Indicating this, special secretary (banking), ministry of finance C M Vasudev told the national conference on Cooperatives in Rural Credit today that the proposal to set up the national bank was at an advanced stage and the government hoped to get the necessary amendments from Parliament shortly.

Reviewing the structure and performance of the co-operative banking sector, Vasudev said the co-operative banks must work out ways to make their operations more cost-effective and competitive. "De-levelling of the hierarchy in the co-operatives and excessive layering has burdened the weaker banks," he said. In addition to restructuring, Vasudev said the co-operative banks must improve their resource mobilisation and recovery system.

Measures were also required in comprehensive risk management and human resource development, he said.Referring to the erosion in the capital base of the cooperatives, Vasudev said, "Capital is the stake of the owner. The owners have to come forward (to build the capital base). Whatever support is needed will be provided."

According to P Kotiah, chairman of NABARD, around Rs 5000-6000 crore is needed for revitalising the cooperative credit system. National Cooperatives Union of India president B S Vishwanathan stressed the need for strengthening cooperative credit institutions to meet the challenges in the competitive environment.