Chapter 3 Banking Development: India, Maharashtra and Thane
3. Introduction: 54
3.1 Urban Cooperative Banks (UCB) 56
3.2 Brief History of Urban Cooperative Banks in India 58
3.2.1 The Beginning 59
3.2.2 Genesis and Architecture of Urban Cooperative Banks 61
3.2.3 Phase I (1904-1966): = 61
3.2.4 Phase II (1966-93) 64
3.2.5 Phase III: Post 1993 - Scenario: 68
3.3 Structure, Growth and Significance of Cooperatives 72
3.4 Urban Cooperative Banks (Urban Cooperative Banks) & Their Role in
Indian Banking 73
3.5 Review of Thane district of Maharashtra 75
3.6 Cooperative movement in Maharashtra with special reference to Thane
District: 94
3.7 Development of Banking system in India with Special Reference to Public
Sector Banks 150
3.8 Summary: 168 Chapter 3 Banking Development: India, Mahiaraslitra and Thane
3. Introduction:
Origin of cooperative thought in hidia is very old. In ancient times, there were cooperative institutions lilce Gramsabha and Jatti. In India the movement was formalised in 1904 with introduction of Cooperative Societies Act, 1904. The main objectives of the act were limited to Primary Agricultural Cooperative
Societies (PACs) only:
• To provide for the constitution an>u control of cooperative credit
societies by enactment specially adopted to their organization and
aims.
• To confer special statutory privileges and concessions upon them
with a view to encouraging their formation and assisting their
operation and,
• To ensure that they will be cooperatives in names as well as in
spirit .
'Cooperation' is worldwide nio\ement: it was introduced in India in llie early years of last century in the wake of famines which had resulted in economic hardship and alarming increase in the indebtedness of the farmers to the moneylenders. It was introduced in India mainly as a defensive organization for dealing with problems of rural indebtedness. The 1904 act was replaced by a more comprehensive Act. The federal character of cooperative society into banking unions has origin in the Cooperative Society Act, 1912. Thereafter states also enacted Acts to promote cooperatives.
54 Phenomenal growth in the number and activities of cooperative societies took place between the years 1906 and 1911. After the modification of the Act 1912, this gave legal recognition for the first time to distribute to societies and to various forms of central organisations. The new act incorporated changes such abolishing the distinction between rural and urban societies and substituting for it the classification of unlimited and limited liability societies."
Table 3.1 Objectives of Cooperatives
Sr.No State Objective Haryaiia and Andhra 1 Promotion of economic interest of members. Pradesh Maliaraslitra and Tamil Promotion of economic interest and general 2 Nadu welfare of members. Promotion of economic interest and social 3 Punjab standard of members. West Bengal, Bihar and 4 Promotion of economic interest of members. Gujarat Promotion of economic interest and the objective 5 Orissa and Rajastlian not to be inconsistent with social justice Promotion of economic interest of members and 6 Kerala public. Assam. Karnataka and Promotion of economic interest and general 7 Uttar Pradesh welfare of members and public. Sources: compiled from State Cooperative Society Acts of respective states
D5 3.1 Urban Cooperative Banks (UCB)
Cooperative credit structure in India is characterised by a plethora of institutional segments. Leaving aside the agricultural cooperative credit institutions, in the urban cooperative credit fold itself, there are 3 types of institutions recognised by the Banking Regulation Act 1949 (As Applicable to
Cooperative Societies). As discussed elsewhere in the Report, these are:
(i) Primary credit societies, who virtually function like banks, but
whose networth is less than Rs.l lakh: who are not members of the
payment system and to whom deposit insurance is not extended,
(ii) Primary cooperative banks, popularly called Urban Cooperative
Banks, whose net worth is Rs.l lakh and above; who are recognised as
banks, are members of payment system and who enjoy deposit
insurance
(iii) Cooperative credit societies, who confme their activities to their
members alone and who do not perform banking functions'*.
Under the provisions of Section 5(CCII) of Banking Regulation Act, 1949
(AACS), a cooperative credit society is defined as a cooperative society, "the primary object of which is to provide financial accommodation to its members and includes a cooperative land mortgage bank." These types of institutions are thrift societies. The distinction between a primary credit society and a cooperative credit society is with reference to their nature of business. The primary object or principal business of a primary credit society is the transaction of banking business. When its paid up capital and reserves attain
56 the level of Rs.l lakh, a primary credit society automatically becomes a primary cooperative bank. However, even after a primary credit society becomes a cooperative bank; it has to apply to RBI for a licence to carry on banking business. But it can carry on banking business until it is granted a licence or notified that a licence cannot be granted to it .
Urban Cooperative Banks provide banking and credit facilities to urban and semi urban population. As of March, 2013 1606 Scheduled Urban Cooperative
Banks are functioning in the India. They mobilize deposits from the public and extend credit facilities for specified purposes. Their lending operations include provision of credit facilities to small traders, artisans and persons belonging to low and middle income group for purposes ranging from housing, business, education, consumer and other non-farm sector activities. Credit cooperatives are the oldest and most numerous of all the types of cooperatives in India. The cooperative credit institutions in the country may be broadly classified into urban credit cooperatives and rural credit cooperatives. There are about 2090 urban credit cooperatives and these societies together constitute for about 10 percent of the aggregate banking business and therefore regarded as an important segment of the banking system. The Co-operative Banks function in
India on State Levels. Most of the Rural Co-operative banks function on Three-
Tier and the Urban banks function on Two-Tier. At the National Level there is
NABARD to organise the Agricultural Co-operatives. Also there is National
Co-operative Union of India, as an apex insdtution at National Level. The
Reserve Bank of India controls and regulates the Co-operative Banks that fall
57 under the Banking Regulation Act. The basic difference between cooperative society and cooperative bank is, co-operative societies are usually having a limited amount of capital (both deposits and share capital), and when it increases beyond a limit the society becomes a co-operative bank.
3.2 Brief History of Urban Cooperative Banks in India
The term Urban Co-operative Banks, though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally centred around communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably.
The origins of the urban cooperative banking movement in India can be traced to the close of nineteenth century when, inspired by the success of the experiments related to the cooperative movement in Britain and the cooperative credit movement in Germany such societies were set up in India. Cooperative societies are based on the principles of cooperation, - mutual help, democratic decision making and open membership. Cooperatives represented a new and alternative approach to organisation as against proprietary firms, partnership firms and joint stock companies which represent the dominant form of commercial omanisation.
58 3.2.1 The Beginning
The first known mutual aid society in India was probably the 'Anyonya
Sahakari Mandali' organised in the erstwhile princely State of Baroda in 1889 under the guidance of Vithal Laxman also known as Bhausaheb Kavthekar.
Urban co-operative credit societies, in their formative phase came to be organised on a community basis to meet the consumption oriented credit needs of their members. Salaiy earners" societies inculcating habits of thrift and self help .olayed a significant role in popularising the movement, especially amongst the middle class as well as organized labour. From its origins then to today, the thrust of Urban Cooperative Banks, historically, has been to mobilise savings from the middle and low income urban groups and purvey credit to their members - many of which belonged to weaker sections.
The enactment of Cooperative Credit Societies Act, 1904, however, gave the real impetus to the movement. The tn-st urban cooperative credit society was registered in Canjeevaram (Kanjivaram) in the erstwhile Madras province in
October, 1904. Amongst the prominent credit societies were the Pioneer Urban in Bombay (November 11. 1905), the No.l Military Accounts Mutual Help Co operative Credit Society in Poona {.lanuary 9, 1906). Cosmos in Poona
(January 18, 1906), Gokak Urban (February 15, 1906) and Belgaum Pioneer
(February 23, 1906) in the Belgaum district, the Kanakavli-Math Co-operative
Credit Society and the Varavadc Weavers" Urban Credit Society (March 13.
1906) in the South Ratnagiri (now Sindhudurg) district. The most prominent amongst the early credit societies was the Bombay Urban Co-operative Credit
59 Society, sponsored by Vithaldas Thackersey and Lallubhai Samaldas established on January 23, 1906.
The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to broad basing it to enable organisation of non-credit societies. The Maclagan
Committee of 1915 was appointed to review their performance and suggest measures for strengthening them. The committee observed that such institutions were eminently suited to cater to the needs of the lower and middle income strata of society and would inculcate the principles of banking amongst the middle classes. The committee also felt that the urban cooperative credit movement was more viable than agricultural credit societies. The recommendations of the Committee went a long way in establishing the urban cooperative credit movement in its own right.
There was the general realization that urban banks have an important role to play in economic upliftment. This was asserted by a host of committees. The
Indian Central Banking Enquiry Committee (1931) felt that urban banks have a duty to help the small business and middle class people. The Mehta-Bhansali
Committee (1939), recommended that those societies which had fulfilled the criteria of banking should be allowed to work as banks and recommended an
Association for these banks. The Co-operative Planning Committee (1946) went on record to say that urban banks have been the best agencies for small people in whom Joint stock banks are not generally interested. The Rural
Banking Enquiry Committee (1950), impressed by the low cost of
60 establishment and operations recommended the establishment of such banks even in places smaller than taluka towns.
The first study of Urban Co-operative Banks was taken up by RBI in the year
1950-51 in the form of the Rural Banking Enquiry Committee (1950) (headed by Sir Purshotamdas Thakurdas). The Report acknowledged the widespread and financially sound framework of urban co-operative banks; emphasized the need to establish primary urban cooperative banks in new centres and suggested that State Governments lend active support to their development. In
1963, Varde Committee recommended that such banks should be organised at all Urban Centres with a population of 1 lakh or more and not by any single community or caste. The committee introduced the concept of minimum capital requirement and the criteria of population for defining the urban centre where
Urban Cooperative Banks were incorporated.
3.2.2 Genesis and Architecture of Urban Cooperative Banks
The Cooperative Credit Movement in modern India, curiously, is a state initiated movement. The then State regime, though it had an unbending political dispensation towards native subjects, had taken a lead to create an institutional credit structure essentially to cater to the needs of farmers and lower income groups.
3.2.3 Phase I (1904-1966):
Inspired by the success of urban cooperative credit movement in Germany and
Italy, the first mutual aid society 'ANYONYA SAHAKARI MANDALl' was
61 organised in the then princely State of Baroda in 1889 under the guidance of
Late Shri Vithal Laxman Kavthekar. The enactment of Cooperative Credit
Societies Act, 1904, however, gave the real impetus to the movement as the first urban cooperative credit society was registered in Canjeevaram town in the then Madras province in October, 1904. Thereafter, a few more societies were organised in Madras and Bombay provinces.
In the formative phase, urban cooperative credit societies came to be organised on community basis and their lending operations were contlned to meeting the consumption oriented credit needs of their members. The term 'bank' was very loosely used by many societies in the initial phase. Many urban banks which were organised in the early part of this century were essentially credit societies but later converted themselves into Urban Cooperative Banks. Many urban credit societies which were not engaged in any banking functions also used the v/ord 'bank' or 'banker'. There was no well defined concept of urban cooperative bank. It was the Joint Reorganisation Committee popularly known as Mehta Bhansali Committee (1939) in the then Bombay Province, which, for the first time, made an attempt to define an urban cooperative bank. It defined a credit society as an Urban Cooperative Bank (UCB) whose paid up share capital was Rs.20000 or more and was accepting deposits of money on current accounts or otherwise subject to withdrawals by cheque, draft or order. In
Madras province, urban cooperative credit societies accepting current account deposits and maintaining certain amount of liquid resources, as prescribed by
Registrar of Cooperative Societies, had come to be known as Urban
62 Cooperative Banks (Urban Cooperative Banks), irrespective of size of their share capital. Subsequently, in 1966, when banking laws were made applicable to cooperative banks, provisions of section 5(CCV) of Banking Regulation Act,
1949 [ As Applicable to Cooperative Societies (AACS) ] defined an Urban
Cooperative Bank, as a primary cooperative bank other than a primary agricultural credit society:
(i) the primary object of which is the transaction of banking business;
(ii)The paid up share capital and reserves of which are not less than Rs.l
lakli and
(iii) The by-laws of which do not permit admission of any other
cooperative society as a member.
With the economic boom ignited by 11"'' World War, the urban banking sector received tremendous impetus and started diversifying its credit portfolio, branching out from meeting traditional consumption oriented credit needs into catering to the needs of artisans, small businessmen and small traders. Various
Committees and Study Groups, like the Central Banking Enquiry Committee
(1931), the Cooperative Planning Committee (1946) and also the Banking
Commission (1969) popularly known as Saraiya Committee (both the committees chaired by R. G. Saraiya), Varde Committee (1963), the Study
Group on Credit Cooperatives in Non-Agricultural sector (1963), and Working
Group on Industrial Financing through Cooperative banks (1968) have commended the working of Urban Cooperative Banks in extending support to the micro agencies, to whom the commercial banking sector was quite wary of
63 lending. Interestingly, the survey made by RBI in 1958-59, for assessing the financial pattern of Urban Cooperative Banks and their role in financing Small
Scale Industries, revealed that notwithstanding absence of state support to urban banking sector (unlike its counterpart viz. in the Agricultural
Cooperative Credit sector), the UCB sector, as a whole registered a fairly good rate of progress. As at the end of financial year 1948-49, the number of Urban
Cooperative Banks stood at 815 and rose to become 1106 by the end of financial year 1966-67. During this period, the deposits held by UCB sector rose from Rs.l7 crores to Rs.l53 crores, registering a growth of 800% [Urban
Cooperative banks were brought under the purview of B.R. Act, effective from
1 March, 1966].
3.2.4 Phase II (1966-93)
During this period, the demand for extension of deposit insurance was gaining momentum on account of significant increase in the operations of Urban
Cooperative Banks and their volume of deposits and more particularly in the context of sad experience of Palai Central Bank failure. As extension of deposit insurance to cooperative banking sector presupposes some semblance of
Reserve Bank control over them, some provisions of B.R. Act, 1949 were made applicable to Urban Cooperative banks in 1966 after an intense debate among
State Governments, Government of India and RBI. This was a landmark in the evolution of urban banking movement in India. Consequently, the cooperative banks came under duality of control. The banking related functions such as licensing, branch licensing, area of operation, exposure norms, interest rates
64 etc. are governed by RBI directives and regulations; incorporation and registration of cooperative banks, audit, management, liquidation, winding up, amalgamation etc., these functions are governed by the State Governments by virtue of powers conferred on them by the respective State Cooperative
Societies Acts.
It is interesting to note that the Banking Regulation Act does not recognise the term 'urban cooperative bank' and defines it as a " primary cooperative bank".
The word "primary" is used to denote that the bank performs the role of a primary unit in a 3-tier cooperative credit structure. By this definition, the
Urban Cooperative Banks were made an integral part of the well developed 3- tier cooperative credit structure which was developed to cater to the needs of rural India. The Urban Cooperative Banks, by implication, have to be affiliated to District Central Cooperative Bank (DCCB) at district level and to State
Cooperative Bank (SCB) at apex level and these banks, in turn, were supposed to help, nurse and guide the Urban Cooperative Banks. Historically, Urban
Cooperative Banks were organised in semi-urban, urban and metropolitan centres. This was the reason why they came to be popularly known as urban cooperative banks. Between 1966-93, the resources mobilised by way of deposits by the Urban Cooperative Banks have registered a phenomenal growth. From a meagre Rs.l53 crores as at the end of June 1967, they rose to
Rs.13531 crores by the end of March 1993. The credit base surged from Rs.l67 crores to Rs. 10132 crores during this period.
65 A class of urban cooperative banks, which are popularly called, Salary Earners'
Banks also emerged as a matter of course and had their own place in the urban cooperative banking system over the years. These banks are essentially thrift societies set up by employees of governmental departments/ PSUs/large establishments for mutual help on the principles of cooperation. These societies also started using the word 'bank' and were accepting deposits from members of public. Since Reserve Bank of India did not find any rationale for their continuing as banking entities, as they were essentially thrift societies, they were advised to go out of the purview of the B.R. Act, after returning the deposits to non-members. As a result. 599 salary earners banks went outside the purview of the B.R. Act, during the period 1 March, 1966 to 30 June, 1977 by converting themselves in to cooperative credit societies. Marathe Committee had also endorsed this view. As on 31 March, 1999, there were 90 salary earners banks. Yet another interesting feature of the history of urban cooperative banking movement is that despite the exit of so many salary earners banks from the ambit of B.R. Act. the number of Urban Cooperative
Banks increased from 403 (excluding salary earners banks) to 1023 during 1
March 1966 and 30 June 1977. This increase in number of Urban Cooperative
Banks was not on account of a liberal licensing policy stance of RBI but an offshoot of statute induced expansion i.e., automatic conversion of Primary
Credit Societies in to Urban Cooperative Banks. The only difference between a primary credit society and an urban cooperative bank is the level of owned funds. If the owned funds of primary credit society reach Rs.l lakh,
66 automatically, it has to apply to RBI for a licence to carry on banking business.
