was he who had tabled the amendment when he was a minister. "I had tabled the amendment following detailed deliberations and meetings with cooperatives ministers from the state and chiefs of cooperative institutions.

The important part of the 97th amendment was that it brought limitations on state governments' unnecessary intervention into these institutions," the former Union agriculture minister said.

He said a formula was decided in the 97th amendment about the extent to which a state government can intervene in the cooperative institution.

"In a nutshell, cooperative banks were given some sort of protection. Unfortunately, talks are going on to bring changes to that. Though it is not being done yet, we endeavour to approach the people who are at the helm and present the facts to steer these banks away from the crisis," he said. 

(With agency inputs)