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Getting Co-operation

May 22, 2006 (LBO) – More than 25 co-operative societies have responded positively to the government's call to revamp their banking units, Commissioner of Co-operatives Leslie Tissera said. Co-operative banking units have more than 20 billion rupees in public deposits, but the sector is under capitalised and poorly regulated.

Tissera's office has sent out proposals to reform the co-operative banking sector to 306 societies over the past two weeks.

The Asian Development Bank (ADB) sponsored reforms looks at splitting the trading and banking activities, with separate balance sheets.

While each unit will have a separate manager, a single chief executive officer would oversee both activities.

Earlier some co-operatives objected to divorce banking activities from the main multi-purpose co-operative society. The restructuring is financed by the ADBs Rural Finance Sector Development project.