If a primary credit society, after attaining Rs.l lakh of owned funds, does not meet the criteria laid down by the RBI, it can carry on banking business till its licence application is rejected by RBI. Due to this peculiar statutory dispensation, a large number of primary credit societies had necessarily to be brought under the ambit of B.R. Act. RBI has, therefore, decided in 1978 that
Registrar of Cooperative Societies should not register any new primary credit society the object of which was to caiTy on banking business.
The period between 1966-1993 can be termed as an over regulated regime. The licensing policy of RBI was too restrictive as it was governed by the dictum
"one district - one bank", notwithstanding the cooperative initiative demonstrated by the co-operators. Urban Cooperative Banks were also not allowed to expand beyond municipal limits. There was an embargo on their entry into rural areas and tmancing agricultural operations. Branch licensing policy was linked to the "planned expansion of branches". There were also restrictions on deployment of Urban Cooperative Banks' surplus resources outside the cooperative fold. Growth of urban banking sector was confined to the states of Maharashtra, Karnataka, Gujarat and Tamil Nadu where the cooperative movement had already taken strong roots. The regional disparities in the gi-owth of urban cooperative movement were mostly due to strong cooperative initiative exhibited in these states and absence of similar cooperative leadership in other states. But with liberal licensing policy stance
67 of RBI, from May 1993, some states such as Madhya Pradesh, Andhra Pradesh and a few other States have shown signs of urban banking growth.
3.2.5 Phase III: Post 1993 - Scenario:
The year 1993 was a watershed in the annals of urban cooperative banking
movement. After Narasimham Committee (Report I) addressed the ills of
banking system in 1991, and suggested a road map for liberalising the banking
sector, a similar need was also felt to look de novo at the regulatory issues
relating to Urban Cooperative Banks. Accordingly, RBI appointed the Marathe
Committee in 1991 to address these issues. Recommendations of this
Committee were quite far reaching, particularly, in the realm of new bank
licensing, branch licensing and area of operation etc. Essentially, Marathe
Committee suggested to dispense with the "one district-one bank" licensing
policy and recommended organisation of banks based on the need for an
institution and potential for a bank to mobilise deposits and purveying of credit.
It also felt that existence of commercial banking network should not prevent
the cooperative initiative. RBI accepted these recommendations and had come
out with its new policy approach in May 1993, Between May 1993, when the
revised policy was put in place and 31 March 1999. RBI has issued as many as
537 licenses for setting up new banks. The liberalised branch licensing policy's
stress was more on bank's inherent financial strength rather than assessing the
need for a branch and its viability in a given centre. As a result, the branch
network of Urban Cooperative Banks increased from 3691 as at the end of
March 1993. to 6619 by 31 March, 1999. Urban cooperative banks were also
68 allowed to extend their area of operation to the entire district without specific approval from RBI and banks, with deposits of Rs.50 crores and above, were permitted to cross the borders of the States of their registration. Banks complying with certain norms can now also open extension counters without
RBI permission.
RBI had also appointed a Working Group under the Chairmanship of Shri
Uday M. Chitale in December 1995 to review the existing audit systems of
Urban Cooperative Banks. With a view to instil professionalism m the audit of
Urban Cooperative Banks, the Working Group suggested that audit of Urban
Cooperative Banks, with deposits of Rs.25 crores and above, be conducted by
Chartered Accountants, thus, ending the monopoly of State Government's audit of Urban Cooperative Banks. It has suggested a standard format of audit for all the states. The Working Group also suggested revised audit rating model for
Urban Cooperative Banks. Regrettably, none of the states, not even the cooperatively advanced states, has implemented the recommendations of
Chitale Working Group. Besides, easing regulatory restrictions, a number of policy pronouncements were made in the operational sphere too. Urban
Cooperative Banks can now invest 10% of their surplus funds outside cooperative fold. Ceiling on quantum of advances to nominal members has been increased substantially and scheduled Urban Cooperative Banks have been allowed to do merchant banking/forex operations. Effective- from
November 1996, urban cooperative banks have been given freedom to finance direct agricultural operations. The interest rates on deposits of urban banks
69 have been deregulated from 21 October, 1997. They can also install ATMs without prior approval of RBI. Thus, in the post Marathe Committee dispensation, there was a paradigm shift in RBI's regulatory approach. An excessively controlled regime gave way to a thoroughly liberalised dispensation. The shift in RBI policy on Urban Cooperative Banks was a natural corollary of its policy stance on financial sector. Strangely, State
Governments who are co-regulators have not brought out any significant parallel reforms in tune with liberalisation process set in by RBI. The notable exception is Andhra Pradesh which enacted the Mutually Aided Cooperative
Societies Act, 1995 freeing the cooperative societies, registered under this Act, from Government control as long as they do not solicit share capital or seek guarantees from State Government .
Similarly, 97" Constitution Amendment Act, 2011 relating to the co-operatives provided for: right to form cooperatives as fundamental right, reservation of 1 seat for SC/ST and 2 seats for women on board,setting up of an agency to oversee elections, incorporation, regulation and winding up of cooperative societies based on the principles of voluntary formation, specifying the maximum number of directors of a co-operative society to be not exceeding twenty-one members, a fixed term of five years in respect of the elected members of the board, independent professional audit etc. However, as far as implications of the amendment are concerned, it is to be noted that it made obligatory for the states to ensure autonomy of cooperatives and regular elections under the supervision of autonomous authorities. Further, it is also
70 feared that the amendment fails to control vested interest of political leaders.
There is the possibility of the managerial element overriding the concerns of the members and lack of sufficient space for an effective state intervention whenever required. The act has been declared null and void in some of the states like Gujarat on the grounds that the cooperation is a subject of state list and central government has no right to make laws in this regard.
As per the guidelines of the 97"" amendment act, Maharashtra government has amended Maharashtra Co-Op. Societies Act and provides for: Concept of active members and Power to expel Non-Active members, Legal Provision for education & training to groom fresh leaders. Resolution of internal differences through "Grievance Redressal Committee" consisting of three senior and impartial members of the Society, Duty of auditors, Registrar etc. to pinpoint responsibility for fraud and register complaints. State Election Authority to monitor elections closely, holding of Annual General Meeting by 30th of
September each year, Electronic Form of book keeping and record keeping etc.
The amendment especially made formation of cooperative, a fundamental right.
However, in many states the amendment was opposed as a interference to the state list. In Gujarat, High Court put stay on the amendment.
71 3.3 Structure, Growth and Significance of Cooperatives'
Table 3.2 Structure of Cooperative Banking (March 2013)
Asst Share Institution Number No of br. (%)
A. Rural Cooperative Credit Structure 93550 112891 67
(i) Short Temi (ST) 92833 111090 58
•State Coop Banks (StCB) 31 938 15
• District Central Coop Banks (DCCB) 370 12928 29
• Primary Agri Coop Societies (PACS) 92432 92432 14
(ii) Long Term (1,1) 717 1800 8.3
• State Coop A\gri and Rural Dcv Franks 20 1104 4.4
• Primary Coop Agri and Rural Dcv Banks 697 697 3.9
B. Urban Cooperative Banks 1606 5660 33
(i) Sclieduled 51 3565 29
(ii) Non-scheduled 1555 2095 4
Source: Report on Trends and Progress of Ban king in Inc ia.
72 Structure of Cooperative Banking in India.1 0 Figure 3.1 Structure of Cooperative Banking in India
Coopeiatives I :
Non- ciedit
I Produce! ^011 sum 1 Coop.Baiiks Others 'coop ers' (Primar>' Coop.Banks- PCB)
T~—I I Non- I Agi'icultural I aaicultural
3.4 Urban Cooperative Banks & Their Role in Indian Banking
Urban Cooperative Banks play an important role in providing credit to urban & semi-urban areas of the country. Urban Cooperative Banks mobilise savings from middle and lower income groups. They extend credits to small borrowers as well as weaker sections of the society. Urban Cooperative Banks, also known as primary cooperative banks, are similar to credit unions seen in other countries. Indian households save 28 percent of their disposable income, but invest only half of these savings in bank deposits and other financial assets.
Nationalised Banks, as a group, accounted for 47.7 per cent of the aggregate deposits. The share of Other Scheduled Commercial Banks, Foreign Banks and
Regional Rural Banks in aggregate deposits was 21.2 per cent, 5.9 per cent and
73 3.0 per cent, respectively. As regards gross bank credit, Nationalised Banks held the maximum share of 47.0 per cent in the total bank credit followed by
State Bank of India and its Associates at 23.2 per cent and Other Scheduled
Commercial Banks at 20.6 per cent. Foreign Banks and Regional Rural Banks had relatively lower share in the total bank credit at 6.7 per cent and 2.5 per cent, respectively. A small but substantial share of total deposits is covered by
Urban Cooperative Banks in India. Their market share increased from 3.3% in
1990-91 to the high of 6.6% in 1999-2000. Though it declined after that, it contributed around 5% of total deposits in 2005-06. Graph 1 shows the percentage market share of various bank groups where commercial bank group play a lead role with almost 85% market share.
Table 3.3 Distribution of Urban Cooperative Banks in India (As On 31.3.2013)
Scheduled Urban Cooperative Bank.s (3% 51 ofTotal)
Non-Scheduled Urban Cooperative Banks 1555 (97% ofTotal)
Total Urban Cooperative Banks 1606
Tier-I Urban Cooperative Banks (84 "'o of 1194 Total Urban Cooperative l^anks)
Tier-II Urban Cooperative Banks (16 % 441 ofTotal Urban Cooperative Banks)
Source: Urban Banks Department, RBL Mumbai.
74 3.5 Review of Thane district of Maharashtra
In this particular part a brief review of the Thane district has been given in which different important points viz; geography, population, transportation, infrstructure, industries, banking structures, cooperative setup etc. along with an over-view of Maharashtra state have been studied.
A. Overview of the Maharashtra State
Maharashtra occupies the western and central part of the country and has a long coastline stretching nearly 720 kilometers along the Arabian Sea. Ranges of
Sahyadri Mountain provide a physical backbone to the State on the west, while the Satpuda hills along the north and Bhamragad-Gadchiroli-Gaikhuri ranges on the east serve as natural borders. Maharashtra is the second largest state in hidia both in terms of population and geographical area (3.08 lakh sq. km.).
The State has a population of around 11.24 crore (2011 Census) which is 9.4 per cent of the total population of India. The State is highly urbanised with 42 per cent people residing in urban areas. The State has 35 districts which are divided into six revenue divisions viz. Konkan, Pune, Nashik. Aurangabad,
Amravati and Nagpur for administrative purposes. The State has a long tradition of having statutory bodies for planning at the district. For local self- governance in rural areas, there are 33 Zilla Parishads. 355 Panchayat Samitis and 27.993 Gram Panchayats. The urban areas are governed through 23
Municipal Corporations, 222 Municipal Councils, 4 Nagar Panchayats and 7
Cantonment Boards. Mumbai, the capital of Maharashtra and the financial capital of India, houses the headquarter of most of the major corporatcs &
75 financial institutions. India's main stock exchanges & capital market and commodity exchanges are located in Mumbai .
B. Profile of Thane District
Thane district is one among a few industrialized districts of Maharashtra state.
According to census 2011, Thane is the second highly populated district of the state with area of 9558 kms which comprises of 3.1% of the total state land area. On the east of the Thane is Sahyadri mountain range and on the west there is Arabian Sea. Similarly, on the north of the district lies Gujarat state while on the south of the district is Mumbai, the economic capital of India. Thane,
Kalyan, Ulhasnagar, Ambernath, Bhiwandi. Vasai and Palghar are highly industrialised Talukas of the district. However, Shahpur, Murbad, Wada,
Jawhar. Mokhada, Dahanu, Vikramgad and Talasari are tribal Talukas.
From the point view of industrial development , Thane district ranks third in the state. More than half part of the disu-icl is found socio-economically developed becuse of this industrial development. There are 10 industrial zones developed by the Maharashtra State Industrial Development Corporation in the district. There are coccentration of the industries in the southern and western parts of the district.
C. Brief history of Thane district
Throughout recorded history the district has left its mark under various names.
However, its present-day name is said to be derived from Sthan or Sthanaka. the capital of the Shilahara kings of Konkan. The Portuguese came to Thane about 1530 and ruled for over 200 years till 1739. Thane was then known as
76 Cacabe de Tana. Work on the Thane Fort began in 1730.
The Marathas, who conquered Bassein and Thane in 1737 and 1739, held sway over the region till 1784, when the British captured thr Fort and ruled Thane, then also called Tana. They made it the headquarter of the district administration with a district collector stationed in Thane. The Thane Muncipal
Council was formed in 1863 when the city had a population of 9000 souls.
After independence. Thane grew slowly and attained the status of an industrial town in the 60's and 70's. There was also a corresponding growth in trade, transport and construction activities, which picked up tremendously in the 80's.
The 90's have seen the city burgeoning ahead, with great stride in construction and housing. The population has also increased manifold and Thane now occupies pride of place as a prime suburb and is all set to make its mark in the next millennium.
D. Geographical Area
Thane is located to the North of Mumbai. Although being a district place, the city has always been shadowed by the existence of the metropolis just on its outskirts. The total geographical area of the district is 9,33,700 hectares. It is located between 18 ° 42' to 20 ° 20' north latitudes and 72 ° 45' to 73 ° 48' East
Longitude. The city is divided by Thane Creek, a stream of water from the
Arabian Sea. Two road bridges & one rail bridge connect the two parts of the city.
E. Boundaries
This district lies in the north-west of Maharashtra State. Nashik and
77 Ahmadnagar districts are to the east of Thane district, Raigad district to the south and Pune district to the south-east, Mumbai suburban district is to the south-west. The Arabian Sea is to the west, whereas Gujarat state and Dadra and Nagar Haveh territory are to the north of this district.
F. Land Forms
There are different land forms in Thane District. The western part of the district is a plain whereas Tunger, Jivadhan, Tandulwadi, Takinak, etc., are hills. The
Sahyadri mountain is on the eastern boundary of the district. The Jawhar-
Mokhade plateau is in the north-eastem part of the district.
The different land forms in a region constitute its physical set-up. If we consider the physical set-up of Thane District, we see that there are three physical divisions.
G. The Mountainous Region of the Sahyadris:-
The Sahyadri ranges contitute the eastern part of the district. Parts of Murbad,
Shahapur, Jawhar, Mokhade and Vikramgad talukas form this region.
a. The River Basins -
The central part of this district is mostly a low-lying area. Kalyan, Bhiwandi,
Wada. Dahanu, Ulhasnagar, Ambarnath and Talasari Talukas form this region.
b. Coastal Region:
The western part of the district is a coastal plain. Dahanu, Palghar, Vasai, and
Thane talukas make up this region.
Roads going eastwards towards Nashik district pass through Shirghat and
Thalghat situated in the district. Naneghat is on the border of Pune district
78 towards the south-east. It has been an important road for transportation right from the early days. The Arnala fort in Thane district is well-known.
c. Rivers:
Vaitarna and Ulhas are the two main rivers in Thane district.
Vaitarna River:
This river flows across Shahapur, Wada and Palghar talukas and meets the
Arabian Sea. Dahreja, Surya and Tansa are the tributaries of the Vaitarna. The
Datiware creek in Palghar taluka is near the mouth of the Vaitarna river.
Ulhas River:
The river Ulhas enters Thane district through the neighbouring Raigad distrct.
This river has its source in the Borghat and meets the Arabian Sea at the Vasai creek. Barbi, Bhatsai are its tributaries. The Ulhas river branches out in two directions near Thane. The western distributary of this river flows into the
Vasai creek and the southern distributary flows into the Thane creek.
H. Climate:
The Arabian Sea is to the west of Thane district. That is why the climate of the district is generally hot and humid. The mountainous region receives more rainfall than the coastal region, .lawhar, Wada, Shahapur, Murbad, Vikramgad and Thane talukas receive more rain than the other talukas.
A map of thane district is given in tig. below:
79 Figure 3.2 Map of Thane District
Talasari
Dahanu Jawhar
S Mokhada Palghar
Shahapur
H Vasal Bhiwandi
Kaiyan Murbad Ulhasnagar An^bernath liBiine
Thane Sub Division Kaiyan Sub Division Ulhasnagar Sub Division Vasai Sub Division Bhiwandi Sub Division Palghar Sub Division Dahanu Sub Division Wada Sub Division awhar Sub Division
I. Water Supply:
Wells, lakes and rivers are the sources of water supply in Thane district. There
are more wells in Vasai. Palghar and Dahanu areas. There are bunds on the
Surya. Vandri, Pelhar, Ulhas and Murbadi rivers. There is a dam across the
Vandri river in Palghar taluka. The important dams in the district are Vaitarna,
Tansa and Bhatsa where there are huge reservoirs. Water supply to the city of
Mumbai is made from some of the lakes in Thane district. Water from the
80 rivers Ulhas and Barbi is supplied to the industrial belt in the south and to New
Mumbai.
