Maharashtra Seeks Central Funds to Revive Seven Struggling District Cooperative Banks

Cooperation ‘Manthan’ meeting presided over by Union Home Minister Amit Shah highlights need for financial support, digital empowerment, and stronger centre–state coordination under International Year of Cooperatives 2025

New Delhi : In a key development for Maharashtra’s cooperative sector, the state’s Cooperation Minister, Babasaheb Patil, has formally requested additional central funding to recapitalise seven district central cooperative banks currently facing financial distress. Speaking at the high‑level Cooperation “Manthan” meeting held at the Bharat Mandapam under the chairmanship of Union Home Minister Amit Shah on June 30, Patil urged the Government of India to provide fresh support to these banks—mirroring the infusions made in 2004 and under the centrally sponsored package in 2014—to ensure that rural farmers continue to receive timely credit.

Urgent Need for Reviving Struggling District Banks

Maharashtra operates 31 district central cooperative banks, of which 23 are functioning smoothly. However, seven banks have slipped into financial crisis, putting local credit delivery to farmers at risk. “We have identified these banks as critically undercapitalised,” Patil explained. “Without fresh funding, they cannot sustain lending operations. We have appealed to the Centre to inject sufficient capital so these banks can be restored to health, thereby securing affordable loans for our rural communities and advancing their economic empowerment.”

Cooperation Manthan: Focus on Development, Digitisation, and Policy Reform

The “Manthan” meeting, convened by the Ministry of Cooperation, brought together key stakeholders: Union Cooperation Minister Amit Shah; Ministers of State Krishna Pal Gurjar and Murlidhar Mohol; Secretary Dr. Ashish Kumar Bhutani; and cooperation ministers and secretaries from across India. Under the banner of the International Year of Cooperatives 2025, the discussions delved into four pillars: strengthening cooperative governance, accelerating digital transformation, bolstering primary agricultural credit societies (PACS), and finalising the draft National Cooperative Policy.

In his address, Amit Shah underscored the sector’s vital role as “the backbone of rural India’s development,” urging cooperatives to adopt transparent, efficient practices that prioritise farmers’ and rural citizens’ interests. He called for enhanced centre–state coordination to implement a new cooperative policy that fosters agricultural, dairy, procurement, and retail activities through cooperatives.

Digital Empowerment of 21,000 PACS

Patil highlighted Maharashtra’s progress in digitally empowering its network of 21,000 PACS. “We have initiated the computerisation of these societies to streamline loan processing, record‑keeping, and service delivery,” he said. The state government has issued directives to complete PACS computerisation and strengthen their operational capacity. To facilitate this transition, Patil requested central assistance not only for hardware and software deployment but also to cover the salaries of additional group secretaries and support staff essential for maintaining these digital systems.

Diversification Beyond Credit: Dairy, Procurement, Retail

Moving beyond traditional credit and interest‑collection functions, Maharashtra’s cooperative vision includes expanding into dairy farming, farm produce procurement, consumer retail, and allied businesses. “Our goal is to transform cooperatives into multi‑service enterprises,” Patil explained. “By diversifying revenue streams, cooperatives will generate more income, create rural employment opportunities, and increase their resilience against market fluctuations.”

Community Impact and Economic Empowerment

Patil stressed that revitalised cooperatives will directly impact rural livelihoods. “Secured access to affordable loans will enable farmers to invest in quality seeds, fertilisers, and equipment, boosting agricultural productivity,” he said. Enhanced cooperative procurement will ensure fair prices for farm produce, while cooperative‑led dairy and retail initiatives can offer higher returns and local employment. Together, these efforts will foster inclusive growth and strengthen rural economies.

Roadmap for a National Cooperative Policy

Drawing on insights from state‑level successes and challenges, the Manthan meeting participants engaged in detailed deliberations on the draft National Cooperative Policy. Key proposals include:

• Capital infusion and regulatory relief for distressed cooperative banks.
• Comprehensive digital infrastructure for PACS and central banks.
• Human resource support through funding for group secretaries and technical staff.
• Promotion of value‑added activities such as dairy, food processing, and consumer cooperatives.
• Enhanced governance frameworks to ensure transparency, accountability, and member participation.
• Mechanisms for centre–state collaboration in policy implementation, capacity building, and monitoring.

Babasaheb Patil expressed confidence that the Manthan meeting would serve as a roadmap for the cooperative sector’s revival and expansion. “Under the International Year of Cooperatives 2025, this gathering has laid the foundation for a robust, modernised cooperative movement,” he said. “With coordinated action between the Centre and states, our cooperative institutions will emerge stronger, more self‑reliant, and better equipped to drive rural prosperity.”

— By Team DGIPR