Current Affairs - State - Discussion

The Cooperative department of Punjab has decided to merge 20 District Central Cooperative Banks (DCCBs) with the Punjab State Cooperative Bank (PSCB). The aim of the merger is to strengthen the state's rural credit system and facilitate farmers taking credit from cooperative banks. The 20 DCCBs were having 804 branches across the state and were facing a loss of Rs 700 crore. With the merger, the DCCBs would now be able to use the branches of the PSCB and function like other commercial banks. The decision was taken in view of RBI guidelines, which mandate that all DCCBs should have a Capital to Risk Weighted Assets Ratio (CRAR) of 9 per cent. At present the DCCBs are adhering to the required CRAR of 9 per cent, but there was hardly any space for majority of these DCCBs to enhance their business and to increase their profitability.