J. Natural Wealth: a) Forest
There are forests in the hilly region of Thane district. There are thick forests in
Dahanu, Shahpur, Palghar, Jawhar, Wada and Mokhade talukas. Sissoo, teak, ain, khair, palas, pangara trees grow in these forests. Other trees such as banyan, mango, tamarind, coconut are also found here. Casuarina and eucalyptus trees have been planted on the sea-coast. The Tansa sanctuary is in this district. Wc find wild animals like leopards and sambhars in this sanctuaiy. b) Mineral
Bauxite deposits are found in the Tungar hills in Vasai taluka.
Sand which is useful in the constmction of houses is found in the bed of the
Ulhas river in the Thane creek. Mumbra is a port where sand is obtained.
Black rock called basalt is found in Kalyan, Ambarnath. Vasai and Thane talukas. It is used in the construction of houses and roads. c) Marine
Fishing is carried on along the sea coast. Uttan. Arnala, Mahim, Satpati,
Chinchani, Dahanu, etc., are ports famous for fishing.
Vasai High mineral oilfield is located in the sea.
There are many salt pans at Vasai, Bhaindar. Dahanu and other places.
Conches and shells are also obtained from the sea.
K. Industries: From the point of view of industries, Thane is an important district of
Maharashtra state. There are many large scale and small scale industries in the district.
There are different types of textile industries at Thane and in the neighbouring areas. There are cotton and woollen textile mills at Thane. Silk yam and cloth are made in Bhiwandi. There are a large number of power looms at Bhiwandi.
There is a factory making artificial silk (yarn) at Mohane.
There are many factories manufacturing various articles from iron and steel in the Thane-Belapur belt. There are factories manufacturing different types of machines and other metal equipment at Thane. Kalyan and Dahanu each have a factory where spare parts of motor-cars are manufactured. There are pharmaceutical and chemical factories at Ambarnath, Bhaindar and Thane.
There are paint and chemical factories at Thane and Bhaindar. There is a paper mill too at Thane. Plastic goods are manufactured at Ulhasnagar and Bhaindar.
There are matchbox factories at Ambarnath and Thane. There are canning factories for the canning of various types of foodstuff, fruit juice and slices at well as beverage factories at Thane and Kalyan. There is a big milk project at
Dapchari, Saralgaon and Pali have milk chilling centres. There are rice mills at
Kalyan, Bhiwandi and Dahanu. Bangle making factories are found in Tarapur and Chinchani areas.
The tlrst nuclear power plant in India was set up at Tarapur in Thane district.
In addition, there are a number of factories manufacturing electrical equipment at Thane and Ulhasnagar. There are industrial estates at Ambamath, Kalyan, Bhiwandi, Thane-Belapur,
Badlapur, Mira, Tarapur and Murbad in Thane district.
L. Trade and Transport:
The modes of transport in Thane district are roads, railways and waterways.
Roads: We find many roads and railways here as Thane district lies close to
Mumbai city and Mumbai suburban districts and as industry has grown from
Mumbai towards Thane.
National Highways: Three national highways pass through Thane district.
Mumbai-Agra National Highway: This highway starts from Mumbai. The important places from Thane district on this highway are Thane, Bhiwandi,
Shahapur, Khardi.
Mumbai-Bangalore National Highway: This Highway starts from Mumbai. A big bridge is built on the Thane creek on this highway. This highway then proceeds from Vashi to Bangalore via Panvel in Raigad district.
Mumbai-Ahmadabad National Highway: Ghodbandar, Manor, Talasari, etc., from this district are on this highway.
There are also other roads in the district connecting other places.
Railways: Three main railway lines pass through Thane district. The first railway line in India from Mumbai to Thane was laid in this district.
Mumbai-Chennai Railway Line: Starting from Mumbai, this railway line goes to Chennai via Thane. Dombivli, Kalyan, Ulhasnagar, Ambarnath. Badlapur stations in the district.
Mumbai-Kolkata Railway Line: Thane, Kalyan, Shahad, Titwala, Asangaon,
83 Khardi and Kasara railway stations are on this railway route.
Mumbai-Delhi Railway Line: This railway goes to Delhi from Mumbai via
Vadodara in Gujarat state. The following railway stations from Thane district are located on this line: Bhaindar, Vasai Road, Nalasopara, Virar, Palghar,
Dahanu Road and Gholwad.
Kalyan. Diva and Vasai Road are the railway junctions in the district.
Local Transport: Local transport facility has been provided on a large scale for the people from Thane district to go to Mumbai and various suburbs as also to places in Thane district. Local transport is useful for travelling to and from offices, factories, educational institutions, etc., as well as for business.
Trains used for local transport are called local trains. They run on electricity.
Local trains leaving from Chhatrapati Shivaji Terminus go upto Kalyan,
Ambarnath and Kasara in Thane district. Local trains leaving from Churchage railway station go upto Dahanu in the district. One railway line goes from Diva upto Panvel in Raigad district in the south. Trains have now started plying from
Chhatrapati Shivaji Terminus, Mumbai upto Panvel.
In addition to this, buses also carry the local traffic in Mumbai-Thane-Kalyan cities.
From the analysis of the transportation and development of the adjacent areas along the roads and railway lines, one can obsen'e "Ribbon Development'' i.e. development of the region in the span of five kilometres along the railway lines and highways.
Waterways: Thane district is near the sea. So the coastal traffic in the district
84 is carried by sea. Creeks are also used for transport. Dahanu, Satpati, Mahim.
Kalyan, Vasai, Uttan, etc., are the ports in the district.
Trade: Wood for building construction, coal, honey, salt, fish, fruits, vegetables, etc., are sent to other places from the district. Cotton, iron, sugar, fertilizers, medicines, kerosene, etc., are brought into the district from other districts or states.
M. Administrative Divisions
Thane comprises of 15 talukas. The talukas are Thane, Kalyan, Murbnd.
Bhiwandi, Shahapur, Vasai. Ulhasnagar, Ambarnath, Dahanu, Palghar.
Talasari, Jawhar, Mokhada, Wada and Vikramgad.
Thane is presently the only district in India which comprises 7 municipal corporations: Mira-Bhayandar. Thane, Navi Mumbai, Kalyan-Dombivali.
Ulhasnagar, Bhiwandi and Vasai-Virar.
At present, there are 24 Maharashtra Assembly constituencies in Thane district.
N. Population
The total population of the district as per 2011 census is 11,054,131.The rate of growth of population during 2001-2011 is 35.94 per cent representing an increase from 81,31,849 persons in 2001 to 11,054,131 persons in 201 1. The density of population per square kilometre is 1157 as per 2011 census, while it was 851 in 2001 census. The sex ratio is 880 females per 1000 males, whereas it was 858 in 2001 census. In Thane, 80.66 per cent population is literate, in which male literacy is 87.06 per cent and female literacy is 73.10 per cent in the year 2008 and 72.58 per cent population lies in Urban Area . Per Capita
85 District Income of the Thane District was Rs. 1,05,914 in the year 2009-10 (at current prices).
The table below contains some more information regarding demographic features of Thane District.
Table 3.4 Demographic Features of Thane District
Description 2011 2001
Actual Population 11,054,131 8,131,849
Male 5,879,387 4,377,747
Female 5,174,744 3,754.102
Population Growth 35.94% 54.92%
Area Sq. Km 9,558 9,558
Density/km2 1,157 851
Proportion to Maharashtra Population 9.84% 8.39%
Sex Ratio (Per 1000) 880 858
Child Sex Ratio (0-6 Age) 918 931
Source: (Compiled from) Primary Census Abstract of respective years
O. Tribal Life:
The hilly region of the district consisting of Mokhade. Jawhar, Talasari,
Dahanu. Wada, Vikramgad, Shahapur and Murbad talukas are located in the north and north-east of Thane district. The tribal are known by the following names: Warli, Katkari, Thakar, Malhar koli, Dhodia and Dubla.
P. Cooperative Banking in District
The cooperative movement may be said to have started in Thane district in
1911, when two co-operative societies were established at
86 Umbargaon (Umbargaon is now included in Gujarat) by the encouragement of the then local revenue officers. These societies could not function for more than a year. The year 1913 was important in the history of co-operative movement in Thane district as three agricultural societies were established during the year, one each at Maroli (in Umbargaon taluka), Umbargaon and
Kelvva-Mahim (in Palghar taluka). The object in starting these co-operatives was to make available to the agriculturists cheap credit and to develop amongst them a sense of co-operation, mutual help and economy. Most of the earlier co operative societies in this district were established with these limited objects in view. During the last about 25 years co-operation has been advocated as a way of life and is looked upon as the best method of bringing about quicker progress in development of agricultural production, profitable disposal of agricultural produce and better organisation of cottage industries 12.
The Cooperative Banking System in Thane District includes 19,695 cooperative societies in which 411 are agriculture cooperative societies, 1381 are non- agriculture cooperative societies, 17903 are other cooperative societies. "(In detailed description of development and progress of cooperatives in Thane has been given below in this chapter.)
Q. Some Important Places
There is a number of important places in Thane district -
Thane: Thane is the district headquarter. There are many industrial units here.
There are cotton and woollen textile mills. Also, there are factories
87 manufacturing paper, paints, metal equipment and machinery and metal goods.
The Kopineshwar temple of Thane is famous.
Kalyan: This place is the taluka headquarter and the main railway junction.
There are rice mills here as also factories making car spare parts. Sand, bricks and rice are sent out from here by waterways. The Hajimalang dargah is situated on Malangagad hill nearby.
Bhiwandi: This town is situated on the Mumbai-Agra highway. This place is famous for its handlooms and power looms. Carpets and silk fabric are made here. Machinery for rice mills is also manufactured here. There are rice mills and timber marts in Bhiwandi.
Ambarnath : This taluka headquarter is situated on the Mumbai-Punc railway line. There are factories manufacturing chemicals, matchboxes, explosives and watches. The ancient Shivalaya of Ambarnath is worth visiting.
Ulhasnagar: This is the taluka headquarter. This town is situated in the Ulhas river basin. It has factories making radio sets and plastic goods.
Jawhar : This is the taluka headquarter. This place is on the Nashik-Dahanu road. As it is situated on a high plateau, it is known as a hill-station.
Dapchari: There are dairy facilities (Gawaliwada) at Dapchari for tribes. A milk project has also been developed here on a large scale.
Kase: It has a Sarvodaya Kendra for tribes.
Manor: This place is situated on the banks of the Vaitarna River. It is a junction of Mumbai-Ahmadabad and Palghar-Wada roadways. That is why it has become a transport centre. Vajreshwari : Vajreshwari is famous for its hot water springs. Hot water springs are also found at Ganeshpuri, Akloli, Datiware and Kokner.
Virar: This is an important place in Vasai taluka. Local trains from Mumbai travel upto this station. The Axnala port is located nearby. Arnala fort is well- known.
Dombivli: This is an important centre on the Central Railway. There are various industries here.
Bhaindar: This is an important centre on the Western Railway. There are many salt pans here. There are also factories manufacturing chemicals, paints, plastic articles and medicines.
Mokhada: This place is the taluka headquarter. The hill-station Suryamal is nearby.
Vasai: Vasai on the Western Railway is the taluka headquarter. There are famous historical forts here. There are also banana and betel-leaf plantations.
There is a factory making fountain pens.
Palghar: Palghar is the taluka headquarter. There is a nuclear power plant at
Tarapur which is nearby.
Dahanu: This place is the taluka headquarter. There are chikku and rose gardens here. It is a fishing port. There are factories manufacturing iron water drawing wheels and car spare parts. Also, there are rice mills. A special kind of jaggery (tadgul) is made from the sap of the palm tree. Small boats too are built here.
Satpati: This port is famous for fishing.
89 R. Education
Education is considered as one of the basic needs for human development, hi this regard, it is interesting to understand the set up of educational institutions in the district. The table given below shows distribution of educational institution in the district.
Table 3.5 Educational Institutions in the District
Primary Schools 5,815
Secondary Schools 1458
Higher Education histitutes 414
Adult Education Adivasi Ashram Schools 72
I.T.I. 64
Source: Socio-Economic Statistics of Thane district, 2011-12
From the above table it is understood that there are 5815 primary, 1458 secondary schools and 414 higher education institutes in the district. As on 31st
March-2012, there are 64 Industrial Training Institutions (I.T.I.) in the district.
As compared to population, there are 53-Primary and 15-Secondary schools, 4-
Higher Secondary institutes per one lakh population. Looking at the student enrolment, there are 12,21.842 students in Primary Schools and 10,76,592
Secondary and higher secondary schools. Out of total students as given above. in Primary Schools there are 1,34,474 students of Scheduled Castes and
2,79,55 Istudents of Scheduled Tribes while in secondary and higher secondary schools there are 1,37,539 students of Scheduled Castes and 1.27,747 students of Scheduled Tribes'**.
90 S. Division of Thane district
The Maharashtra government approved formation of the Maharashtra state's newest district. Paighar, out of Thane. Palghar is Maharashtra's 36" district and came into existence on August 15, 2014. Political parties and non-government organisations had been demanding Thane district's bifurcation for last three- and-a-half decades.
The primary reasons behind the bifurcation for Thane's division are its size and spread, which make administration quite a challenging affair. The area of the district is 9,558 sq km. With history dating it back to 1817, Thane today offers some stark contrasts. On the one hand, with the ongoing urbanisation Thane city is dotted with skyscrapers, swank malls and multiplexes, flyovers and wide roads, and on the other, barely a few score km away are some of the most wretched tribal villages and hamlets in the hilly forested regions and tiny fishing villages on the coast. The district, with"a large tribal population, huge tracts of forest and inaccessible areas has always been challenge for the administrators. For getting a caste certificate, some tribal persons had to travel three and half hours and spend about Rs. 200 to reach the district headquarter.
Hence, for smooth administration of this huge area it was necessary to split the district. According to the 2011 Census of India, Thane was the most populated district in the country, with 11,054,131 inhabitants. Its population was 9.84 per cent of Maharashtra's population and its density was 1,157 people per sq km.
Thane district comprised of 15 talukas — Thane, Kalyan. Murbad, Bhiwandi,
Shahapur. Vasai. Ulhasnagar, Ambernath, Dahanu, Palghar, Talasari, Jawhar,
91 Mokhada, Vada and Vikramgad. The district had 24 Assembly seats with four
Lok Sabha constituencies. Thane was also the third-most industrialised district in Maharashtra. According to the information available with the state revenue department, 51.75 per cent of Thane's work force was engaged in agriculture and allied activities, 6.19 per cent in manufacturing, service and cottage industries and the remaining 30.69 per cent in other activities. Women comprise 22.89 per cent of the district's total work force.
With the division, the new Thane district now includes the rapidly-growing urban talukas of Thane, Kalyan, Murbad, Bhiwandi, Shahapur, Ulhasnagar and
Ambernath with area of 4241 sq. km. and population now stands at 80,58,573 people. The Thane district will have 3 scats of Lok Sabha and 18 seats of vidhsn sabha. On the other hand, Palghar district comprises of the tribal- dominated, coastal talukas of Dahanu, Palghar. Talasari, Jawhar, Mokhada,
Vada, Vikramgad and Vasai with the area of 5766 sq. km. and population stands at 29,95,428 people . Palghar is the headquarter of the new district. The
Palghar district will now have 1 seat of Lok Sabha and 3 seats of Vidhan
Sabha. Thus, it is obvious that the Thane district will be more powerful than the
Palghar District. This is the first major bifurcation of a district in Maharashtra after 1999, when Gondia and Gadchiroli were created in the eastern Vidarbha region of the state, taking the total count to 35 districts in Maharashtra. The government dissolved the Thane Zilla Parishad while the existing Thane
District Central Cooperative Bank continues to exist for both the districts. The division of Thane will put an additional burden of Rs 430 crore on the state
92 exchequer. The decision to bifurcate the district was taken after a suggestion given by the committee headed by the commissioner Vijay Nahata of Kokan
Division and the opinion poll / survey undertaken by the government.
Figure 3.3 Map showing areas of Thane and Palghar districts after bifurcation
Palghar
UIHuiMg* .
Thane
There is a requirement of all round development of the new district which will
take a longer time as though the Palghar district is larger than the Thane district
and population-wise its population is lesser by around 50 lakhs, the new district
is not that rich and development of infrastructure etc. will require huge
investments and planning on the part of the government. It is estimated that the
new district will need about 4.300 government employees, including 155 Class-
I oftlcers. 241 Class-ll Officers. 3332 Class-Ill staff and 561 Class-IV staff to
93 manage the daily administration. The cost of setting up the new administration and starting various schemes in the new district is expected to be around Rs
466 crore. It is also said that the state will have to budget for over Rs 300 crore just to set up the offices of the district collector, superintendent of police, district court and zilla parishad office.
