the stark reality that cooperatives, despite all the widespread presence in villages, and the attention and encouragement received, did achieve pretty little. they just contributed to 3. 1 % of the credit needs of the villagers, as can be seen from table 1 below : bis central bankers ’ speeches 34. this led them to conclude, with the famous saying, “ cooperation has failed ; but it must succeed ”. cooperatives in second half of 20th century 35. the next half century received quite a lot of rhetoric. i had quoted them before viz., about making the cooperative approach the common thinking of india, dependence of the whole future of india on the success of cooperative movement, building cooperative movement being the central aim of national policy as a part of planned development, cooperatives to be the principal basis of organising economic activity, etc. 36. what has been the effect? of course, there was impact. cooperatives did deliver. as can be seen from table 1, their contribution to rural credit increased gradually from the 3. 1 % in 1951 to an impressive 27. 3 % in 2002. and, as i mentioned in part i, today, the short term cooperative credit structure has 32 state cooperative banks and 371 district central cooperative bis central bankers ’ speeches banks operating through 14907 branches and there were 92, 996 primary agricultural credit societies ( pacs ) as on march 31, 2014 at the grass root level. the combined balance sheet, as on march 31, 2015, of all state cooperative banks stood at ₹ 1. 98 lakh crore and that of the district central cooperative banks at ₹ 4. 06 lakh crore. their gross npa stood at 4. 8 % and 9. 1 % respectively as on march 31, 2015. their combined net profits were ₹ 1, 005 crore and ₹ 793 crore respectively. 37. are we satisfied with this? of course not. why? first of all, these numbers hide wide variation among the 32 stcbs and the 371 dccbs, whether in terms of financial strength, profitability, efficiency or asset quality. secondly, there are variations among regions as well, be it in terms of the number, growth, strength, performance and asset quality. thirdly, as on march 31, 2015, there were as many as 13 stcbs and 163 dccbs with capital to risk assets ratio ( crar ) below the prescribed 9 %. their governance position has added to the worry. cooperatives

site atms and internet banking and permission to stcbs / dccbs for investment in market infrastructure companies like npci, ccil, etc. with a view to speeding up approvals, we have delegated powers to our regional offices in most of these areas. financial performance of state and central cooperative banks 13. today the stcbs and dccbs display a reasonable financial strength. their combined capital and reserves stood at ₹ 20. 1 thousand crores for the stcbs and ₹ 51. 04 thousand crores for the dccbs as on march 31, 2015. the combined balance sheet, as on march 31, 2015, of all state cooperative banks stood at ₹ 1. 98 lakh crore and that of the district central cooperative banks at ₹ 4. 06 lakh crore. their gross npa stood at 4. 8 % and 9. 1 % respectively as on march 31, 2015. their combined net profits were ₹ 1, 005 crore and ₹ 793 crore respectively. bis central bankers ’ speeches bis central bankers ’ speeches 14. asset quality of stcbs / dccbs have improved over the last three years as may be seen from the fall in the percentage of npas between 2013 and 2015. however, the percentage of recovery to demand is a concern since it is showing a declining trend. there are wide variations region - wise too. in 2014, npas of stcbs varied between 1. 93 % in northern region and 17. 12 % in north - eastern region. in respect of ccbs, it was 5. 27 % in northern region and 10. 98 % in eastern region. during the same year, percentage of recovery to demand was 97. 9 in northern region and 49. 10 in north - eastern region for stcbs. recovery to demand was 83. 16 % in northern region and 67. 23 % in eastern region in respect of ccbs. issues and challenges 15. some of the major issues to be addressed by the cooperative banking sector relate to governance, management, sound capital base, technology, risk management and frauds. we have prescribed fit and proper criteria for chief executive officers of stcbs and ccbs. the constitution ( 97th amendment ) act mandates appointment of at least two professional directors in the boards of cooperative banks. the act has also covered other issues aimed at improving governance and autonomous functioning of cooperative societies such as engagement of professionally qualified auditors, tenure of board, conditions for supersession