Cooperation to Prosperity – National Cooperation Policy 2025 Part-II

pp sen Citizens' Urban Co-operative Bank Ltd. Sikkim

A)Strategic Mission Pillar I: Strengthening the Foundation: Objective 1:To create a conductive legal and regulatory environment through timely reforms to provide autonomy, promote transparency, ease of doing business, good governance and provide a level playing field for cooperatives.

Strategies to achieve the objective:

1) Encourage States and Union Territories to suitably amend their respective Cooperative Societies Acts and Rules to provide autonomy, enhance the ease of doing business and good governance in order to a) ensure autonomous functioning and democratic member control and a time-bound and transparent system for the delivery of services to cooperative societies, b) ensure free and fair elections of Board of Directors and office bearers and  transparent recruitment processes for employees, c) infuse democratic, transparent, and data-driven decision-making.

2) Encourage States and Union Territories to adopt the best prevailing provisions by suitably amending their respective Cooperative Societies Acts, Rules, and cooperatives’ bye-laws. The best practices from the Cooperative Societies Acts and Rules from inside and outside India may be compiled.

3)Encourage States to formulate or reformulate their State Cooperative Policy in a manner that both State and Central Governments can work towards common goals for the development of cooperatives.

4) Encourage States and Union Territories  to completely digitalize all processes of States’ Registrar offices (as provisioned in their respective Acts) to make them paperless to a) facilitate all communications with cooperative societies with the Registrar offices through on-line digital means such as web portals, e-mails, mobile phone based messaging (whatsapp etc). b) establish a state level database of cooperatives and enable it to integrate with the existing NCD (National Cooperative database) maintained by the Ministry of Cooperation for real time updates.

5) Encourage States/UTs to establish an institutional mechanism for the revival of sick cooperatives.

6) Bring down cooperative taxes wherever higher than corporate taxes and make cooperatives eligible for sector-specific financial incentives and concessions available to corporates.

7) Converge various programmes and schemes related to cooperatives, implemented by various Departments/Ministries of the Government of India, to bring in synergies based on the Whole of Government approach.

8) Strengthen the role of Primary Agricultural Credit Societies (PACS) by designating them as an implementing agency for various Government schemes being implemented at the grassroots level and incentivizing the well-performing PACS.

9) Encourage the development of sector-wise and state-wise composite performance indices for the ranking of cooperatives on a continuous basis through a web portal to promote healthy competition and learning from the best in the spirit of competitiveness & cooperation.

Objective 2:To foster accessible, affordable finance and equal business opportunities akin to other economic institutions.

Strategies to achieve the objective:

1) Preserve and promote the three-tier credit structure (PACS, DCCB, and StCB) to dispense affordable credit and maintain democratic character.

2)Work jointly with the States/UTs to promote the setting up of one PACS in every panchayat, one DCCB in every district, and one UCB in every urban centre, inuncovered areas, to achieve financial inclusion through cooperatives, subject to viability.

3)Encourage cooperative banks to expand their reach and scope by opening new branches and diversifying financial products and services, subject to viability, to increase their footprints.

4) Promote formation of an apex cooperative bank at the national-level to enhance cooperation among various tiers of cooperative banks so as to harness their true potential and to provide support, capacity building, professionalism, business opportunities, etc.

5)Promote the adoption of digital technology in the cooperative credit and banking sector for improved customer experience, enhanced operational efficiency, and robust cybersecurity to prevent risk and fraud, including – common banking software for different layers of cooperative banks, and building a strong institutional arrangement to provide shared IT-infra to rural cooperative banks.

6) Encourage the recently established Umbrella Organization (NUCFDC) of UCBs to work in the direction of strengthening UCBs by developing and professionally managing a common technology platform to enable UCBs to provide a modern banking experience to its customers,  subscribing to the equity of the UCBs, supporting for short-term liquidity, and obtaining SRO status from RBI to frame rules & regulations and enforce them to protect the customer and promote ethics, equality, and professionalism, etc.

7)Facilitate the strengthening of cooperative banks to become eligible to handle government businesses.

8) Promote the cooperative credit structure, in addition to ARDBs, for dispensing long-term credit.

9) Form a task force to holistically examine the challenges faced by cooperative credit institutions (DCCB, PACS, ARDB and land development banks, etc.) and suggest measures to address these challenges, including issues of long-term credit and recommend a roadmap to increase the deposits of DCCBs, etc.

10) Encourage NCDC, NABARD, and similar institutions to help prepare model DPRs, business feasibility studies, and bankable project reports for cooperatives.

11) Expand the scale and scope of activities of the NCDC and enable it to access cheaper capital for lending at concessional rates to cooperatives.

Objective 3:

To enhance cooperation among cooperatives, strengthen the cooperative structure, and expand the geographical reach.

Strategies to achieve the objective:

1) Encourage cooperatives to create new infrastructure and share existing infrastructure on mutually beneficial terms, including sharing physical infrastructure at the panchayat/district level to provide common services for food and seed quality control testing labs, organic product certification, non-food quality control labs, soil testing facilities, veterinary services, warehouses, cold storage for fast perishable goods and responsive and efficient supply chain and logistics, and also promoting the development of shared digital infrastructure (such as cloud computing, data centre support, and cybersecurity operations) to alleviate the challenges of high costs in technology adoption.

2) Encourage sectoral national federations to develop a repository of success stories on prevailing best practices in the cooperative sector to promote the spirit of cooperation and their emulation.

3) Encourage cooperatives and their members to open their bank accounts and to avail of financial services from cooperative banks.

4) Enable primary cooperatives, including PACS, to work as ‘Bank Mitra’ of DCCBs to provide banking products and services, including Rupay Kisan Credit Card to members, at their doorsteps.

5) Encourage the creation of multipurpose PACS, primary dairy cooperatives, primary fisheries cooperatives, and other sectoral primary cooperatives to cover all uncovered panchayats within the next five years.

6) Enhancing reach and strengthening cooperatives in the North Eastern region, including remote areas, by providing the requisite institutional and financial support.

7) Promote strengthening the upper tiers of the cooperatives to take on larger responsibilities in supporting their primary members to become more competitive.

8) Encourage primary societies, district, and state-level federations to become members of national cooperatives, such as IFFCO, KRIBHCO, NAFED, etc. and the newly formed three national-level MSCS – NCOL, NCEL, and BBSSL.

9) Encourage the national-level federations/unions to play leading roles in revitalizing the cooperative sector by helping member cooperatives to develop and adopt best practices for transparency and good governance, and deepening the cooperative movement through cooperative advocacy, awareness and member education.

To be continued