Coop banks object exclusion from Centre’s loan scheme

Rajkot: The cooperative banks of Gujarat have raised strong objection to its exclusion from the Central government’s collateral free Rs 3 lakh crore loan scheme for the MSMEs, small businessmen and non-registered retailers, which was announced last month. This scheme was announced
The National Federation of Urban Co-operative Banks and Credit Societies (NAFCUB) and Gujarat Urban Cooperative Banks Federation (GUCBF) have written a letter to the union finance minister Nirmala Sitharama, expressing their objections.
The NAFCUB president Jyotindra Mehta has argued that one hand the Gujarat government has entrusted the cooperative banks with loan disbursement under the state government’s Atmanirbhar Gujarat Sahay Yojna, but the union government has excluded cooperative banks from the collateral free Rs 3 lakh crore loans scheme under the scheme Guaranteed Emergency Credit Line (GECL) by state-owned National Credit Guarantee Trustee Company (NCGTC). Here the central government will give 100% guarantee to the lender on behalf of the borrower.
Mehta has said that the urban cooperative banks (UCBs) also lend to MSMEs besides other small businesses.
“It is not fair to keep UCBs away from the benefits being offered by the government. When the UCB sector is regulated by RBI in the same manner as the commercial banks, why have the cooperative bansk been excluded,” Mehta questioned.
Talking to TOI Mehta said “Indirectly, the benefits under GECL will not be available to thousands of micro and small enterprises which are existing customers of the UCBs.” There are total 217 UCBs in Gujarat having more then 1,000 branches across the state.