Bhubaneswar: In order to realize the vision of ‘Sahakar-se-Samriddhi’ envisaged by Prime Minister Narendra Modi, the newly formed Ministry of Cooperation has taken several important initiatives to strengthen Co-operative Banks and organisations in the country.
Union Secretary Co-operation, Gyanesh Kumar has recently written a letter to Chief Secretary Pradeep Kumar Jena informing about the steps taken by the Centre for strengthening of the Co-operative bodies.
There are 1899 Co-operative Banks in India viz. 1514 Urban Cooperative Banks, 34 State Cooperative Banks and 351 District Central Co-operative Banks in our country with more than 22.49 crore accounts. Several issues being faced by these banks have been resolved recently, said Shri Kumar.
The Board of Directors of Cooperative Banks have now been empowered to formulate their own policy for Compromise Settlements/One Time Settlement (OTS) like that of Commercial Banks, he said.
Urban cooperative banks (UCBs) can now open their new branches up to 10% (maximum 5 branches) of the total number of branches without prior approval of RBI in addition to the existing provision on opening branches through approval route. The UCBs have been allowed an additional period of two years to achieve Priority Sector Lending (PSL) targets.
The government has nominated a nodal officer in RBI for Urban Co-operative Banks for establishing regular communication with the sector while a time limit of 90 days has been fixed for appointment/re-appointment/dismissal of Chairman, Managing Director, CEO, and 30 days fixed for appointment /re-appointment/dismissal of auditors.
The Government has allowed UCBs to provide doorstep banking services to their customers. Similarly, Individual housing loan limits for Urban and Rural Cooperative Banks have been extended more than two times of the existing permissible limit, the Secretary said.
Rural Co-operative banks have been allowed to lend to the commercial real estate – residential housing sector, thereby diversifying their business, he pointed out.
The Co-operative banks have been included as Member Lending Institutions (MLIs) of CGTMSE. With which now the member co-operative banks will be able to take advantage of risk coverage up to 85 percent on the loans given.
For onboarding Co-operative banks to the modern ‘Aadhaar Enabled Payment System'(AePS), the license fee has been reduced by linking it to the number of transactions, he added.
The Union Secretary informed the Chief Secretary that many income tax related difficulties being faced by cooperative societies have also been addressed in the recent past.
The surcharge on Co-operative societies has been reduced from 12% to 7% on income of more than Rs 1 crore and up to Rs 10 crores.
Co-operative societies were required to pay alternative minimum tax at the rate of 18.5%. However, companies paid the same at the rate of 15%. To provide a level playing field between co-operative societies and companies, the rate for the cooperative societies has also been reduced to 15% for Co-operative societies, he said.
The restriction of cash receipts in excess of Rs 2 lakh from any person in a day; or from any transaction; or from multiple transactions has been withdrawn.
Similarly, the new co-operatives that commence manufacturing activities till 31.03.2024 will now get the benefit of a lower tax rate of 15%, as is presently available to new manufacturing companies.
Relief has been given for cash loan/transactions by primary co-operatives, repayment of loan in cash by primary co-operatives and sugar cooperatives by providing deduction on account of the amount incurred for purchase of sugarcane.
A higher limit of Rs 3 crore for TDS on cash withdrawal has been provided to co-operative societies.
Besides, an opportunity has been provided to sugar cooperatives to claim payments made to sugarcane farmers for the period prior to assessment year 2016-17 as expenditure. This is expected to provide them with as relief of almost Rs 10,000 crore.
“We hope that all these efforts will further assist all States/UTs in strengthening the cooperative movement at the grassroot level,” Kumar said in his letter.
