India’s first Prime Minister Pt Jawaharlal Nehru had a strong faith in the cooperative movement.
In his speech, in an international seminar on cooperative leadership in South-East Asia, he had said “But my outlook at present is not the outlook of spreading the cooperative movement gradually, progressively, as it has done. My outlook is to convulse India with the Cooperative Movement or rather with cooperation to make it, broadly speaking, the basic activity of India, in every village as well as elsewhere; and finally, indeed, to make the cooperative approach the common thinking of India….Therefore, the whole future of India really depends on the success of this approach of ours to these vast numbers, hundreds of millions of people”.
In the late fifties, the National Development Council (NDC) mooted a National Cooperatives Policy, which included training too. And the Ministry of Cooperation was also formed.
The Cooperation Ministry was also formulated and became an integral part of the Governments of the States and Centre too, to look into areas of Agriculture, (including dairy farming) Housing and Banking.
However, today in Goa, the cooperative sector is being trampled below the feet of the corporate approach and promotion by every successive Government we have seen.
Madgaum Urban Cooperative Bank, Mapusa Urban Cooperative Bank, Sanjivani Sugar Cooperative, Goa Dairy Milk Cooperative and many more are examples of how the apathy of the Government has finished the prospects of the cooperative sectors in Goa. Everyone knows the fate that the Punjab and Maharashtra Cooperative Bank met recently.
MADGAUM URBAN COOP BANK
The Madgaum Urban bank was established in the year 1972. The bank is completing 49 years but is unlikely to see the 50th year of its operations. After functioning for over four decades, in the year 2007, the Madgaum Urban Bank was warned of the consequences of not maintaining the Cash Reserve Ratio (CRR).
Later the bank was fined for Rs 5 lakhs for the shortfall. The misery of the bank continued as mining in Goa went bust and loans to those in the mining and allied businesses were not serviced and Non-Performing Assets (NPAs) mounted.
Meanwhile, the Reserve Bank of India (RBI) changed the rules of asset management for banking and banks like Madgaum Urban and Mapusa were overnight seen as loss-making. This changed the overall fate of the Cooperative banking sector of Goa.
FIRST SIGN OF TROUBLE:
Embargo on withdrawing fixed deposits before maturity
Since the condition did not improve and several loans worth crores went bad, in 2016, RBI stopped the withdrawal of fixed deposits before maturity, giving the first sign that the bank is going bad.
May 2018: All operations shut down; Withdrawal limit capped at Rs 30K
These arrangements remained the same till 2018 and the condition kept deteriorating and in May 2018 all the operations of the bank were shut down. RBI gave six months for the bank to decide their course of action with a Rs 30,000 withdrawal limit fixed for depositors. After that, the bank under the garb of merger talks, has taken five extensions from the RBI till date with talks with two major banks or a bailout falling apart.
Staring at liquidation
The bank is now on the verge of being liquidated.
“The bank talks of merger have stalled. All the bankers are in trouble due to the COVID-19 pandemic as the banks are not responding,” said Managing Director of the Madgaum Urban Cooperative bank Kishore Amonkar.
“The TJSB bank has put forth conditions, which are absolutely unacceptable, which means the talks have ended” said Amonkar, while further revealing that the bank will go for liquidation.
GOA DAIRY MILK COOPERATIVE
A case of crying over split milk, but there’s hope
The Goa Dairy Milk Cooperative too has had its days of downfalls and is now trying to recover from the vacuum that was created due to the extreme selfishness and political interference in operations.
Goa Dairy completes 50 years of operations in October. In the year 2019 and 2020, Goa Dairy has been in news for its bad working and now has an administrator appointed.
Established as a Milk union in 1971, the Milk Cooperative movement went on well for decades. It is said that there were instances in the past when people chose the jobs of Goa Dairy over Government jobs.
However, if we look back in time, since 2007 Goa Dairy has been on its way down. There was some hope seen in 2012 and 2013 when the balance sheets were better but later on too much selfishness and interference has internally finished the dairy of Goa. There were complaints that the board has squeezed the dairy farmers.
“There was too much interference and the damage that has been inflicted will take a lot of time to recover from,” said some of the stakeholders.
As the dairy Cooperative was on its downfall, the Government has appointed an Administrator for Goa Dairy. Traditionally, a milk farmer and now the Chairman of the Goa Dairy Durgesh Shirodker, said “The production of milk earlier was over 80,000 litres per day but there were no profits. But, today with 54,000 litres a day, we are proud to say we are in profits.
Shirodkar added, “We thank the Cooperation Minister and the Chief Minister for not interfering in the dairy operations at all, which will go a long way in the improvement and strengthening of one of the milk unions” he said.
“There was no love for the cooperative sector in the past. But Goa Dairy is doing well now because this Government is supporting us” he said.
The Government had meanwhile let the Surat Milk Union (SUMUL) start operations in Goa. The idea was to start a competition for improvement of the overall sector.
MAPUSA URBAN BANK LIQUIDATION
Declared a multistate bank but no recovery
The Mapusa Urban Cooperative Bank is a classic case on how the Governments have ignored both the constraints and advantages of the Cooperative societies. Mapusa Urban suddenly became a multistate bank by virtue of a change in the law and that the previous rules of recovery don’t apply to the bank. An administrator was appointed to the bank and after the bank challenged the same between 1987 and 1997, but the High Court said that the bank is multistate.
The erstwhile Congress Government had put forth an appeal in the Supreme Court challenging the order. The apex court also said that the Mapusa Urban is multistate. However, there was no recovery of lending’s by the bank for 13 years.
Mapusa Urban was giving loans below Rs. 5 lakhs for several years. Some were overdue for 3 or 4 months and some for 1 or 2 years. The RBI said that the unsecured loans, which are over 3 months overdue, will be classified as Non-Performing Assets.
As the Mapusa Urban mostly had small loans, the entire small loans default had to be shown; and this affected the balance sheet dearly.
This snowballed into a very huge amount of overdue loans and went against the banks perspective. Even the loans given 20 years back became overdue.
“For a period of 6 years during the BJP Government, I had stepped down from the bank and handed it over to the ruling side to save the institution. I also joined BJP to save the bank. But, nothing happened,” revealed former Chairman of the bank, ex-Union Minister Ramakant Khalap.
“The Governments have shown total apathy towards the Cooperative sector which has resulted in a total collapse. We have sent hundreds of proposals to the Government to infuse Government shareholding and save the lakhs of depositors and the bank. But, nothing happened,” said Khalap, while speaking to Herald.
“Every 5-year plans had chapters of the cooperative sector of India and plans would be made to strengthen the sector. This practice of five-year planning has stopped absolutely in the last 20 years” he added.
“There is not one word in Cooperative that can be heard in the Parliament today”, the veteran lamented
