Page 22 - Banking Finance January 2018

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No income tax exemption Bill a bane: Visakhapatnam Coop Bank chairman

to cooperative banks: Chairman Emeritus of The Visakhapatnam Cooperative Bank Limited Manam
Anjaneyulu said that the proposed Financial Resolution and Deposit Insurance
govt tells Lok Sabha Bill-2017 (FRDI-2017) would register a negative impact on the finance sector.
The government ruled out giving in- Bringing the entire financial houses, including SEBI, Insurance, and Pensions under
come tax exemption to profit-making the FDRI-2017, would damage the economy, he warned.
cooperative banks saying they func- Addressing the media, Manam Anjaneyulu said already people are expressing
tioned like commercial banks and several doubts about the safety of their deposits. In order to minimise the RBI
should be treated on par. role in the banking industry, the NDA government has proposed the FRDI Bill
Finance Minister Arun Jaitley said in and indirectly the government was trying to hold its grip on the banking indus-
Lok Sabha that the cooperative try, he alleged.
banks functioned like any other com- With the government influence in the banking industry, the entire Indian economy
mercial bank and the principle of would badly affect. The government is trying to hold its grip in the share market
mutuality, which is central to grant- also, he pointed out. Already, several national banks incurred huge losses. With
ing exemption under Section 80P of the FRDI Bill, the RBI role would be minimised and the banks should run the
the Income Tax Act, does not apply business as per the government's directives. The Union Cabinet had already
to them because their area of opera- passed a resolution to merge 27 banks to make them into four banks.
tions extends even to non-members.
Chairman of Srikanakamahalakshmi Urban Bank said that there are 1,574 coop-
"Income tax is a tax on profits and erative banks in the country and with the FRDI Bill, the entire cooperative bank-
there is no rationale for exempting ing system would be collapsed.
profit-making cooperative banks
from payment of income tax," he said Nashik Dist Central Co-operative Bank dissolved
during Question Hour.
Nashik, Dec 30 (UNI) Taking action against the Nashik District Central Coopera-
Jaitley said most of these banks pro- tive Bank (NDCC) for alleged illegal recruitment, the Reserve Bank of India on
vided standard banking facilities such Saturday dissolved the NDCC Bank, while placing a Government Administrator
as opening of letters of credit, bill dis- on its management. According to sources, the RBI took action against the NDCC
counting and collection, lockers and Bank under Banking Regulation Act 88 and 83.
safe deposit vaults and bank
BJP's K D Aher was recently elected as Chairman of NDCC Bank, which was un-
guarantees."These banks are thus no der cloud for alleged illegal recruitment of staff.MLC Apurva Hiray had also raised
different from commercial banks and the recruitment issue during the Winter session of State Legislature, here.Joint
therefore are required to be treated Registrar Milind Bhalerao was appointed as the Government Administrator on
at par with them," he said.
NDCC bank.

22 | 2018 | JANUARY | BANKING FINANCE

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