Merge all coop banks and societies: Economic panel

Panaji: With the

cooperative

sector likely to take a hit due to the Covid-19 crisis, the economic revival committee in its final report has recommended that the state government merge all cooperative banks as well as cooperative societies and form just one cooperative

bank

for the entire state.

There are over hundreds of cooperative societies and cooperative banks functioning in the state. The Reserve Bank of India recently cancelled the banking licence of the Mapusa Urban Cooperative Bank Ltd and imposed financial sanctionson the Madgaum Urban Cooperative Bank.

The committee headed by industrialist Shivanand Salgaocar said public sector banks are seeing mergers and consolidation, pointing to the existence of scale economies in the functioning of these critical financial institutions.

“The state government could push for similar consolidation of cooperative credit societies and cooperative banks (many of which were in trouble even before the current crisis) and have just one cooperative bank for the entire state. The state could even push for corporatisation of the resultant entity,” he said

The committee said banks in Goa have a low CD ratio which is the result of low credit offtake and large deposits (to the extent of Rs76,000 crore). Besides bank deposits, the amount of investments in government bonds, MFs and debt funds is quite substantial, which are not reflected in Goa as most fund managers’ accounts are held outside Goa.


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