(a) the number of Cooperative Banks in the country state-wise including Uttar Pradesh;
(b) the amount of losses suffered/profits made by these banks during the last three years;
(c) whether any irregularities in the working of these banks have come to the notice of Government; and
(d) if so, the details thereof and the action taken thereon, bank-wise?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA)
(a) & (b): Reserve Bank of India (RBI) has reported that as on December 30, 2009, 31
State Co-operative Banks (SCBs) and 371 District Central Co-operative Banks (DCCBs) were
functioning in the country out of which 1 SCB and 50 DCCBs are in Uttar Pradesh. The working
results of Cooperative banks for the last three years as furnished by the National Bank for
Agriculture and Rural Development (NABARD) are given in the Annex.
(c) & (d): RBI regulates all rural co-operative banks (State Co-operative Banks and
District Central Co-operative Banks) functioning in the country. The NABARD inspects these
banks under the Banking Regulation Act 1949 (as applicable to Co-operative Societies). Some
of the common deficiencies observed during inspection of SCBs/DCCBs include non-compliance
with minimum capital requirements and erosion affecting deposits, improper application of
Income Recognition Asset Classification (IRAC) norms resulting in inflated profit/reduced
losses, shortfall in provision, poor quality of loan appraisal, persistent operational
deficiencies, defective documentation, inadequate financial margins/high cost of management/
adverse working results.
Based on inspection findings, the position of these banks is monitored by RBI constantly
on an on-going basis. The actions, as appropriate, are initiated against the weak/errant
SCBs/DCCBs under various provisions of the Banking Regulation Act, 1949 in consultation
with NABARD from time to time by observing due process. As on date, 10 banks (2 SCBs and
8 DCCBs) have been placed under various directions as per the provisions of the Banking
Regulation Act, 1949 (AACS). The directions differ from bank to bank and included prohibition
from accepting fresh deposits, allowing withdrawal of deposits only up to certain limit,
prohibiting granting of loans and advances to certain areas, etc.