LOOTED: Just as Mapusa Urban has been looted by a small coterie, similarly Margao Urban has also been taken for a ride by promoters and directors.

By Arvind Pinto

The Viswanathan Committee has reportedly recommended stricter controls on Urban Cooperative banks. This is very relevant to Goa where most of the urban cooperative banks, including Margao Urban and Mapusa Urban, have closed down.

THE much awaited Viswanathan Committee report on Urban Cooperative Banks is now in the public domain. Although the report is still to be accepted by the Reserve Bank of India (RBI), the report outlines the thinking of the Central Bank on the future of cooperatives in the county. It would be good to look at the main highlights of the report in terms of the cooperatives in Goa
At per the Registrar of Cooperative Societies, there are 4,805 registered banks and cooperative societies in Goa presently. The Cooperative movement took root in Goa, since 1962, the year after the Indian forces annexed what was once a Portuguese colony. At that point of time Goa was primarily agricultural, with fishing another major occupation. The agricultural and fishing marketing cooperatives were instrumental in helping small farmers and fishermen in obtaining financial assistance, as also helped in selling their produce.
About the same time, in several of towns such as Mapusa, Panaji and Margao, the leading citizens and tradesmen banded together to form cooperative banks. In the ‘60s and the ‘70s when the major Indian banks were yet to set foot in Goa, these cooperative banks were both the source of finance for traders of the area as also a depository for the savings of the local people.
During those mid-decades of the last century much of the trade and finance was localized. Further, the markets were small and centered around the individual towns of Mapusa in the north, Ponda in the east, Panaji at the center and Margao in the south. Further, these cooperatives were managed by persons of integrity and being localized there was a common interest in the welfare of local groupings.
However, over some decades, these cooperatives went into the hands of unscrupulous people, who taking advantage of little supervisory authority, have rendered most of these cooperative defunct.

PORTUGUESE GOA

GOA, once under the Portuguese rule, has a colorful history of different kinds of cooperative groupings. The most prominent of these were the village communities, the “ganvkaris” or the “communidades” as were known in Portuguese times and to this day. On April 15, 1961, a few months before the Indian annexation of the State, the then government promulgated the Código des Comunidades (the Code of Communidades) declaring the community as the owners of their community lands.
Sadly, the communidades were once prosperous and vibrant institutions of agricultural community lands, are now dying. Various legislations have usurped their powers to regulate the common village lands. Another interesting institution was the “Fabrica” – these were trade associations – for example, trade association for bakers, tailors and other skilled family trades.
Each of these associations had a set rule for induction of members and regular contributions flowed into their corpus. Further, each association would gather for their annual meetings, where the issues of various trading items were discussed, and these were taken up with the authorities. The Portuguese institutions are now in decay and many have become defunct for want of maintenance.
Recognizing the need to reform the cooperatives, a committee has been set up to by the government to recommend changes to the Goa Cooperative Societies Act, 2001. For government has realized that the cooperative sector has been ignored and there are several of these societies that are guilty of financial frauds and falsification of accounts, leading to the erosion of community funds. The government is searching for ways to bring about transparency in this sector which is vital for the functioning of the rural economy.

AUTONOMY BLUES

GOA has a full-fledged government Department of Cooperatives which is headed by Govind Gaude (minister for cooperatives). There is an IAS officer heading the department and the present Registrar of Cooperative Societies is Arvind Khutkar. The Goa Cooperative Societies Act was enacted in 2001, and covers a whole host of cooperative societies.
Unfortunately, the cooperative sector with its emphasis of autonomy is not well regulated. This can be seen by the fact that several cooperative banks that begun in the 1960s have over the decades closed shop. The Mapusa Urban Cooperative Bank of Goa is now in liquidation, with Anthony Desa, former Chief Secretary of Madhya Pradesh, being appointed as the liquidator.
Similarly, the license of the Madgaon Urban Cooperative Bank has been cancelled with effect from July 2021. The RBI in its decision held that the bank does not have adequate capital and earning prospects and in its present financial position will not be able to pay its present depositors in full. Efforts made to amalgamate this bank with another bank also did not make much headway.

VISWANATHAN COMMITTEE

IN THE light of the present problems the RBI had commissioned the Viswanathan Committee to analyze the urban cooperative banks. This report is now in the public domain. The committee was of the opinion that these urban cooperative banks play an important role in serving different occupational specific needs and can play its role even today.
The committee also noted, that the recent changes initiated by the Reserve Bank of India to bring the management and board of these banks under its control, is an important regulatory decision that will ensure that these banks are supervised and brought with under the regulatory purview of the Central Bank.

DIGITAL FUTURE

DO our cooperatives have a future? In today’s world with the emphasis of digitalization and the opening of the markets beyond the confines of a particular area, cooperatives have a diminished role to play. These institutions played an important role when the world view of our rural sector was limited.
But with the country and the way the world is becoming one immense global market, with communication and money transfer being on the click of a mobile key, our cooperative institutions will have to rethink their purpose and role in the world of tomorrow. Probably many of these institutions have outlived their purpose and would have to reinvent themselves to take on the challenges of the future.