There is a need to make the State Level Coordination Committees (SLCCs) more active and effective even though the progress made by then was satisfactory in conduct of quarterly meetings, said Dr. Raghuram G. Rajan, Governor, Reserve Bank of India on Monday while inaugurating the Conference of the Chief Secretaries/Finance Secretaries and select Cooperative Secretaries of States.
"Gathering market intelligence through better coordination among various regulators and initiating quick follow up action was an important element in bringing to book, entities indulging in unauthorized and suspect businesses involving funds mobilization from gullible public," Rajan said.
SLCCs have been recently reconstituted in each State to monitor unauthorized collection of deposits and they meet more frequently under the chairmanship of Chief Secretaries/ Administrators of the concerned States/ Union Territories (UTs) with participation of senior level officials of the States and the regulators.
In his inaugural remarks, the Governor stated that while India's macro-economic parameters have improved, growth was still slow in picking up. Emphasising the importance of fiscal consolidation in terms of both, quantitative and qualitative dimensions, he added that the State Governments would have a critical role in improving the consolidated fiscal performance of the government sector as a whole.
Rajan highlighted the need for improvement in governance structure, capitalisation and resolution mechanism in the cooperative banking sector which plays a crucial role in credit flow to disadvantaged groups, especially in rural areas.
The Governor stated that without efficient governance, capital infusion would not benefit the sector, as it would function as a 'leaky-bucket'.
Rajan also emphasized the need for prompt corrective action and much stronger accountability in the co-operative banking sector.
He suggested evolving of effective resolution mechanism, such as, the 'good bank-bad bank' model in which good parts of the bank could be identified and segregated from the bad and the bad part could be dealt with appropriately.