3.6 Cooperative movement in Maharashtra with special reference to
Thane District:
The co-operative movement mainly covers the growth of agricultural credit societies, multi-puipose societies. District Land Development Bank, District
Central Co-operative Bank. Urban Co-operative Banks, non-agricultural credit societies, non-agricultural non-credit societies, etc. The movement may be said to have started in Thane district in 1911, when two co-operative societies were established at Umbargaon (Umbargaon is now included in Gujarat.) by the encouragement of the then local revenue officers. These societies could not function for more than a year. The year 1913 was important in the history of co-operative movement in Thane district as three agricultural societies were established during the year, one each at Maroli (in Umbargaon taluka),
Umbargaon and Kelwa-Mahim (in Palghar taluka). The objective in starting these co-operatives was to make available to the agriculturists cheap credit and to develop amongst them a sense of co-operation, mutual help and economy.
Most of the earlier co-operative societies in this district were established with these limited objectives in view. The co-operation has been advocated as a way of life and is looked upon as the best method of bringing about quicker
94 progress in development of agricultural production, profitable disposal of agricultural produce and better organisation of cottage industries. The number of all co-operative societies increased to 1,851 by 30th April 1972.
The District Deputy Registrar of Co-operative Societies is in charge of the co operative movement in the district and is assisted by two Assistant Registrars of Co-operative Societies who have territorial jurisdiction as regards all the aspects of the co-operative movement in the district. The Co-operation and
Industries Officer works under the Zilla Parishad to carry out the duties regarding development of cottage industries and agricultural marketing. This officer under the Zilla Parishad is in charge of the function of promotion of the co-operative principle in the important sector of betterment of the dwindling cottage industries.
Table given below shows the position of co-operative societies in the district during 1916, 1921 and 1925.
95 Table 3.6 Statistics of Co-Operative Societies In Thane District In 1916, 1921
And 1925
Number Number Loans due from Sharecapital Classification Year of of Individuals Societies paid up societies members 1 2 3 4 5 6 7 (1) Banks 1921 1 212 99,590 29,450 1925 1 215 93,744 32,600 (2) Agricultural societies Credit 1916 14 1,237 70,206 3,384 Non-credit 13 552 12,337 10,850 Credit 1921 42 3,887 1,60,123 Non-credit 10 676 43,394 12,466 Credit 1925 40 4,373 1,68,136 Non-credit 11 1,051 45,208 14,925 (3) Non-agricultural societies Credit 1916 Non-credit Credit 1921 11 2,331 1,17,724 3,319 31,862 Non-credit 9 918 10,017 127 91,242 Credit 1925 20 2,879 3,53,206 70,613 Noncredit 11 1,221 1,748 1,42,439
Sources: Gazetteers of Thane District
The growth of co-operation in the district is mainly in the field of forest labourers' co-operative societies, fisheries co-operative societies, housing co operative societies, salary-earners' societies, consumers stores, rice mills and marketing societies. The extent of development of the co-operative movement in the district can be judged from the fact that the amount of short-term and
96 medium-term loans provided by Government to the societies increased from
Rs. 48 lakhs in 1961 to Rs. 86 lakhs by the end of the decade.
The following statement shows the progress in various categories of co-operative
societies in Thane district during the last decade (1961-62 to 1971-72):—
Table 3.7 The progress of co-operative societies in Thane district during 1961-62 to 1971-72
Registered societies Serial Upto Upto Upto Category No. 1961 1967 1972
(1) (2) (3) (4) (5) Agricultural credit societies 1 528 598 596 (service societies) 2 Co-operative lift irrigation societies 18 3 Non-agricultural credit societies. 44 76 124 4 Grain societies 199 201 197 5 Purciiase and sale unions 12 16 15 6 Milk societies and milk unions 9 22 37 7 r-arming societies 19 30 43 8 Co-operative rice-mill societies 4 17 19 9 Gram swarajya societies 3 3 4 10 Forest labourers societies 47 84 87 11 Labour contract societies 24 36 47 12 Consumers co-operative societies 62 79 90 13 Housing co-operative societies 42 186 344 14 iMsheries societies 4 3 4 15 Industrial co-operative societies 32 37 47 16 Taluka supervising unions 83 84 137 17 Well-being society 11 11 11 18 Transportation societies 1 1 1 19 Hducation societies 1 i 1 20 District industrial co-operative union 3 2 2
97 21 District nira-tadgul union 1 22 District fisheries co-operative union 1 23 District purchase and sale union 1 24 District fisheries co-operative union 1 25 District purchase and sale union 1 26 District Central Co-operative Bank 1 27 District Co-operative Board 1 28 Land Development Bank 1 29 Co-operative spinning mill 2 30 Poultry farming societies 13 14 31 Piggery societies 3 3 32 Fruit-growing societies 2 33 Taluka development board 10 9 34 Electric supply society 1 35 Labourers union 1 36 Other co-operatives 1 6 Total 1,147 1,523 1,859* Source: Same as Table no.3.6 * The number rose to 1,986 during 1973-74.
It is noteworthy that in spite of the immense growth of small industries in the
Thane industrial complex, there is no industrial co-operative bank in the district.
The Co-operation department of the State Government and the Zilla Parishad contribute their might towards the expansion of the co-operative movement.
Tlie following statement shows the expenditure incurred by the Co-operation department and the Zilla Parishad since 1961 to 1972 in the district:—
98 Table 3.8 Expenditure incurred by the Co-operation department and the Zilla Parishad since 1961 to 1972
Serial Scheme Expenditure incurred from 1961 No. to 1972 (Rs.) 1 Co-operative lift irrigation 1,8466,4 2 Co-operative milk schemes 1,33,562 3 Co-operative fisheries 6,17,500 4 Co-operative agricultural marketing 2,50,907 5 Agricultural produce loans scheme 25,97,637 6 Co-operative marketing 15,07,080 7 Agricultural processing societies 5,70,920 8 Co-operative farming 1,74425 9 Labourers societies and federation 2,56,832 10 Spinning mill 36,46,600 11 Co-operative consumers societies 10,89,000 12 Co-operative industrial societies 3,60,759 13 Handloom development 40,338 14 Conversion of handlooms to 52,000 powerlooms 15 Backward class societies 1,86,955 16 Forest labourers societies 6,69,600 17 Supply of consumers goods in rural 32,920 areas 18 Bhoodan and gramdan societies 61,050 19 Godowns under casli programme 1,00,000 20 Co-operative poultry farming 4,00,000 21 Co-operative piggeries 8,90,875 22 Housing for industrial labourers 7,94,520 Total 1,45,79,664 Source: Same as Table no.3.6
Table given below shows the position of different types of co-operative
societies in Thane district during 1974-75.
99 Table 3.9 Financial Status Of Different Types Of Co-Opcrative Societies In Ihane District During 1974-75(Rs. in thousands)
Number of members Reserve Number Types of Share and Working of societies Societies Individuals capital other capital societies funds 1 2 3 4 5 6 7 1. Agricultural credit societies 563 88,959 72,86 29.00 3,88,23 (including service societies) 11. Agricultural non-credit societies- (a) Fisheries 36 22,658 53.76 50.58 2,30,48 societies (b) Agricultural 14 517 7,445 17,64 17,33 2,14,18 marketing societies (c) Animal husbandry 70 160 4,442 9,71 3,64 39,55 societies (d) Irrigation 46 695 54 1,09 societies (e) Farming 29 1,072 1,72 3,74 13,69 societies (0 Agricultural 19 132 9,248 8,52 3,12 25,12 processing societies (g)Other agricultural 14 641 60 2,08 9,03 non-credit societies
1U~ 130
100 Number of members Reserve Number Types of Share and Working of societies Societies Individuals capital other capital societies funds 1 2 3 4 5 6 7 III. Non-agricultural credit societies- (a) Urban credit 13 6,488 3,55 1,94 10,23 societies (b) Salary- 155 58,000 20,71 16,98 3,27,76 earners societies (c) Urban 10 35,082 47,75 23,86 5,59,39 banks
Number of members Reserve Number Types of Share and Working of societies Societies Individuals capital other capital societies funds 1 2 3 4 5 6 7 IV. Non-agricultural non-credit societies- (a) Weavers 5 1.482 1,20 1,15 7.20 societies (b) Other industrial 95 174 8,574 13,58 16,30 66,09 societies (c) Consumers 86 26 37,891 16,82 17,14 90,79 stores.. (d) Housing 598 17,341 53,12 6,49 7,38.14 societies.. (e) Odier non- agricultural 178 547 19,841 41,83 12,64 1.14,20 non-credit societies (0 Spinning 2 4 1,174 1.11,90 1,32,33 4.45,66 mills Source: Same as Table no.3.6
District Central Co-operative Bank.: The Thane District Central Co operative Bank Ltd. was established at Thane in 1958 and has been working as a federal financing agency catering for the credit requirements of all the
101 primary co-operatives in the district. The Zilla Parishad also transacts its financial business through this bank since 1962. The bank is the central financing agency and the principal purveyor of credit to the co-operative sector in the district. Financing of agricultural credit and marketing is however its principal functions.
The liability of the members is limited and its membership consists of both co operative societies and individuals. The funds of the bank consist of (i) share capital, (ii) reserve and other funds, (iii) deposits from societies and the general public, and (iv) loans or over-drafts from scheduled banks. The major part of the working capital of the bank is derived from short-term deposits.
The branches of this bank are allowed to accept deposits from local bodies and citizens. Besides, the Central Bank can raise loans from the Maharashtra State
Co-operative Bank, Bombay, which is the apex bank. It avails of over-draft facilities from the State Bank of India as well as from the apex bank for the purpose of exchange transactions and other incidental needs.
Table given below shows the statistics relating to the bank during 1966-67 to
1974-75.
102 Table 3.10 Statistics Relating to The District Central Co-Operative Bank, Thane
District
(Rupees in thousands) Numbe Members Shar Reserv Loans advanced Worki rof e e and Mediu Year Societ Indivi Short- branche capit other m- ies duals capital term s al funds term 1 2 3 4 5 6 7 8 9
CNI in 00^ 00 m 00 in oo' ri r^'
ND r-, lO OO t ON' Os" 1/-1 in <~n
NC 00 OO 1^ o in in rn NO_ CNT
NO ON iri ^' ON'
o NO ^„ NO 1 oo o ON o^_^ NO' CN]^ m' ON_^ (N NO' oo' in
•*'
in o en o CNl NO' NO' ^ ^ ON' "^' CN^ n' <^4 >n' NO' NO >n O 00 1/^ OO 00 o -1- r<^' ON m' m' r~-' NC "1 oo r-' rn NO 00 in m in NO__ ^ ON_ ON_^ r<~. rn o' oo o' NO oc' ON' ON <> 1; ON ON ON' ON' NO^ in NO o' "*' Source: 5sam e as Ta 3le no.3. 5 103 The deposits of the bank which stood at Rs. 214.13 lakhs in 1965-66 increased to Rs. 306.45 lakhs in 1969-70, thus registering an increase of 43.11 per cent. The short-term advances of the bank increased from Rs. 1127.77 lakhs in 1968-69 to Rs. 1196.64 lakhs in 1969-70; while its medium-term advances in 1968-69 and 1969-70 stood at Rs. 19.55 lakhs and Rs.23.26 lakhs. respectively. The following statement shows the comparison of deposits and advances of the District Central Co-operative Bank Ltd., Thane, in 1965, 1966, 1967, 1968 and 1969 :— Table 3.11 Comparison of deposits and advances of the District Central Co- operativc Bank Ltd., Thane Year Deposits (in Rs. Lakhs) Advances (in Rs. Lakhs) 1965 2,14,13 1,25.19 1966 2,74.00 1,88.00 1967 2,92.61 2,20.94 1968 2,85.87 2,40.02 1969 3,06.45 2,95.33 Source.—Annual Reports of the District Central Co-operative Bank Ltd., Thane. 1969. Land Development Bank: The Primary Land Mortgage Bank was established in 1939 with a view to provide long-term finance to cultivators in Thane and Kulaba districts. Previously it had two branches, one each at Palghar (in Thane district) and at Alibag (in Kulaba district). This bank was working for both the districts, but in October 1962 a separate Land Mortgage Bank was established for Kulaba district. As per the directive of the Reserve Bank of India, the Land Mortgage Bank was re-named as the District Land Development Bank so as to make its puipose explicit in its name itself 104 The membership of this bank was 2,848 in 1962 and it advanced loans of Rs. 52,000 for construction and repairs to wells, purchase of oil-engines and other land improvement purposes during the same year. The amount of loans outstanding at the end of the year was Rs. 8.60 lakhs of which Rs. 1.50 lakhs were overdue. The amount of rural debentures collected during the year was Rs. 57,000 as against the allotted target of Rs. 10,000. The District Land Development Bank did not advance any loans during 1967- 68, 1968.69 and 1969-70. The membership of the bank was limited to individuals, while societies were not enrolled as members. It had only two branches and 3.442 individual members in 1969-70. Table given below shows the position of the bank during 1963-64, 1965-66, 1967-68 and 1969-70. Table 3.12 Statistics Relating To District Land Development Bank, Thane District Number Number Reserve Share Working Loans Year of of & other capital capital advanced Branches members funds I 2 3 4 5 6 7 Rs. Rs, Rs. Rs. 1963-64 1 1,079 85,000 1,03.000 10,28,000 1.86,000 1965-46 1 3,442 85,475 34,749 7,93,153 2,43,600 1967-68 2 3,442 85,475 86,477 6,44,772 Nil 1969-70 2 3,442 85,475 79.000 5.25,000 Nil Source: Same as Table no.3.6 105 This bank went into liquidation during 1970-71. Urban Co-operative Banks: The joint-stock banks are very often not inclined towards catering to the needs of small traders, petty industrialists, etc. They have rigid patterns of loans and advances which hardly suit the needs of the parties with smaller means. Under the circumstances, numerous persons of small means like traders, factory workers, etc.. had to depend upon money lenders. This lacuna was removed by the organisation of urban co-operative banks. 'There was one such banking organisation in the district in 1921. In the year 1974-75, there were ten urban credit banks in the district. These Sinks provide finance for trade on security of merchandise and also against the pledge of gold and silver. Table given below shows the deposits and advances of the urban banks in the district during 1965-66 and from 1969-70 to 1974- 75. 106 Table 3.13 Statistics Relating To Urban Co-Operative Banks In Thane District Reserve Loans advanced Number Number Share- and Working Year of of Short- Medium- capital other capital banks members term term funds 1 2 3 4 5 6 7 8 Rs. Rs. Rs. Rs. Rs. oo o ON o IT) ON o ON^ NO^ ON" ON I/O ON NO' o o o o C o o o o o O o o c >/-l '*' o" rf ON o6 o' NO" oo" o o o o O o o o o o o o_ r<-r o o vO oc oT OO r5 ON" NO__ o O o o o o o ri o^ OO ri •*" I/O n 1/N' I/O o o o o o o O ON o o o O o_ o_ oo" oo" o 00 ^n o NO oo" NO' ON' i/o" m" oo o o o O o o o o O O o o o oo" m O o o' o^' i/o" o NO" oc' ^" r~" o o IT) o o o o o o o a- o m" r-" 4 O 1/0 The total deposits of urban banks stood at Rs. 31.26 lakhs in 1966.67 which increased to Its. 43.63 lakhs in 1972-73. 107 Agricultural Credit Societies: Agricultural credit societies constitute a major sector of the co-operative movement in Thane as elsewhere in India. As a matter of fact, the co-operative movement was started and flourished mainly as a credit movement. These societies have gained great importance as an instrument of the State's agrarian policy. As stated earlier, two agricultural credit societies were started in the district in 1911. the number of which went on increasing since then. The number of rural credit societies which was only three in 1913 increased to 113 in 1935-36, to 401 in 1950-51, to 495 in 1960- 61 and to 566 in 1973-74. These societies grant short-term loans for the purpose of meeting expenses on seed, manure, weeding, etc. and medium-term loans for purchase of bullock- carts, iron implements, etc. and payment of old debts as well as for works of land improvement. The duration of the medium-term loans ranges from three to live years. The loans are granted against personal security of the borrower, mortgage of immovable property or of crops as collateral security. Besides providing credit facilities, they cater to the other needs of the cultivators. As a matter of fact, they ha\e now been organised on the principles of service co-operatives, and are described as multipurpose societies or seva societies. The position of agricultural credit societies in 1950-51 and 1960-61 is shown in the followinu statement — 108 Table 3.14 Performance of agricultural credit societies Particulars Year 1950-51 1960-61 1 Number of agricultural credit societies 401 495 2 Number of members 23,317 46,860 3 share capital (Rs. in laths) 6.57 19.18 4 Reserve and other funds (Rs. in lakhs) 4.37 6.46 5 Working capital (Rs. in lakhs) 22.75 76.34 6 Number of members to whom loans were advanced 36,830 7 Amount advanced (Rs. in lakhs) 11.54 41.15 8 Amount recovered (Rs. in lakhs) 8.84 34.55 9 Loans outstanding (Rs. in lakhs) 12.14 48.43 10 Overdues (Rs. in lakhs) 1.58 17.28 Sources: District Census Handbook, Thane, 1961. Table below gives the statistics of agricultural credit societies in Thane district during 1964-65 and from 1969-70 to 1974-75 similarly Table no.3.16 gives the statistics of primary agricultural credit societies in each taluka of Thane district during 1974-75. 109 Table 3.15 Primary Agricultural Credit Societies In Thane District (Rupees in thousands) Loans s -o 'a « a 7u3 en (J I. , s S > a « > C IT) in 00 in m CO (N' r--' oo' o' oo oo m (N' o r-- O in oo in o o in ^' oo' oo' m CO o o o oo in o 00_^ oo '*' oc' in oo' to in CO 00 (N' (N o 00 O oo in oo O o" oo' r-i' -* m oo' o' 00_^ o, 00 (N' o O in o oc o r^' oo' i/i' o o' in rj' in 00 in n' in 00_^ o oo 00 (N' oo' in (^1 ON oo C^ in o 1 o in oc oo' 00 o' co_^ r<-. o o6 <^1 CO ri Source: Same as Table no.3.6 10 Table 3.16 Primary Agricultural Credit Societies in Each Taluka of Thane District, 1974-75 (Rupees in thousands) "3 Loans a -o O £ 73 'S. it a> 3 cs u 1. > .S 3 s ^ 1 e •a a; © 5! o o o u > u o 1 > a a Of 1 ^ si !