Monday , 22 January 2018
‘Urban credit societies lack dedicated attention from the apex body’
One of the largest credit societies, VPK Urban Co-operative Credit Society is often in the news for its speedy and original ways of doing business. Here Surya S Gaude, chairman talks to Nirgosh Gaude on range of issues. He says that loan recovery is going to be the focus in the current year and all is well at last

‘Urban credit societies lack dedicated attention from the apex body’


  1. What is your current position in terms of operations?

VPK Urban Cooperative Credit Society is one of the top most credit society’s in the state having 90,000 share holders and around 40 branches in the state. Over the last 24 years the society has managed to gain the confidence of the people and has made best use of the money deposited by them. After the mining ban in the state the business has become slow and profit margin has reduced drastically. But people’s faith in the society has been a plus point for sustainable growth in the past and also currently. 


  1. How strong are the finances and day-to-day business?

The Society has around Rs 750 crore by way of deposits, around Rs 39 crore as share capital and the loaned amount is around Rs 630 cores. Along with that VPK has earned profits of around Rs 2.30 crore in the last financial year and this year the budgeted profit is of around Rs r crore. The staff strength is around 300 people and about 150 pigmy agents.


  1. What are the new plans of the society for this year and what will be focus?

Considering the slow business of the society, VPK has no plans for new ventures or branch openings. The members have decided to focus on proper loan recovery this year to increase the profit margin.  VPK has around Rs 630 crore loaned amount and recovery of it is huge task. Presently loaning business is slow so we are trying to offset it with proper recovery.


  1. Are there any special plans or strategy for proper loan recovery?

The society already has two government officers deputed for loan recovery. One is the assistant registrar and the other a recovery officer.  Beside it has its own recovery department. Along with that there are managers and staff from all the branches for recovery.


  1. What according to you is the biggest plus point society which makes VPK better than the others?

Since beginning the society follows the policy of giving loaning powers in the hands of the staff. The board members are not getting directly involved in granting loans. So dedicated staffs are the real assets of the society and they work as if it is their own society. Along with that hassle free loan service and people’s trust is what makes us better than the rest. Many societies fail because the board members try to keep all the powers in their own and treat staff as mere workers. But VPK has distributed powers within the staff in such a way that it benefits the society’s business.


  1. What is present situation in Goa’s cooperative sector?

Presently there are a lot of cooperative societies in the state and there is ample scope for growth of the sector. Compared to all types of cooperatives the situation of credit societies is better and it receives good involvement of local people. But ground level work is required for development of the entire sector.


  1. Even though there are a lot of cooperative societies in the state, only few are successful or have grown big. What is the reason behind it.?

It’s true that only few societies in the state have managed to turn into successful or profitable ventures while the rest has disappeared in the crowed. Lack of training in the field of cooperation and absence of financial management is major cause behind it. A cooperative sector the common man’s sector and it needs a lot of ground level work. Any society to run successfully needs good connect with the people. Along with that trained staff and experienced co-operators are also the requirements for success.


  1. Whose is responsible for the cooperative and financial management training?

Earlier the Goa State Cooperative Association was actively involved in imparting training. But in last few years the activity of the association has reduced. The state government is also slow in starting training programmes. Till date there has not been much activity on the training front. After several years the government has given Sahakar Bhavan building dedicated for the sector but activities in the Bhavan have not gained the momentum as yet. Training in cooperative and financial management is a must for better prospects of the cooperative sector and the government should take some initiative for imparting it.


  1. Along with training what are the expectations of credit societies from the state government?

Considering the numbers of cooperative enterprises across state a separate apex body dedicated only for urban credit societies is need of the hour. Presently Goa State Cooperative Bank is the only apex body for all types of cooperative societies and due to which the urban credit societies are lacking the dedicated attention. If credit societies get a dedicated apex body their issues and grievances can easily be addressed. This will definitely give the boost cooperative credit societies in the state.

  1. What about RBI regulations and guidelines for the cooperative sector? Are they too harsh?

To be frank the RBI guidelines are good when it comes to running a society and it has given a system for societies to follow. So I won’t say the RBI guidelines are harsh, but it has laid much restriction on the functioning of the society. They have made PAN card mandatory for most of the transaction as well as for loaning. The RBI has restricted cash dealing and has asked for cheque transactions.


  1. What is the effect of the RBI guidelines on urban credit societies?

Over the years the societies as well as people are getting used to it. So there isn’t a big issue about it now. Earlier people were avoiding investing into cooperative society and business had reduced. But all is well now for VPK at last. Don’t know about other cooperative societies.

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