Coop Ordinance flayed

KOCHI: At a time when financial institutions are on a fund-raising drive, the promulgation of the Cooperative Societies Ordinance-2012 has invited severe criticism from stakeholders.The ordinance will adversely affect loan repayment and deposit collection during the end of the financial year, pointed out officials.The ordinance was issued to dissolve the director boards of the district cooperative banks across the state. Already, some of the former board members have approached the High Court against the ordinance seeking to quash the ordinance and issue a directive to the state government and other respondents to refrain from dissolving the director boards and appointing administrators.“The ordinance was issued at a wrong time. Most of the financial transactions, including loan repayment and deposit collection, will be adversely affected by the promulgation of the ordinance. We have formulated special teams for intensified deposit collection. A sudden change in the existing management will unsettle the system. This will not only affect the financial status of institutions, but also the very existence of the banks,” said V P Saseendran, former president of Ernakulam District Cooperative Bank.However, the DCB officials are of the view that the new system will not have much impact. “The financial transactions will be a smooth affair. Earlier in 2002, there was an almost similar situation. The financial status of the banks would have been affected if there was a moratorium or similar action,” said Varghese, general manager of District Cooperative Bank.