K N Rajanna.
Credit: Special Arrangement
Cooperation Minister K N Rajanna told the Assembly on Thursday that he is planning to do away with the federation of self-regulated Sahakari Souharda institutions amid concerns over poor governance.
According to Rajanna, Karnataka has over 5,000 Souharda Sahakari institutions of which 1,500 are on the “verge of closure.” He declined to reveal their names as it could trigger panic among depositors.
Souharda Sahakari institutions function under their apex body the Karnataka State Souharda Federal Cooperative Ltd.
Rajanna was responding to a calling-attention motion by Basavanagudi BJP MLA Ravi Subramanya who raised the issue of ensuring proper recovery of loans at scam-hit institutions such as Sri Guru Raghavendra Sahakara Bank and Sri Vasista Credit Souharda Sahakari Ltd.
“Because a Souharda Sahakari institution has ‘Sahakari’ in its name, people think it is the responsibility of the cooperation department. In fact, we have nothing to do with Souharda Sahakaris. Under the Karnataka Souharda Sahakari Act, we have powers for registration and cancellation only,” Rajanna explained.
Citing the examples of irregularities at Vasista and Sri Kanva Souharda Cooperative Credit Ltd, Rajanna said the government cannot do anything. “People ask questions of us. We can’t do anything because they have their own federation,” he said. “I’m planning to do away with the Souharda Federation.”
A senior cooperation official told DH that the government has no control over the Souharda Sahakari institutions. “The idea was to allow cooperatives to function independently without government intervention. But it is being misused to a great extent,” the official said.
The official said that the idea of revisiting the Souharda Sahakari concept would come under the purview of a committee under former deputy chief minister Laxman Savadi constituted recently to recommend legal changes to strengthen the cooperative sector.
Earlier this month, Chief Minister Siddaramaiah decided to hand over to the CBI financial frauds at Sri Guru Raghavendra Sahakara Bank, its sister concern Sri Guru Sarvabhauma Souharda Credit Cooperative Ltd and Sri Vasista Credit Souharda Sahakari Ltd.
Rajanna said the government is open to handing over irregularities reported at Kanva to the CBI.
Subramanya urged the government to take “strong measures” towards recovery of loans. “What is the government doing until NPA levels reach 50-55%?” he said. Subramanya also wondered why only cases of banks in Basavanagudi are being referred to the CBI.