/3 in < O 1 2 3 4 5 6 7 8 9 10 11 I/O >/~, ON ON) Thane ON NO en ^c r-- OO o Vasai O o oo" CNT r-4 oc oo oc rn Palghar NO' CNT UO o l/"j (^1 NC__ Dahanu O in o o' ON' ro (^1 oc (N Talasari ^ O -o CNl' O oo Jawliar IT) r-' oi o' NC (N O NO re aN_^ Mokhada -* ro' r~' 00 (^1 oc ON o O Wada ^n NO 1^1 ro o o ON oc 1^ o in Bhiwandi r-f oc' o" r'-r cc oc r~^ 0C_^ o Shahapur oo in oc' o6 oc 2; ON o NO Murbad -r r- ''1 ^' in m CO Kalyan m 1^ '/", o r-l vC o ro Ulhasnagar in '^' o o NO^ District Total o' (^1 NC 00 Source: Same as Table no.3.6 Grain Societies (Grain banks): With the intention of making available to the agriculturists the required supply of seeds and to help them in acquiring the 111 necessary stocks of grains for consumption Government started grain depots in several villages since 1939. Grain depots came to be first organised in Thane district with a view to providing credit in kind to cultivators in the backward areas, so as to enable them to raise crops. But they became defunct after some time due to certain organisational defects and mismanagement. This prompted the Government to convert them into co-operative grain societies. The total number of grain depots converted into co-operative grain societies was 84 in 1953-54. The position of these societies in the district during 1951-52 and 1952-53 is given below:— Table 3.17 The Status of Grain Societies in the district during 1951-52 and 1952- 53 Y ;ar Particulars 1951-52 1952-53 1 Societies 52 66 2 Sliare-capital (in loipees) 51,593 55.045 3 Reserve fund (in rupees) 58,020 75.005 4 Government loan (in rupees) 52,277 60.574 5 Working capital (in rupees) 1,70,258 2,28,840 Source; Same as Table no.3.6 The nuinber of registered grain societies was 199 in 1961 which decreased to 197 on 30th April 1972. The following statement shows the statistics relating to grain societies in the district during 1967 and 1968 :— 12 Table 3.18 Statistics relating to grain societies in the district during 1967 and 1968 Year Particulars 1967 1968 1 Societies 199 199 2 Members 30,197 29,841 (Rupess in thousands) 3 Share-capital 9,88 12,59 4 working capital 16,33 19.24 5 Profit 1,54 98 6 Loss 13 3,03 Source: Same as Table no.3.6 P^ishcries Societies: Fisheries is an important extractive industry in the district next to agriculture and it is but natural that a good many co-operatives of fishermen should be organised in the district. The first co-operative fisheries society in the district was started at Satpati in 1937. However, not even a single more society was established upto 1946. The number of these societies increased to three in 1947 and to twelve in 1948. The following account shows the position of these societies in 1961-62 as given in the District Census Handbook, Thane:— "There arc 32 fishermen's co-operative societies in the district in 1960-61. Their combined membership is 14.024; share-capital of Rs. 2.98 lakhs, working capital of Rs. 15.01 lakhs. The societies received Rs. 3,000 as subsidy from the Government during the year. Catch value of the fish during the year is Rs. 14.75 lakhs and sales value is Rs. 15.41 lakhs. Twenty four of these 113 societies made a profit of Rs. 1.56 lakhs, three sustained a loss of Rs. 1,000 while the remaining five were stagnant." "Some fisheries societies have made remarkable progress. The Satpati Macchimar Vividh Karyakari Sahakari Society Ltd., established at Satpati. Palghar taluka, in 1944, is one of them. Besides fishing activities, the society has undertaken building of small boats. From 1947 to 1961 the society has built 66 launches and 32 boats of various sizes. In 1962-63 the society also built 8 trawlers. All the fishing boats maintained by the society for the benefit of its members are mechanised." The number of these societies increased to forty in 1968.69. The value of their sale of fish increased from Rs. 8.34,000 in 1968-69 to Rs. 1,75,15.000 in 1969.70. The working capital of these societies which was Rs. 15.01 lakhs in 1960-61, increased to Rs. 124.16 lakhs in 1969-70. Table below gives the statistics relating to co-operative fisheries societies in the district during 1966-67 and from 1969-70 to 1974-75. 114 Table 3.19 Co-Operative Fisheries Societies In Thane District (Rs. in thousands) Number of Number of Share- Reserve Worlting Year societies members capital & other funds capital 1966-67 38 1,94,23 7,67 11,88 63,16 1969-70 39 2,20,00 27,06 18,38 1,24,16 1970-71 39 2,10,00 33,17 17,70 1,37,72 1971-72 39 2,20,16 41,82 24,40 1,81,72 1972-73 39 2,24,72 50,51 27,63 2,11,29 1973-74 37 2,24,55 53,17 41,72 2,37,78 1974-75 36 2,26,58 53,78 50.58 2,50,48 Source; Same as Table no.3.6 During 1974-75 the turn-over of fishing by the members of the societies amounted to Rs. 154.76 lakhs, while the sale offish through the co-operatives was Rs. 359.07 lakhs. Government as well as the District Central Co-operative Bank Ltd. advanced loans to these societies for boats, trucks for marketing, etc. (For details refer the section on State Aid to Fisheries in this chapter.) Under the scheme of State aid to fisheries, Government granted Rs. 6,17,500 by way of subsidy to the co-operative fisheries societies during the last decade beginning with 1961. Co-operative Farming: The progress of co-operati\e farming societies is not satisfactory in this district. The farming societies in the district are of two categories, viz., joint farming societies and collective farming societies. In 115 1968, there were seven joint farming societies of which two were in Thane, one in Murbad and four in Vada talulcas. There were twenty two collective farming societies, of which three were in Kalyan, three in Bhivandi, two in Dahanu, one each in Murbad and Vasai, and six each in Palghar and Vada talukas. The statistical information about the fanning societies in the district as in 1967, 1968 and 1974.75 is given below:— Table 3.20 Farming societies in the district Year Unit r ciiuijuiaib 1967 1968 1974-75 1 Farming societies (a) Joint farming societies No. 6 7 29 (b) Collective farming No. 22 22 societies 2 Members Individuals N.A. N.A. N.A. 3 Share-capital Rs. ill thousands 1,10 1,26 1,72 4 Working capital Do. 4.50 2,20 13.69 5 Land under command Hectares 1,305 1,305 N.A 6 Land cultivated Do 33.7 364.5 73 Loss 7 (a) Number of societies No 6 14 N.A (b) Loss Rs. in thousands 31 52 N.A Source: Same as Table no.3.6 Lead Bank Survey Report of Thane district published by the Bank of Maharashtra in 1971 states that in 1969-70, the farming societies cultivated 310 hectares of land which was less than 50 per cent of the land cultivated in the previous year. A recent report of the Zilla Parishad states that there were 43 co-operative farming societies with total membership of 1,269 in the district by the end of June 1972. They had been allotted an area of 1.600 hectares of land, of which an area of 400 hectares was actually cultivated in 116 1971-72. These societies got subsidy of Rs. 1,74,125 upto June 1972. from Government in order to help them. Animal Husbandry Societies: These societies include taluka milk produce unions, primary milk produce societies, poultry fanning societies and piggery societies. A dairy co-operative society was established in 1914 with a membership of 75 and share-capital of . Rs. 3,500. It was however closed in 1918. One cattle breeding society was formed at Makunsar in Palghar taluka, which was also closed. There were five milk supply societies as on 30th June 1961 with a combined membership of 465, share-capital of Rs. 14,000 and working capital of Rs. 36,000. The value of their sales during 1960-61 was Rs. 80,000. Table below gives the information of taluka milk produce unions, primary milk produce societies, poultry farming societies and piggery societies in the district in 1968. 17 Table 3.21 Animal Husbandry Societies in Thane District Particulars Unit Year 1967 1968 1 2 3 4 I. Milk Produce union Number 3 4 (a) Members Number 2,65 243 (b) Share-capital Rupees in hundreds 47 54 (c) Working capital Rupees in hundreds 4,36 4,58 (d) Milk sold Rupees in hundreds 17,30 8.33 (i) Number of societies Number 1,810 1,200 (ii) Profit Rupees in hundreds 12 12 (1) Number of societies Number. 2 2 (ii) Loss Rupees in hundreds 16 16 2. Primary milk produce societies Number. 18 (a) Members Number 18,32 15,33 (b) Share-capital Rupees in hundreds 50 50 (c) Working capital Rupees in hundreds 6,10 1,64 (d) Milk purchase Rupees in hundreds 8,97 3,21 (e) Milk sold Rupees in hundreds 14,08 3,51 (ij Number of societies Number 13 9 (ii) Profit Rupees in hundreds 20 18 (i) Number of societies Number 5 7 (ii) Loss. Rupees in hundreds 8 6 Source: Same as Table no.3.6 There were forty animal husbandry societies with working capital of Rs. 20.87 lakhs in 1968-69 in the district. The Greater Bombay Milk Scheme and its newly proposed wing, the Dapchari Milk Scheme, are of immense significance for the dairy activities in Thane district. The authorities of the milk scheme encourage the dairy co-operatives in this district to supply milk at an assured price. This has given rise to a good 111 many societies which get tniancial assistance for purchase of buffaloes and the necessary equipment. The value of sales of these societies was Rs. 9,72,000 in 1968-69 and Rs. 16,12,000 in 1969-70. They received a grant of Rs. 1.33,500 from Government upto 1971. The first cattle breeding society in the district was established at Maroli and a second one at Makunsar (Palghar taluka). There were five poultry farming and piggery societies in 1969-70. The value of sales of these societies in 1969-70 was Rs. 4,89,000, while it was Rs. 3,89,000 in 1968-69. Table given below shows the statistics relating to animal husbandry societies in the district during 1966-67 and from 1970-71 to 1974-75. The milk and milk products societies purchased milk worth Rs. 68,15,000 during 1974.75, while they sold milk valued at Rs. 78,91,000 during the same year. The livestock societies purchased live-stock at Rs. 2,25,000 during 1974-75 and sold the same at Rs. 3.00.000. 19 ^^e>^ Table 3.22 Animal Husbandry Societies in Thane District in 1966-67 and From 1970-71 To 1974-75 Members Reserve Sliare- and Working Number capital other capital Year of Societies Individuals (Rupees funds (Rupees societies in lakhs) (Rupees in lakhs) in lakhs) 1 2 3 4 5 6 7 1966-67 37 34 2,518 9.78 0.56 26.60 1970-71 40 124 2,412 8.97 1.48 20.24 1971-72 53 124 3,172 9.79 1.80 27.27 1972-73 65 153 3,939 11.8 2.25 29.15 1973-74 65 154 4,043 6.18 3.63 33.51 1974-75 70 160 4,442 9.71 3.64 39.55 Source: Same as Table no.3.6 Agricultural Processing Societies: There were four agricultural processing societies in 1961, of which three were paddy husking societies and one was a banana preservation society. Their combined membership was 496, share- capital Rs. 1.36 lakhs and working capital Rs. 1.87 lakhs in the same year. The total membership of the paddy husking societies was 386 individuals and 46 societies. Of these three societies, only one was functioning and it husked 18.300 Bengali maunds of rice during 1961-62. The Vasai-Amala sukeli processing society had 64 members and its production was 86 Bengali maunds 120 during the year. (District Census Handbook, Thane, 1961). There were two co operative hand pounding societies in 1960-61 in the district, which were financed by the Maharashtra State Khadi Board. The number of co-operative rice mills which was only three in 1960-61 increased to nineteen in 1970. The agricultural produce processed by the co operatives during 1972-73 amounted to 47,048 m. tonnes valued at Rs. 30,21,000. Table given below shows the statistics relating to agricultural processing societies in the district during 1961-62 and from 1964-65 to 1974-75. The State Government contributes Rs. 20.000 towards the share-capital of each co operative rice mill. Under the scheme of State Aid to Industries, Government granted the subsidy of Rs. 51,71,000 during the last decade beginning with ! 961 to the agricultural processing societies in the district. 121 Table 3.23 Agricultural Processing Societies In Thane District (Rupees in thousands) Members Reserve Number Share- and Working Year of Societies Individuals capital other capital societies funds 1 2 3 4 5 6 7 1961-62 4 505 N.A. N.A. 2,35 1964-65 9 77 3,989 4,09 10 • 6,28 1966-67 17 7,165 7,03 7,47 13,12 1969-70 20 88 9,067 8,56 1,10 19,96 1970-71 19 88 9,089 8,65 1,31 20.69 1971-72 19 127 9,221 8,65 1,57 25,15 1972-73 19 131 9,625 8,66 1,97 25.09 1973-74 19 134 9,499 8,77 2,75 26,75 1974-75 19 132 9,248 8,52 31,2 25,12 Source: Same as Table no.3.6 Salary-earners' Societies: These societies are an important type of urban credit societies. Generally, the salary-earners find it difficult to obtain credit from institutional agencies since they have no security to offer. The agency of salary-earners societies fills this lacuna. They are based on thrift. Every member is required to pay his monthly subscription which ensures compulsory saving on his part. Besides supplying credit to the needy members, some of 122 them run fair price shops for the benefit of the community. The first society of this type was opened in the district in 1916. The number of these societies increased to eighteen in 1953. Table given below shows the statistics relating to the salary-earners societies including the factory workers societies in the district during 1964-65, 1966-67 and from 1969-70 to 1974-75. Table 3.24 Salary-Earners Societies In Thane District (Rs. in thousands) Reserve Nunibe Share- and Working Year r of Members capital other capital societies funds 1964-65 59 33,359 4,779 346 13,660 1966-67 75 51,000 6,979 500 18,016 1969-70 107 N.A. 11,524 1,344 25,520 1970-71 129 73,509 14,780 2,861 34,686 1972-73 129 40,593 21,894 2,789 53,577 1973-74 145 56,000 21,030 1,664 32,134 1974-75 155 58,000 20,710 1,698 32,776 N.A,=Not available. Source: Same as Table no.3.6 Forest Labourers Co-operative Societies: According to 1961 Census about 30.29 per cent of the total population of the district consisted of adivasis who are extremely poor and live in the forest areas. Not before long, the adivasis 123 were exploited by unscrupulous forest contractors who used to pay them subhuman wages. With a view to eliminating the middlemen and to promote the economic welfare of adivasis through the co-operative efforts, Government decided to allot various forest coupes at certain prices to forest labourers" co operative societies under the guidance of recognised social service organisations such as Adivasi Scva Mandal. Government also appointed a separate committee for the amelioration of the adivasis, which was charged with the functions of organising and assisting co-operative societies of forest labourers, co-ordinating their working, providing for their supervision and planning for exploitation of forest crops and regeneration of forest areas as well as for starting allied industries by or on behalf of co-operative societies. Besides, these societies have also undertaken social and educational activities. There is a Federation of Forest Labourers Co-operative Societies functioning from Palghar. The first Adivasi Seva Mandal in the district was founded in 1940. The number of forest societies affiliated to the Federation was 31 in 1959-60 which increased to 45 in June 1969. The societies had a membership of 7.332 and their share capital and working capital were Rs. 1-55 lakhs and Rs. 12.00 lakhs, respectively, during the year. They received Rs. 69,000 as loans and Rs. 1.28 lakhs as subsidy from Government upto 1961. The value of forest produce extracted by them during 1960-61 was Rs. 49.29 lakhs. The number of affiliated societies increased to 86 in 1970-71. 124 The entire forest area in the district has been divided into three divisions for purposes of allotment to forest labourers' societies: - (i) Dahanu-41 societies, (2) Thane-26 societies and (3) Shahaper-I9 societies. An amount of Rs. 1.60 lakhs was to the credit of Employees' Provident Fund at end of September 1970. About 600 employees were benefited by the scheme. During 1969-70 the societies at Kasa, Amgaon, Bormal and Talasari operated fair price shops for the benefit of the adivasis. The societies at Kainad, Kondhan, Shigaon, Tilher, Darshet, Umbarpada, , Dhardla, Medhe, Bhatane, Nimboli and Ambesari maintained godowns to stock food grains to be distributed to tribal in the rainy season. The amount spent on welfare schemes for the adivasi labourers was Rs. 97,850 during 1969-70. The Federation also associated itself with other activities such as affecting compulsory savings from the workers and organising educational facilities for which it spent about Rs. 8,500 in 1969-70. The following statement shows the statistics relating to forest labourers societies in the district during 1967, 1968 and 1971:— 125 Table 3.25 Forest labourers' societies in the district Year Sr. Particulars 1967 1968 1971 1 Societies 84 86 86 2 Members 11,357 12,394 15,000 3 Share-capital (Rs. in thousands) 3,53 3,54 N.A 4 Govemment share (Rs. in thousands) 1,59 1,83 N.A 5 Working capital (Rs. in thousands) 21,84 23,46 37,00 Profit 6 a) Number of societies 55 57 56 b) Amount (Rs. in thousands) 8.55 4.90 5 Loss 7 a) Number of societies 18 26 30 b) Amount (Rs. in thousands) 17 46 1 8 Coupes received 190 220 N.A 9 Sale value (Rs. in thousands) 57,71 70,47 N.A Source: Same as Table no.3.6 These societies get financial assistance from the Government of India for the first three years after their registration. Under this scheme each society gets Rs. 1,200 for management expenses. Rs. 1.500 for social welfare activities and Rs. 3,000 as Govemment contribution towards share-capital. Labour Contract Societies: In pursuance of the policy of progressive elimination of middlemen in the sphere of labour contracts Govemment has directed to give preference to labour contract societies in respect of public works department works valued at less than Rs. 20,000 each. Government has also authorised the Joint Registrar for Industrial Co-operatives and Village 126 Industries to sanction loans up to Rs. 5,000 each to serve as working capital of labour contract societies. Under the Government policy works in the public sector costing up to Rs. 50,000 can be given to these societies without any tender. Labourers societies and their Federation received Rs. 2,56.800 as subsidy from Govemment during the decade since 1961. There were sixteen labour contract societies in the district in 1961. The combined membership of these societies was 755 during the year. Their share- capital and working capital stood at Rs. 3,000 and Rs. 69,000, respectively. Of these sixteen societies, eight were defunct while six earned a profit of Rs. 8.000 and three suffered a loss of Rs. 9,000 during the year. (District Census Handbook, Thane, 1961.) The number of such societies increased to 36 in 1971 and total membership increased to 2,000. During 1971 they completed thirty-five works costing about Rs. 13,00,000. Twelve societies made profit of Rs. 20,000, and nineteen suffered a loss of Rs. 28,000 during the year. Table below gives the statistics relating to labour contract societies in the district during 1967, 1968 and 1971. 