After facing a loss of Rs 700 crore, the Cooperative department of Punjab has decided to merge 20 District Central Cooperative Banks (DCCBs) with the Punjab State Cooperative Bank (PSCB). The Punjab Cabinet on Monday gave its approval for the merger.
The 20 DCCBs, having 804 branches across the state, were district-wise independent authorities. With the merger, the DCCBs would now be the branches of the PSCB and function like other commercial banks.
Out of 20 DCCs 11 were in losses. The worst was the DCC Muktsar, the former Chief Minister Parkash Singh Badal’s district, according to Cooperation Minister, Sukhjinder Singh Randhawa. “We were surviving only because of Patiala and Nawanshahar DCCs. Otherwise, we would not even have money to lend credit to the farmers.
The Cooperative banks are considered the backbone of rural credit system. There are around 9 lakh farmers who hold Kisan Credit Cards of the cooperative banks in the state and are dependent on credit in the prevalent cooperative structure. “The merger was the need of the hour to run the system smoothly and ensure that there was enough money for lending.” said Randhawa.
A government statement after the decision that it has been taken in view of RBI guidelines, which mandate that all DCCBs should have a minimum capital adequacy ratio of 9 per cent (CRAR). Although at present the DCCBs are adhering to the required CRAR of 9 per cent (CRAR), there is hardly any space for majority of these DCCBs to enhance their business and to increase their profitability.
The Cabinet also approved a One Time Settlement (OTS) policy to give defaulter companies the last chance to settle their dues with Punjab State Industrial Development Corporation (PSIDC) and Punjab Financial Corporation (PFC).
The government is coming out with OTS Policy-2018 following representations and suggestions from Chamber of Commerce and Industries Association and after marathon discussions with the promoters for rehabilitation and revival of the industries in state.
Based on Finance Minister Manpreet Singh Badal’s suggestion that the defaulters should be dealt with an iron hand, the Cabinet, agreed that this should be the last such OTS scheme. The scheme aims to help PSIDC recover Rs 80-100 crore and PFC Rs 7-10 crore.
The PSIDC has extended term loans to 861 industrial units, of which 739 units have already settled with the corporation and only 122 units are pending, and all of them have already become non-performing assets. Besides, PSIDC had made equity investment in 322 units, of which 245 collaborators have already settled their dues by way of buyback of their equity/settled their accounts under OTS, and only 77 promoted units are yet to buy way of equity investments. Similarly, PFC extended term loans to 18000 loanee concerns, of which 16900 have settled their accounts and about 1142 units are at present outstanding and the entire portfolio has been declared NPA.
Water Regulation Bill
The Cabinet also gave its nod to the draft of Punjab Water Resources (Management and Regulation) Bill, 2018, aimed at ensuring judicious, equitable and sustainable utilisation and management of the state’s critical water resources.
The proposed Punjab Water Regulation and Development Authority (PWRDA) would have a Chairman, besides two members to be appointed by the state government.
Amarinder Singh’s government wants to ensure strict measures so that the state is not converted into a desert due to over-consumption of water. The regulator thus formed would be an independent body, empowered to issue directions and guidelines for the conservation and management of the water resources. The Authority would also be empowered to issue tariff orders specifying the charges to be imposed by entities supplying water for drinking, domestic, commercial or industrial use.
Dera Baba Nanak Development Authority
A resolution to set up a Dera Baba Nanak Development Authority ahead of the 550th Prakash Purb of Sri Guru Nanak Dev was also approved. The area around which the Kartarpur corridor would be developed, would have a master plan.
In its special resolution, the Cabinet also welcomed the opening of the Kartarpur Corridor as a historic step to mark the auspicious occasion.
“The Cabinet noted the persistent efforts by Captain Amarinder Singh, which had culminated in the momentous decision to open the corridor,” said a government statement. Interestingly, the Cabinet did not make any mention of Local Bodies Minister Navjot Singh Sidhu.
The Punjab Cabinet has decided to summon the next session of the Punjab Vidhan Sabha from December 13 to 15, 2018.
The session would commence on the afternoon of December 13 with obituary references. Legislative Business would be transacted in both, the morning and evening sessions on December 14. The house would adjourn sine-die on December 15.