In a significant move to strengthen financial inclusion across India, Union Home Minister and Minister of Cooperation Amit Shah has announced that all cities with a population exceeding two lakh will soon have cooperative banks. This ambitious plan aims to revolutionize the banking landscape in urban areas while boosting the cooperative sector.
Expanding Cooperative Banking Network Nationwide
The announcement came during Amit Shah's address at the 16th Indian Cooperative Congress in New Delhi. The Union Minister revealed that there are currently 54 cities across India with populations over two lakh that lack cooperative banks. This gap in financial infrastructure will now be addressed systematically through government intervention.
Shah emphasized that the cooperative movement has historically played a crucial role in India's economic development, particularly in rural areas. However, urban centers have remained relatively underserved by cooperative banking institutions. The new initiative seeks to correct this imbalance and extend the benefits of cooperative banking to urban populations.
Comprehensive Strategy for Cooperative Sector Growth
The Union Minister outlined a multi-pronged approach to strengthen the entire cooperative ecosystem. Among the key announcements was the establishment of a National Cooperative Database, which will serve as a comprehensive repository of information about cooperative societies across the country.
Shah also disclosed that the government has identified approximately 65,000 active Primary Agricultural Credit Societies (PACS) that will be computerized and connected to the National Bank for Agriculture and Rural Development (NABARD). This digital transformation aims to enhance operational efficiency and transparency within the cooperative credit structure.
Additionally, the government plans to develop model bylaws for PACS, enabling them to diversify their activities beyond traditional agricultural lending. This expansion will allow these societies to engage in various business activities, making them more sustainable and responsive to community needs.
Strengthening Financial Inclusion and Economic Development
The establishment of cooperative banks in all major urban centers represents a strategic move to enhance financial inclusion. These banks will provide accessible banking services to urban populations, including small business owners, self-employed individuals, and middle-income households who may find traditional commercial banks less approachable.
Amit Shah highlighted that the cooperative sector has shown remarkable resilience and growth, with its contribution to the national economy increasing from Rs. 75,000 crore to an impressive Rs. 1,25,000 crore. This growth trajectory underscores the sector's potential to drive economic development at both regional and national levels.
The Minister also pointed to the success of recent initiatives in the cooperative space, including the establishment of three new multi-state cooperative societies focused on seeds, exports, and organic products. These entities have already begun making significant contributions to their respective sectors, demonstrating the viability of the cooperative model in diverse economic activities.
As India continues its journey toward becoming a $5 trillion economy, the strengthening of the cooperative banking network is expected to play a vital role in mobilizing savings, providing credit, and supporting economic activities across urban and rural landscapes alike.