127 Table 3.26 Labour Contract Societies In Thane District Particulars Year 1967 1968 1971 1. Societies 36 38 31 2. Members 1,617 1,824 2,000 3. Share capital (Rs. in thousands) 70 86 NA. 4. Government contribution to share-capital (Rs. in thousands) 26 28 N.A. 5. Working capital (Rs. in thousands) 1,89 1,87 2,00 6. Number of works done 60 75 35 7. Cost of works (Rs. m thousands) 1,172 1,510 1,300 8. Profit- (a) Societies 9 10 12 (b) Amount (Rs. in thousands) .. 52 15 20 9. Loss- (a) Societies 20 18 19 (b) Amount (Rs. in thousands) .. 25 25 28 NA.= Not available. Source: Same as Table no.3.6 Urban Credit Societies: Though the Co-operative Act of 1904 contemplated the organisation of both rural and urban societies, the Government of India laid special emphasis on the organisation of rural credit societies. In spite of the emphasis on rural credit societies some urban credit societies were organised. It was with the recommendation of Maclagan Committee that the development of the urban co-operative movement received a great impetus all 128 over India, especially in Bombay and Madras provinces. Small traders, artisans, factory workers, small salaried classes of people in urban areas organised co-operative urban credit societies to escape from the exploitation by money-lenders. The Devrukh Brahmins Co-operative Society, Umbargaon, (Due to certain changes in boundaries, now Umbargaon taluka is included in Gujarat.) established in 1914, was the first co-operative urban credit society in the district especially for providing credit to Devrukh Brahmins. The second caste society, the Catholic Co-operative Credit Society Ltd., was established at Vasai in 1918 and the third caste society, Brahmins Co-operative Credit Society Ltd., Thane, was established in 1928. The Criminal Tribes Settlement Co-operative Credit Society was established at Ambamath in 1928. There were seven urban credit societies, four in Kalyan, and one each in Dahanu, Jawhar and Palghar talukas as on 30th June 1953. Their total membership was 3,616 and share.capital and working capital amounted to Rs. 1,64,127 and Rs. 4,89,177, respectively. The total number of these societies which was only seven in 1953 increased to twenty in 1971-72 and decreased to thirteen in 1974-75. Their position for 1971-72, 1972-73 and 1974-75 is given below: — 129 Table 3.27 Urban Credit Societies In Thane District Share- Reserve and Working Number Number of capital (Rs. other flinds capital Year of members in thousands { Rs. in (Rs. m societies (individuals) ) thousands thousands) (1) (2) (3) (4) (5) (6) 1971- 20 6,126 2,97 1,48 8,58 72 1972' 12 6,179 2,98 1,49 9,69 73 1974- 13 6,484 3,55 1,94 10.25 75 Source: Same as Tab c no.3.6 The societies advanced loans of Rs. 7.66 lakhs during 1974-75. Handloom Weavers' Societies: Cottage industries like handloom weaving are of great importance in the economy of Thane district from the point of view of providing employment to a vast number of unemployed populations. The first handloom weavers' co-operative in this district was established at Bhivandi on 5th May 1927. With a view to facilitate buying improved tools and appliances, trained artisans arc given special financial assistance by the Government. Weavers' societies are the most important type of industrial co-operatives in Maharashtra State. As there was a great demand for handloom products during 130 the last two decades, the weavers' societies could make remarkable progress in the State. Unfortunately however the co-operative movement has failed to bring in its fold the handloom industry in this district. According to the 1961 Census there were three handloom weavers' co-operative societies. The total membership of these societies was 1,361, and share-capital and working capital was Rs. 68,000 and Rs. 4,10,000, respectively during 1960-61. The total number of looms was 3,969 of which 3,610 were registered in the co operative field and these societies produced goods worth Rs. 52,000 during the same year. Table given below shows the statistics relating to handloom weavers' co-operative societies during 1966-67 and from 1969-70 to 1974-75. 131 Table 3.28 Handloom Weavers Co-Operative Societies In Thane District Share- Reserve and Working Number Number capital other funds capital Year of of (Rupees in (Rupees in (Rupees in societies Members ial 1 2 3 4 5 6 4 705 77,000 80,107 N.A. ON o 3 625 76,000 • 76,000 4,42,000 ON o 3 679 76.000 78,000 4,34.000 3 631 76,000 1,02,000 5.55,000 r 4 1,049 91,000 82,000 10,71,000 ON -* m 5 1,356 1,18,000 87,000 7,23,000 ON 5 1,482 1.20,000 1,15,000 7,20,000 ON M.A.--Not available. Source: Same as Table no.3.6 Co-operative Spinning Mills: There are now (1974-75) two co-operative spinning mills in the district. The tlrst mill, the Vishwabharati Co-operative 132 Spinning Mill, was established on 24th April 1965. During 1971 Government contributed Rs. 44,80,000 to this mill. Another mill was established during 1973-74 with a membership of 1,079. The following statement shows the statistics relating to these mills during 1968.69 and from 1971-72 to 1974- 75:— Table 3.29 Co-operative Spinning Mills in the district Number Number of Share- Reserve and Working Year of members capital other funds capital societies o o ON o c o o o 1 ON o r-i" oo OO of t^ vO ^— ' m ^^ o in G^ NO o •— 'r>^ o o o o Ol o o o t~~- ON o_ o^ rT ON r-~' NO" (N r^^- — m in NO^ o CNT m oo' r<1 ^O ly-i <~n o o o o r*^i o o o 1 _ o^ o, oo' rj O o' 00 r-- ^— r-i 0^0 o ^ .• m ——.• m^-^ NO r- rT ^ ^^ o o o o ON o o 1 I^ 'O r^i r-l ^^NO_^ o o ^^r r~ r--^ r'~, o "- ON' r^, t^ — -^"^ ^ , o O '/~i o O o r^ -^ o c o^ 1 I^ o' r^, o' r-i —; ON r^. o^ QN 'J^ ^ ^— f^,r\ — —_^ ^^ ^^ -~" -^ Source: Same as Table no.3.6 133 Co-operative Industrial estates: There were six co-operative industrial estates in the district in 1971. Their total share-capital and working capital stood at Rs. 16 lakhs and Rs. 23 lakhs, respectively, in 1971.Government had contributed Rs. 2.00 lakhs towards the total share-capital of Rs. 4.00 lakhs. Of the six estates, three were defunct, two earned a profit of Rsl.2 lakhs and four suffered a loss of Rs. 20,000. The Maharashtra Industrial Development Corporation built nine industrial estates in the district, of which four have been handed over to industrial co-operative societies. Besides the above, two industrial estates have been established in the co-operative sector at Vasai and Palghar in consultation with the Maharashtra Industrial Development Corporation. Other industrial co-operative societies: These societies include those organised by dyeing and printing works, oil ghanis, cane and bamboo works, tanning works, leather works, carpentry and smithy, metal works, pottery works, etc. According to the Census of 1961 there were 76 other industrial co operative societies in the district in 1960-61, of which two were organised by dyeing and printing works, seven by oil ghanis, seven by cane and bamboo works, one by tanning works, ten by leather works, eleven by carpentry and smithy workers, two by metal and three by pottery workers. The rest of them comprised co-operatives of miscellaneous artisans. The total membership of all the industrial societies was 2,967. and their share and working capital stood at Rs. 840 lakhs and Rs. 16.57 lakhs, respectively, during 1960-61. The combined value of production of these societies was Rs. 3.49 lakhs and the 134 sale value was Rs. 3.66 lakhs during the same year. The number of these societies which was 76 in 1960-61 increased to 117 in 1968-69 and decreased to 100 in 1972-73. The following statement shows the position of these societies in the district during 1971-72, 1972-73 and 1974-75:— Table 3.30 Other industrial co-operative societies in the district Particulars 1971-72 1972-73 1974-75 Societies 95 100 95 Members (a) Societies 164 164 174 (a) Individuals 3,876 12,985 8,174 Share-capital (Rs. in thousands) 3,89 7,25 13,53 Reserve and other funds (Rs. in 12,41 13,49 16.30 thousands). Working capital (Rs. in thousands) 33,75 33,74 66.09 Source: Same as Table no.3.6 Consumers' Co-operatives: The origin of consumers' co-operatives can be traced to the World War I. But most of them had only a temporary existence and between the two World Wars there were hardly any in existence. The rising trend of prices and the growth of the co-operative movement encouraged the establishment of consumers' co-operatives after 1951-52. The fast growth of urbanisation and industrialisation also contributed to the increase of consumers' societies in towns such as Thane, Kalyan, Bhivandi, Ambarnath, etc.. during the last about two decades. There were approximately 105 consuiners' societies in the district in 1953-54. Their total membership was 12,600 and working capital was Rs. 22 lakhs during the year. These 135 societies had purchased goods worth Rs. 165 lakhs during 1952 and their sale amounted to Rs. 176 lakhs during the same year. After 1952 Government relaxed controls which resulted in the closure of many societies. Hence the number of these stores declined from 105 in 1953-54 to 62 in 1960-61. In June 1961, there were sixty-two consumers' stores having forty six branches, sixteen of which were more or less defunct. The total membership of these societies was 9,577, share capital and working capital was Rs. 4.28 lakhs and 12.93 lakhs, respectively. During the year 1960-61 their sale amounted to Rs. 96.21 lakhs. Thirty-two of them made a profit of Rs. 1.43 lakhs and fourteen suffered a loss of Rs. 27,000 during the year. The following statement shows the statistics relating to consumers' stores in the district:— 136 Table 3.31 Statistics relating to consumers' stores in the district Number Member Reserve Share- Working Year of Societie Individual and other Capital capital societies s s funds (1) (2) (3) (4) (5) (6) (7) ••o oo 00 O (N o o -* o o o 1 o_ >/-) oo ^' 00_^ ^ 00_^ (^1 m' o o r<1 o o O o_ oo oo' oo" •a •^^ ON (^1 o o o o m in oo r~" GN in o o o o o_ o o oo o" •^" r-- oo oo" 5^ Source: Same as Table no.3.6 Value of purchases and sales of the consumers' stores in the district was Rs. 4,07,33,000 and Rs. 5,92,92.000, respectively, in 1973-74 and Rs. 9,74,20,000 and Rs. 10,17,59,000, respectively, in 1974-75. Co-operative Housing Societies: The immense growth of urbanisation and industrialization in industrial areas in the district increased the intensity of the acute housing problem from 1960. An average man found it extremely difficult to get accommodation worth the name in Thane, Kalyan, Dombivli 137 and other towns. This encouraged citizens to form co-operative housing societies in these towns. Government financial help also stimulated the growth of housing societies during the last about twenty years. The first co-operative housing society was established at Thane in 1930 and was followed by another one at Thane in 1944 and a third one in 1948. The total number of such societies increased to 42 in 1953. Their total membership was 2,527 and share-capital was Rs. 8,48,705 during the year. According to the 1961 Census there were forty co-operative housing societies in the district on 30th June 1961, of which twenty-three were organised by persons belonging to backward classes. Their total membership was 1,487, share- capital and working capital was Rs. 3.89 laths and 11.97 lakhs, respectively. They had built 106 independent houses valued at Rs. 1.60 lakhs and 241 tenements valued at Rs. 4.69 lakhs up to the end of 1960-61. The number of housing societies increased to 598 and their total membership to 17,341 in 1974-75. Their share-capital was Rs. 53,12,000 while their working capital was Rs. 7,38,14,000 during the same year. They constructed 2,064 tenements during 1974.75. Table given below shows the statistics relating to the co-operative housing societies in the district during 1966-67 and from 1970.71 to 1974-75. 138 Table 3.32 Co-Operative Housing Societies In Thane District Reserve Share- and Working Number Number capital other capital Tenement Year of of (Rupees funds (Rupees in constructed societies Members in lakhs) (Rupees lakhs) in lakhs) 1 2 3 4 5 6 7 r~ 185 7,952 21,80,000 N.A. 1,56,82,000 647 348 13,840 45,03,000 5.51,000 6,40,85,000 457 0^ (^1 1 434 13,933 45,25,000 5,77,000 7,05,75,000 769 537 16,393 45,36,000 5,80,000 8,74,03,000 804 664 16,626 52,58,000 6,43,000 7,30,91,000 916 598 17.341 53,12.000 6.49,000 7,38,14,000 2.064 N .A. =Not available. Source: Same as Table no.3.6 There were twenty-three co-operative housing societies of persons belonging to the backward classes in 1961. The total membership of these societies was 678, share-capital of Rs. 20,000 and working capital of Rs. 2.34 lakhs during 139 the same year. Their number increased to 32, while the total membership increased to 1,173 in 1971. Government provides loans up to 75 per cent of the cost of construction. Under this scheme these societies received Rs. 1,86,900 during the last decade. The Harijans, Navbaudhas and Nomadic tribes are given Government loan of 50 per cent and subsidy of 25 per cent of the cost of construction, while adivasis and vimukta jatis are given loan and subsidy of 37.5 per cent each of the cost of construction. Lift Irrigation Society: There is one lift irrigation society in the district which provides irrigation facilities to the member-cuUivators. This society receives grant from the Zilla Parishad. Its membership was 121 individuals during 1972-73. Its share capital amounted to Rs. 24,000, while its working capital was Rs. 25,000 during the same year. Other Societies: Besides the above mentioned societies, there was one co operative education society at Wada having a membership of 58 and share- capital and working capital amounting to Rs. 2,000 and Rs. 60,000, respectively, one co-operative dispensary at Vasai with a membership of 146, one well-being society at Vasai with a membership of 366 and \\\o co operative transportation societies at Thane with a membership of 437 during 1967-68. Co-operative Supervising Unions (The co-operative supervising unions have been discontinued since 1974): According to the recommendations of the Provincial Co-operative Conference held in 1929 co-operative supervising unions were established all over the Bombay Presidency. Accordingly, the 140 Bhiwandi and Kalyan Taluka Co-operative Supervising Union was established in 1929. The number of these unions increased to four in 1953-54. The supervising unions give direction, advice and assistance to the agricultural credit and multi-purpose societies; supervise the working of societies affiliated to them. They also help these societies to get loans from the District Central Co-operative Banks. They secure their deposits by obtaining grants from Government, by collecting contributions and donations. During 1972 there were eleven co-operative supervising unions in the district. Their total membership was 766 in 1968-69, which decreased to 711 in 1969-70. Their total income amounted to Rs. 4,32,000 and expenditure to Rs. 3,28,000 in 1967-68. District Co-operative Board: The District Union Board which was started in 1937 with the intention of powerful control and inspection of the supervising unions in the district, was converted into a District Co-operative Board in 1949 for propagating the co-operative spirit among the people and to give training to the officials of co-operative societies and to direct the work of supervising unions and other societies. The total membership of the Board stood at 425 including eleven supervising unions and 158 indi\idual members in 1970-71. Current scenario of Cooperation in Thane district: The district has variety of cooperative institutions functioning in the district. The table given below shows the position of different cooperative institutions in the district. 