Government to Infuse Rs 2,375 Crore in 23 District Cooperative Banks
These unlicensed banks include 16 in Uttar Pradesh, three each in Jammu and Kashmir and Maharashtra, and one in West Bengal. These banks have deposits base of about Rs 6,839 crore and loan books of around Rs 3,774 crore. This will result in protecting the interests of depositors and catering to the credit needs of farmers.
Conditionalities include bringing the NPAs to at least half of the current levels by March 31, 2017, making 15 per cent growth rate of deposits for next two years; drawing up of a monthly Monitorable Action Plan, placement of competent CEOs fulfilling 'fit and proper' criteria, and putting Corporate Governance Systems in place.
Once revived, these cooperative banks would become eligible for obtaining licenses from the Reserve Bank of India (RI) for continuing their operations in rural areas and would also be able to meet CRAR (capital to risk-weighted assets ratio) requirement prescribed by the apex bank. This means 7 per cent CRAR by 31st March, 2015 and 9 per cent by 31st March, 2017.
For the purpose of implementation of the scheme, a tripartite agreement in the form of memorandum of understanding (MoU), stipulating conditionalities and deliverables, will be signed between the Centre and state and NABARD.
During the implementation of the scheme, operations of these 23 unlicensed DCCBs would be closely monitored by NABARD and the RBI, so that they meet the licensing requirement within the time frame as prescribed in the scheme, it said.