Co-operative Banks

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The co-operative movement in India gained momentum after the attainment of independence. The state began to associate Co-operatives with Economic Growth and development. The Government took certain steps to reorganize and develop Co-operative Movement in terms of the recommendation of the various committees like All India Rural Credit Survey Committee report, 1954 (Gorwala Report), Co-operative Planning Committee report(1946) and Vaikunth 0- Mehta Committee report in 1960 etc.

The Indian planning commission also expressed that cooperation is indispensable instrument of planned economic development in India. More stress was laid on the publication of All India Credit Survey i.e. the Gorwala report published in 1954.

The Reserve bank of India appointed a committee in 1951 under the chairmanship of A.D. Gorwala to assess the source of rural finance and suggest some crucial measures to re-organize rural credit.

The committee surveyed 600 villages in 75 districts and published its report in 1954. The committee found that the rural areas were under the complete control of money-lenders and only 3.5% needs were fulfilled by the Government.

The report revealed extensive indebtness of the farmers and found that each farmer was indebted to minimum from Rs. 100 to Rs. 300 per hectares. The committee also pointed out the ineffectiveness of Co-operative Institutions to supply adequate credit to the farmers.

The Gorwala committee made many important suggestions which came to be known as Integrated Scheme of Rural Credit. The survey committee wanted complete re-organization of agricultural credit. FINDINGS OF THE COMMITTEE:

1. Large part of the co-operative credit went to the big farmers only. 2. There was a big communication gap in villages.
3. People being illiterate, they were needed to be educated in realizing the importance of Co-operative Credit. 4. Only 3.1% credit was provided by societies and remaining 97% was provided by private money lenders. 5. There were no facilities of training the personnel working in the co-operatives. 6. Necessary Infrastructures for Co-operatives was required which was not existing. RECOMMENDATIONS OF THE COMMITTEE:

1. State partnership: It was recommended that the state should participate in the Co-operative Movement at all levels. Only financial help is not sufficient but the state should enter into partnership for effective rural development. 2. Loans against Crops: Crop loan should be given by the societies in suitable installments. There should be adequate supervision and efficient management of recovery. 3. Long term operation fund: The RBI should constitute a special fund, known as National Agricultural Long Term Credit Fund with initial contribution of Rs. 10 crores for giving to the state Government for direct participation in Co-operative activities. 4. Linking of credit with marketing: The committee suggested a close link between Primary Village Credit Societies and marketing societies. * The primary societies should finance the member on condition that in return he should sell his product to the marketing society. For this purpose the committee recommended establishment of Primary Marketing Societies at Taluka Level. 5. Large sized societies: Another important feature of the integrated scheme was the establishment of credit societies of large size, which will be viable and easily serve a cluster of village effectively. 6. Training facilities: Strong emphasis was laid on extending sufficient training facilities to the staff working at various levels. The training should be organized under the guidance of Central Government. 7. Effective Supervision and Audit Inspection: The committee recommended for...
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