141 Table 3.33 Co-operative societies in Thane district Sr.No. Category Numbers 2009 2010 2011 2012 1 Agricultural credit societies (Total) 412 412 411 412 1.1 District Central Co-operative Bank 1 1 1 1 1.2 Primary agricultural cooperative societies 291 291 290 291 1.3 Agricultural service societies 0 0 0 0 1.4 Tribal Cooperative societies 119 119 119 119 1.5 Grain societies 1 1 1 1 1.6 Otiiers 0 0 0 0 2 Non-agricultural credit societies 1322 1212 1198 1185 2.1 Urban banks 18 17 17 17 2.2 Urban credit societies 1015 921 906 881 2.3 Salary-earners societies 289 274 275 287 2.4 Others 0 0 0 0 3 Farming societies 27 27 27 30 4 Other cooperative societies 1130 1164 1257 1109 4.1 Sugar factories 0 0 0 0 4.2 Agricultural processing societies 10 9 9 8 4.3 Spinning mill 32 33 33 33 4.4 Housing for industrial labourers 8 8 8 6 4.5 Industrial co-operative societies 489 513 538 310 4.6 Milk societies and milk unions 175 181 194 220 4.7 Fisiicries societies 122 124 126 126 142 4.8 Co-operative lift irrigation 164 163 163 164 4.9 Others 130 133 186 242 5 Social service societies 22498 23684 24683 25938 5.1 Consumers co-operative societies 233 229 227 224 5.2 Housing co-operative societies 20872 22021 22995 23984 5.3 Labourers union 664 657 658 907 5.4 Others 729 111 803 823 Total 25398 26499 21516 28674 Sources: Socio-Fxonomic Review of Thane district, District Statistical Office for respective years In recent years, it is observed that the cooperative segment is undergoing consolidation. There is also a continuous growth in numbers of such cooperative institutions in the district. The table given below shows financial position of cooperative institutions in Thane district: 143 Table 3.34 Financial status of cooperative institutions in Thane No. Particular Unit Year (Amount in thousands) 2009 2010 2011 2012 1 Number of societies No. 25389 26489 27576 28674 2 Membership No. 891606 902994 948143 1199400 3 Share capital 3.1 Statutory capital Rs. 17922 20432 21453 21453 Reserves and other 3.2 Rs. 6140559 6421638 6742720 7853840 funds 3.3 Total Rs. 6158481 6442070 6764173 7875293 4 Deposits Rs. 41437890 39266643 41229975 47326580 5 Working capital Rs. 12263127 12385758 16578637 55201873 6 Loans advanced Rs. 23894066 24133006 25339656 9465300 7 Profit 7.1 No. of societies No. 15096 15421 16192 14370 7.2 Amount Rs. 1237415 1251200 1314000 3140000 7.3 loss 7.4 No. of societies No. 7179 7459 7831 5745 7.5 Amount Rs. 1065961 107700 113000 1713000 No profit no loss 7.6 No. 3114 3619 3553 8559 societies Sources: as per table no.3.33 From the table given above it becomes clear that along with growth of the number of societies, there is also strengthening of the financial position of the 144 cooperative institutions of the district. The consoHdation of the various segments of cooperative institutions is reducing the number of loss malcing cooperatives and there is improvement in profitabihty of the institutions. It would be necessary to understand the distribution of cooperatives in different talukas of the district. The Table given below shows the distribution of the cooperative institutions in the district. Table 3.35 Taluka-wise distribution of cooperatives No. of cooperatives Tauka 2009 2010* 2011 2012 Talasari 33 13 39 39 Dahanu 252 68 272 288 Vikramgarii 59 10 63 63 Jawiiar 73 27 79 83 Mokhada 71 10 76 76 Wada 201 61 215 228 Palghar 868 127 974 1028 Vasai 4570 101 5081 5316 Thane 9031 450 9640 9890 Bhiwandi 658 89 736 777 Shahpur 475 117 517 553 Kalyan 6505 167 6545 6768 Ulhasiiagar 615 57 621 619 Ambernath 2219 38 2402 2621 Murbad 314 69 316 325 Total 25389 1404 27576 28674 Sources: as per table no.3.333 *ineludes only those cooperative institutions which are audited by the statutory auditors and not by the private auditors. The distribution of the cooperatives as per taluka shows that there is unequal distribution of the cooperative institutions. The highest number of cooperatives 145 is found in Thane taluka and the lowest in Talasari taluka. There is spectacular growth of the cooperatives in the district. The table given below deals with the statistics related to District Central Cooperative Bank: Table 3.36 Statistics Related to District Central Cooperative Bank (Rupees in thousands) I/: -a •a o G .s u S c "a a "Q. 'a. u a u o O •a 41 a a e CS o z u o S s c C/5 > s 3 I. ex z s o •S o C/3 o S in .J 1 2 3 4 5 6 7 8 9 10 11 (^1 o o 00 NO o ON 00 o 00 (N o NO oo ON uo (N VO o oo uo oo OO CNl NO NO sO r-J ON NO ON ro CNI O o o ON ir^ m o 1/0 o 00 00 oo o oo ro rl (^ ON o GN m (^1 to NO NO OO m (^1 ri NO o -^ ON oo Oi ri I/O oo o I/O oo ro ri I/O 00 in I/O r<0 I/O 00 NO NO I/O ON •5 ON o o O I/O NO -* ;^ OO oo rl rj I/O I/O ON •oo oo I/O ON O NO Sources: as per table no.3.33 46 From the above table it becomes clear that there is continuous growth of the branches of the District Central Cooperative Bank. There is also growth in financial transactions by the bank in the form of deposits, borrowings, loan disbursement etc. The financials position of the cooperatives in the district is important to be studied. The analysis of the cooperatives has been made in table given below related to Primary Agricultural Cooperative societies, Urban banks, Salary- earners societies and Other Urban Credit societies. The table given below deals with the statistics related to functioning of Primary Agricultural Cooperative societies in the district: Table 3.37 Primary Agricultural Cooperative societies in the district Particulars Primary Agricultural Cooperative societies Sr. (In Rs. Thousand) 2009 2010 2011 2012 1 Number of societies 291 291 290 291 2 Membership 167456 93851 92538 98049 3 Share capital 64043 44224 46431 93998 4 Reserves and other funds 32907 193104 202755 172714 5 Borrowings 227412 323607 339790 387272 6 Working capital 357077 837400 879269 507244 7 Loans advanced 311197 310851 326392 371430 Sources: as per table no.3.33 From the above table it is observed that though there is no significant increase in the number of the Primary Agricultural Cooperative societies in the district. 147 there are significant changes in the financial position of such societies. This is also because of the consolidation of this important segment of cooperatives. Along with the agricultural cooperative societies there are also significant changes in number and financial positions of non-agricultural cooperative societies viz; Urban Banks, Salary-earners societies and Other Urban Credit societies. The table given deals with the statistics related to functioning of Non- agricultural cooperative societies in the district: 148 Table 3.38 Statistics related to functioning of Non-agricultural cooperative societies in Thane Salary-earners Urban banks Others societies Particulars Sr. (In Rs. ON o o^ o CNl ON o O o O Thousand) O o o O o o o O O o O o ON) CNl r-4 -O t4-i IT; in ON in t-- NC oo t^ 1^ r~ 1 oc r-- r- oo o O 00 B u ^ .2 CNl CNI ON ON oc ON NO NC ON oo ON O ON CNl OC CNI 00 in '•n CO o 2 O en -* ON, '^ ON 00 ro in (N NO 00 ro m NO oc ON ON o NO ON ON ON 1^ 1> O CN) ON in NO in CNI oc O (N o o o^ ON O ON o o oc CNI in 3 oc ON NO ro O oc oc oc NO CNI NO C/3 3 oc NC '^ O ON m NC r- ro ON NO NO ON ro 00 OO ON o 1^ OC o oc in r- o NO o NO (N (N S o c in m in OC CNI NO NO 4 NO (N o ON, ON OC (N NO CNI r- in NO 00 ON o (^1 NC ON NO OC in ON ON ON o 1^ in ON so _^ ON, o NO o CNI ON OO O OC ON OC in ON O ON NO NO -3 •- o O 6 o ON in in OC O 03 O IT-, (N ro OC oc (N OC O ON m oc ON CNI CN NC ON in oc O o O (^1 r-l O o ro NC ON O ro oc CNI ON ON OC OC oo ro 7 NO OC' o~ O O « oc in NO ON oc o CO ^, c CNJ ro ON oc 5 Sources: as per table no.3.33 From the above table it is clear that like agricultural cooperative societies, the non-agricultural cooperative society segment is also undergoing consolidation. There is negative growth in the numbers of the societies however, there is strengthening of the financial positions of the societies in recent years. 149 3.7 Development of Banking system in India with Special Reference to Public Sector Banks Introduction: Banking system is placed at the centre of any economic activity. The health of banking system has far reaching effects on functioning of the economy. Banking system performs a very crucial role of mobilisation of deposits and allocating them for the productive purposes. Through this function of capital formation it helps in production in the economy. Thus, a financial system plays an important role in bringing about rapid economic growth of the economy. CuiTent banking system in hidia can be well studied by understanding different phases of the development of banking in India as given below. A Historical Perspective: Evolution of Banking System In India: Traditionally, the banking system in India is viewed with reference to the indigenous bankers like money lenders who were involved in money lending activities. However, this can be viewed as unorganised banking system. The modern banking system is considered as a part of organised financial system. The first bank in India was established in 1786. From 1786 till today, the journey of Indian Banking System can be divided into three distinct phases. They are as mentioned below: Phase-l(from 1786 to 1969) 150 Phase-II (Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms) Phase-Ill (New phase of Indian Banking System after 1991 with the Banking Sector Reforms) • Phase:I (1786 to 1969) This phase is related to the British rule in India and the evolution of modern phase of banking stared with formation joint stock companies dating back to 1786 (with establishment of General Bank of India in 1786). Next there were Bank of Hindustan and Bengal Bank which were also joint stock companies. In 1806. the East India Company established first Presidency Bank in Kolkata called " The Bank of Culculta Ltd." It received Royal Charter in 1809 and renamed as "The Bank of Bengal'. On these lines two more Presidency Banks were established viz; Bank of Bombay (1840) and Bank of Madras (1843) as independent units. Thus, there were no legally recognised commercial banks other than the Presidency Banks during this phase. These Presidency banks issued their own currencies within their respective provinces. However, The Paper Currency Act of 1861 abolished the right to issue currency notes by the Presidency Banks and Government was bestowed with the power to issue currency notes as an only authority. Upto the year 1919, these banks had 70 branches (The Bank of Bengal with 26 branches, The Bank of Bombay with 18 branches and The Bank of Madras with 26 branches) and they were mostly established in port towns. However, these three banks were merged together in 1920 and Imperial Bank of India was established (Under the Imperial Bank of 151 India Act, 1920) which started as private shareholders banks, with majority of Europeans shareholders. A directive was issued to this bank to open 100 branches (in five years) in potential towns in India for the improvement of trade and business. The objective behind the formation of the Imperial Bank of India was to establish it as the Central Bank of India and it was allowed to discharge all the functions of the central bank like currency and credit, Public debt, Banker's Bank, Management and issues of securities and bonds. facilitator to remittances to public etc. However, the Hilton-Young Commission (1926) suggested creation of a separate bank to act as the Central Bank of a country and proposed to be named as 'The Reserve Bank of India". In 1865, Allahabad Bank was established (first time exclusively by Indians). Further, Punjab National Bank was set up in 1894 with headquarter at Lahore. Between 1906 and 1913 some other large banks of today such as Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came into existence in 1935. Table 3.39 Bank failures (1913-1918) Year No. of bank failures 1913 12 1914 42 1915 11 1916 13 1917 9 1918 7 Sources: Banking statistics and Annual reports, various issues. 152 During the first phase, the growth in banking was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small banks. During those days public had low confidence in banks because of which growth in deposit mobilisation was very slow. As against this, the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds provided by the banks then were largely given to traders and firms. The Banking Crisis of i913, revealed the weakness of banking systems in India such as low proportion of cash and liquid assets, unsecured advances to directors and so on. In order to investigate the issue of failures of banks the Indian Central Banking Inquiry Committee (1929-1931) was appointed. On the strong recommendation of the committee, to restructure the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 and accordingly. The Reserve bank of India was formed on April 1, 1935 as the Central Banking Authority. Phase-II (Nationalisation of Indian Banl Despite the provisions, control and regulations of the Reserve Bank of India, banks in India as seen above, except the State Bank of India (SBI), the banks were continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important instrument to facilitate the development of the country. Indira Gandhi, the then Prime Minister of India, 153 expressed the intention of the Government of India of bank nationalisation in the annual conference of the All India Congress Committee Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The meeting received the paper with enthusiasm. Thereafter, her move was speedy and sudden. The Government of India issued an ordinance ('Banking Companies Acquisition and Transfer of Undertakings Ordinance, 1969') and nationalised the 14 largest commercial banks with effect from the midnight of 19 July 1969. Tnese banks contained 85 percent of bank deposits in the country. Jayaprakash Narayan. a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. A second dose of nationalisation of 6 more commercial banks followed in April 1980. The stated reason for the nationalisation was to give the government more control of credit delivery. With the second dose of nationalisation, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalised banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at an annual pace of around 4%, closer to the average growth rate of the Indian economy. However, it is to be noted that Government had taken a few major steps in Indian Banking Sector Reform after independence. In 1955, it nationalized 154 Imperial Bank of India with objective to expand banking facilities on a large scale especially in rural and semi-urban areas. There was formation of State Bank of India to act as the principal agent of Reserve Bank of India and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India were nationalized in 1960. On 19th July, 1969, major process of nationalisation was carried out. Table 3.40 Name of the banks nationalised in 1969 Sr.no. Name of the banks nationalised 1 Central Bank of India 2 Bank of Maharashtra 3 Dena Bank 4 Punjab National Bank 5 Syndicate Bank 6 Canara Bank 7 Indian Bank 8 Indian Overseas Bank 9 Bank of Baroda 10 Union Bank 11 Allahabad Bank 12 United Bank of hidia 13 UCO Bank 14 Bank of India 155 The important steps taken by then government during process of nationalisation can be Hsted as given below: 1955 Nationalisation of State Bank of India. 1959 Nationalisation of SBI subsidiaries. 1969 Nationalisation of 14 major banks. 1980 Nationalisation of seven banks with deposits over Rs.200 crores. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country during this phase: 1949 Enactment of Banking Regulation Act 1955 Nationalisation of State Bank of India 1959 Nationalisation of SBI subsidiaries 1961 Insurance cover extended to deposits 1969 Nationalisation of 14 major banks 1971 Creation of credit guarantee corporation 1975 Creation of regional rural banks 1980 Nationalisation of seven banks with deposits over Rs.200 core 156 The following are the Scheduled Public Sector Banks in India: Table 3.41 Scheduled Public Sector Banks in India Sr. No. Name of the Scheduled Public Sector Bank 1 State Bank of India 2 State Bank of Bikaner and Jaipur 3 State Bank of Hyderabad 4 State Bank of Indore 5 State Bank of Mysore 6 State Bank of Patiala 7 State Bank of Saurashtra 8 State Bank of Travancore 9 Allahabad Bank 10 Andhra Bank 11 Bank of Baroda 12 Bank of India 13 Bank of Maharashtra 14 Canara Bank 15 Central Bank of hidia 16 Corporation Bank 17 Dena Bank 18 Indian Overseas Bank 19 Indian Bank 20 Oriental Bank of Commerce 21 Punjab National Bank 22 Punjab and Sind Bank 23 Syndicate Bank 24 Union Bank of India 25 United Bank of India 26 UCO Bank 27 IDBI Bank Ltd. 157 After the nationalisation of banks, the branches of the pubHc sector bank India rose by approximately 800% in deposits and advances took a huge jump by 11,000% in last for decades. Thus, Banking in the sunshine of Nationalisation (Government ownership) gave the boost to public faith and immense confidence about the sustainability of banking institutions. Table 3.42 Progress of Commercial banks in India (1969-1991) Year No. of Banks No. of Branches Population per bank office 1969 73 8262 64000 1980 157 324129 20000 1991 272 60570 14000 Sources: Same as table no.-l Phase-Ill (New phase of Indian Banking System after 1991 with the Banking Sector Reforms) hi the earlier sections it has been seen that the Banking activity after independence was mainly a state activity. The government ownership was completed in stages. The Reserve Bank of India was nationalized in 1949. It was followed by nationalization of Imperial Bank of India in 1955 [Now known as the State Bank of India]. In July 1969, 14 major commercial banks having assets in excess of Rs. 50 Crore were nationalized. In April 1980, six more banks having assets in excess of Rs. 200 Crore were nationalized. Banking business in India was a near monopoly of the Government until the introduction of economic reforms. Indian Banking system was a highly regulated due to which the customer service i.e. both borrowers as well as 158 depositors had suffered. With the help of financial sector reforms an attempt was made to overcome these weaknesses. Thus, since nationalisation of banks in 1969, the banking sector had been dominated by the public sector. There was financial repression, role of technology was limited, no risk management etc. This resulted in low profitability and poor asset quality. The country was caught in deep economic crises. The Government decided to introduce comprehensive economic reforms. Banking sector reforms were part of this comprehensive package. The landmark development of this phase was the formation of Committee under the chairmanship of M. Narsimham, Ex-Governor of Reserve Bank of India to deal with the major factors that contributed to deteriorating bank performance that included too stringent regulatory requirements (i.e., a cash reserve requirement [CRR]and statutory liquidity requirement [SLR] that required banks to hold a certain amount of government and eligible securities); low interest rates charged on government bonds, directed and concessional lending; administered interest rates; and lack of competition. These factors not only reduced incentives to operate properly, but also undermined regulators" incentives to prevent banks from taking risks via incentive-compatible prudential regulations and protect depositors with a well-designed deposit insurance system. While government involvement in the financial sector can be justified at the initial stage of economic development, the prolonged presence of excessively large public-sector banks often resulted in ineftlcient resource allocation and concentration of power in a few banks. 159 Thus, the committee suggested measures to improve efficiency of the financial system especially, banking system. The committee also recommended steps to strengthen banking system and increase competitiveness in the banking sector. This phase introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M. Narasimham, the committee thus, worked for the liberalisation of banking sector. The far reaching effects of recommendations of the committee have resulted into flood of foreign banks and, their ATM stations, technological upgradation, improvement in profitability and reduction in NPAs, control over the issue of over staffing and so on. On the lines of recommendations of the committee, efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and speedy. Time is given more importance than money. Thus, The Government of India appointed a committee under the Chairmanship of Mr. M. Narasimham (the former Governor of RBI) in July 1991 to examine India's financial system and to recommend improvements in the working of the financial system. This is known as the Committee on Financial Sector Reforms. This was followed by another committee under his Chairmanship in 1998. The second committee was asked to look in to the progress of reforms till 1998 and to lay a course for further reforms. This committee is known as Committee on Banking Sector Reforms, 1998. The Reports of these two committees form the basis for reforms in the Indian banking sector. To promote healthy development of financial sector, the Narasimhan committee made 160 recommendations in its report (1991) like Establishment of four-tier hierarchy for banking structure with 3 to 4 large banks (including SBI) at top and at bottom rural banks engaged in agricultural activities, the supervisory functions over banks and financial institutions can be assigned to a quasi-autonomous body sponsored by RBI, phased reduction in statutoi7 hquidity ratio, phased achievement of 8% capital adequacy ratio, abolition of branch licensing policy, proper classification of assets and full disclosure of accounts of banks and financial institutions, deregulation of interest rates, delegation of direct lending activity of IDBI to a separate corporate body, competition among financial institutions on participating approach, Setting up asset Reconstruction fund to take over a portion of loan portfolio of banks whose recovery has become difficult etc. However, RBI introduced the Second Phase of Banking Sector Reforms based on Narasimham Committee Report 1998. To make banking sector stronger the government appointed Committee on banking sector Reforms under the Chairmanship of M. Narasimhan. It submitted its report in April 1998. The Committee placed greater importance on structural measures and improvement in standards of disclosure and levels of transparency. The reforms in second phase included suggestions like: a strong banking system especially in the context of Capital Account Convertibility (CAC). The Committee cautioned the merger of strong banks with weak ones as this may have negative effect on stronger banks, two or three large banks should be given international orientation and global character, there should be 8 to 10 national banks and 161 large number of local banks, new and higher norms for capital adequacy, To take over the bad debts of banks committee suggested setting up of Asset Reconstruction Fund, A board for Financial Regulation and supervision (BFRS) can be set up to supervise the activities of banks and financial institutions, review and amend of the provisions of RBI Act, Banking Regulation Act, etc. to bring them in line with current needs of industry. Net Non-performing Assets for all banks was to be brought down to 3% (by 2002), Rationalization of bank branches and staff was emphasized. Licensing policy for new private banks can be continued, foreign banks may be allowed to set up subsidiaries and joint ventures. On the recommendations of Narasimhan Committee, the government undertook measures since 199] such as: reductions in CRR and SLR rates. prudential norms have been started by RBI in order to impart professionalism in commercial banks. The purpose of prudential norms include proper disclosure of income, classification of assets and provision for bad debts so as to ensure that the books of commercial banks reflect the accurate and correct picture of financial position. 100% provision for all Non-perfomiing Assets (NPAs), achievement of capital Adequacy norms, deregulation interest rates and phasing off of administered rates of interest, passing of "•Recovery of debts due to Banks and Financial Institutions Act 1993" in order to facilitate and speed up the recovery of debts due to banks and financial institutions, setting up of Six Special Recovery Tribunals, allowing more number of New Private Sector Banks to bring about Competition, phasing out of the directed credit 162 programme, reduction of credit target for priority sector to 10% from 40%, amendment of The Banking Companies (Acquisation and Transfer of Undertalcings) Act to enable the banks to raise capital through public issues, freedom to open new branches and upgrade extension counters after attaining capital adequacy ratio and prudential accounting norms, permission to banks to close non-viable branches other than in rural areas, setting up of Local Area Banks for mobilizing rural savings and in channelling them in to investment in local areas, setting up of a Board of Financial Supervision with an advisory Council to strengthen the supervision of banks and financial institutions, opening up of New areas for bank financing such as Insurance, credit cards, asset management, leasing etc, introduction of new instruments For greater tlexibility and better risk management like Interest rate swaps, cross currency forward contracts, forward rate agreements, liquidity adjustment facility etc, strengthening of technology infrastmcture for payment and settlement system with electronic funds transfer, centralized fund management system etc, Measures are taken to increase the flow of credit to priority sector through focus on Micro Credit and Self Help Groups, Increase in FDl Limit in Private Banks, introduction of Risk Based Supervision of banks with best international practices in accounting systems, corporate governance, payment and settlement systems, introduction of online banking, E-banking, internet banking, telephone banking etc. taking up of measures such as Corporate Debt Restructuring (CDR). Debt Recovery Tribunals (DRTs) and Lok Adalts etc, managerial 163 autonomy package for public sector banks to provide them a level playing field with private sector banks in India etc. Table 3.43 Prog ress of Public Sector Banks in India Year No. of offices Deposits (in Rs.cr.) Credit (in Rs.cr.) 1969 6669 38970 30346 1981 28029 366920 242138 1991 42938 175598 106118 2001 47377 744424 405430 Source: Report on Trends and Progress of Banking in India (various years). With respect to improvement in efficiency of public Sector banks and its importance in the current scenario of Indian tuiancial system, some of the important steps are worth mentioning. Implementation of Core Banking service'^^ facility and adoption of BASEL"' norms by the public sector banks along with steps taken towards financial inclusion in the form of ATMs (Automated Teller Machines), Internet Banking, Phone and SMS banking facility etc. has improved efficiency of Public Sector Banks, has improved profitability of the banks and also helped in expanding banking services in unbanked areas through implementing various government schemes like Aadhar linked bank account. Pradahnmantri Jan-Dhan Yojana etc. In this regard as quoted in the Econonnc Survey (2014-15)'' "Jan Dhan Yojana, Aadhaar, Mobile (The JAM Number Trinity) can enable the State to transfer financial resources to the poor in a progressive manner without leakages and with minimal distorting effects". Public Sector Banks have also adopted policy of Mergers and Acquisition of not only other weak Public Sector Banks but 164 v^/S'Pu; also of Private and Cooperative banks. The table given below deals with mergers and acquisition by Public Sector Banks in India. Table 3.44 Bank mergers with reference to Public Sector bank Merger Target bank Acquirer Year 1993 New Bank of India Punjab National Bank 1994 BankofKarad Ltd Bank of India 1995 Kashinath Seth Bank State Bank of India 1996 Punjab Co-op Ltd. Oriental Bank of Commerce 1997 Bari Doab Bank Oriental Bank of Commerce 1999 Bareilly Co-op Ltd Bank of Baroda 1999 Sikkira Bank Ltd. Union Bank of India 2002 Banaras State bank Ltd Bank of Baroda 2003 Nedungadi Bank Ltd Punjab National Bank 2004 IDBI Bank Ltd Industrial development bank of India 2004 South Gujarat local area baiik Bank of Baroda 2004 Global Tmst Bank Oriental bank of commerce Industrial Development Bank Of 2006 United Western Bank India (IDBI) 2007 Bharat Overseas Bank Indian Overseas Bank Shree Suvarna Sahakari Bank 2008 Indian Overseas Bank Limited Source: RBI Annual Reports (for various years). Figure 3.4 Banking system in India fe!:-e~"v3 Bank of India Supreme monetory authority/ The central banking authority Commercial Co Banks operatives Foreign Regional Rural Banks Banks Urban Co State Co operatives operatives Public Private sector Sector Banks Banks 165 The financial system of India has shown a great deal of flexibiUty. It is shehered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, high foreign reserves, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure. Figure 3.5 Structure of Indian Money Marliet Organised Unorganised Call and Indigenous Notice Mo]iev Bankers Market Treasuiy BUI Money Market Lenders Non-bankmg Financial Institutions Certificate of Deposits Money Market Mutual Funds 166 Thus, in the early 1990s, the then government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (later renamed as Axis Bank), ICICI Bank and HDFC Bank, Kotak Mahindra Bank, Yes Bank. This move, along with the rapid growth in the economy of India, revitalised the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for foreign direct investment, where all foreign investors in banks may be given voting rights which could exceed the present cap of 10% at present. It has gone up to 74% with some restrictions. However, the Economic Survey (2014-15) has observed foUowmg challenges that the banking segment in India is facing currently: • The Indian banking balance sheet is suffering from 'double financial repression'. On the liabilities side, high inflation lowered real rates of return on deposits. On the assets side, statutory liquidity ratio (SLR) and priority sector lending (PSL) requirements have depressed returns to bank assets. As inflation moderates and the banking sector exits liability-side repression, it is a good time to consider addressing the asset-side counterpart. 167 • In a cross-country comparison, controlling for the level of development, the size of the Indian banking system, measured by credit indicators, does not seem too high either in absolute terms or relative to other sources of financing. However, going forward, capital markets and bond-financing need to be given a boost. • Private sector banks did not partake in the biggest private-sector-fuelled growth episode in Indian historyduring 2005-2012. This is reflected in the near-constant share of private sector banks in deposits and advances in those years. • There is substantial variation in the performance of the public sector banks, so that they should not be perceived as a homogenous block while formulating policy. 3.8 Summary: Primary Cooperative Banks, popularly known as Urban Cooperative Banks (Urban Cooperative Banks) are registered as cooperative societies under the provisions of, either the State Cooperative Societies Act of the State concerned or the Multi State Cooperative Societies Act, 2002. They are regulated and supervised by the Registrar of Cooperative Societies (RCS) of State concerned or by the Central Registrar of Cooperative Societies (CRCS), as the case may be. The applicability of banking laws to cooperatives societies since March 1, 1966 ushered in "duality of control" over Urban Cooperative Banks between the Registrar of Cooperative Societies/Central Registrar of Cooperative Societies and the Reserve Bank of India. The Reserve Bank regulates and 168 supervises the banking functions of Urban Cooperative Banks under the provisions of Banking regulation Act, 1949(AACS). Within the Reserve Bank, a separate department, viz. Urban Banks Department, has been entrusted with these functions. Urban Banks Department functions in close coordination with other regulators viz., RCSs and CRCS. The functions of the department can be broadly divided into (i) regulatory (ii) supervisory and (iii) developmental. Urban Cooperative Banks are required to channelize 60 per cent of total loans and advances towards priority sector. Furthermore, within the priority sector lending, lending to weaker sections should constitute 15 per cent of the total loans and advances of Urban Cooperative Banks. Fulfilment of priority sector lending targets by individual Urban Cooperative Banks are taken into consideration by the RBI while granting permission for branch expansion. expansion of areas of operation, scheduled status, etc. "Tor a long time, the state's planners have been working on decongesting Mumbai by encouraging neighbouring areas like Navi Mumbai, Thane, Kalyan-Dombivali, Mira-Bhayandar and Vasai-Virar, all of which are in Thane district.... The population of Mumbai Metropolitan Region (MMR). that includes Mumbai and Thane districts, is now second only to Tokyo's urban agglomeration. The population gi-owth in Thane was encouraged due to unaffordable real estate prices in Mumbai and infrastructure investment by the state. The comparatively affordable land prices have made the 9558 sq. km. landmass emerge as the district with the highest population growth in the state in the last decade. For years, areas like Navi Mumbai, Thane, Kalyan- 169 Dombivali, Mira-Bhayandar, Vasai-Virar, Bhivandi, Ulhasnagar, Ambernath, Badalapur, Dahanu, Shahpur and Wada have been turned as back-of-the- beyond, but affordable property prices in a spectrum of Rs. 2000-4000 per sq.ft. and the promise of investment of Rs. One lakh crore in the next two decades to improve transport services to the region, has meant the state government's plan of dividing population away from Mumbai seems to be reaping benefits. In his address to a press conference at Malabar Hill. Director of Census Operations Ranjit Singh Deol said, "the district (Thane) has seven municipal corporations under it, which signifies its size. The urbanised nature of this area too has attracted populations" . Development of Commercial Banks in general and Public sector Banks in particular has undergone various phases in hidia. The Nationalisation of banks in hidia led to emergence of regime of Public sector banks. However, the phase of consolidation and improving efticiency and profitability of public sector banks currently is due to factors like adoption of Libralisation. Privatisation and Globalisation since 1991. Notes and References: 1 Dr.Dilip Chellani, An Analysis of Working of a Central Cooperative Bank, Indian Cooperative /^cr/eiv.Oct. 1998,p. 1. " Balvinder Singh, Cooperative Credit (1990), Deep and Deep Publication Pvt. Limited. New Delhi, P.7. ' as defined in the State Cooperative Society Acts of respective states. The Report of the Committee on Urban Cooperative Banks (1990), RBI, Mumbai. 170 '' The Report of the Committee on Licensing of New Urban Cooperative Banks (1992), RBI, Mumbai. '' Conversion of Cooperative Credit Societies into Urban Cooperative Bank, RBI Publication (1999), Mumbai. ^ O.P.Sharma, History of Urban Cooperative Banks In India, (2002), History Cell, RBI Publication. ' Report of the Working Group on Systems and Procedures of Audit in Urban Cooperative Banks (1996), RBI, Mumbai. Mandira Sarma, Cooperating Development In India, (2007), Indian Council for Research on International Economic Relations (ICRIER), New Delhi, p.4. '" K. K. Tripathy and Sudhir K. Jain, Cooperation for the Rural Poor, (2009), Global Institute of Flexible Systems Management, p.52 ^^Economic Survey of Maharashtra (2010-11), Director of Economics and Statistics, Government of Maharashtra, Mumbai. Gazzateers of Thane District, Report on Baid 171 Basel II: Basel II was introduced in 2004, laid down guidelines for capital adequacy (with more refined definitions), risk management (Market Risk and Operational Risk) and disclosure requirements and use of external ratings agencies to set the risk weights for corporate, bank and sovereign claims. Basel III: The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage, funding and liquidity. Government of India, Economic Survey (2014-15), Government of India Publication, New Delhi. '^Op.cit. ' Hindustan Times, Mumbai, April 02, 2011. 20 ^ •. Op.cit. 172