Is The Cooperative Banking Sector Losing Its Philosophy Of Cooperation?

“You are allowed to withdraw only Rs.1000 from your bank account for the next six months,” this was a message received, a few weeks back, by the customers of Punjab and Maharashtra Cooperative (PMC) bank – one of the top five urban cooperative banks in India. The limit of withdrawal was later increased to Rs. 10,000. PMC has branches across seven Indian states and carries a deposit of Rs. 11,600 crores.

The above mentioned shocking message from the bank was sent as per the directions of the Reserve Bank of India (RBI) to stop all lending, investment, and business operations. The message was just the beginning. Soon a scam unfolded, which has again pointed to the ‘much-discussed’ loopholes in the governance of the cooperative bank sector.

What Is The PMC Scam All About?

The top management of PMC bank and real estate company Housing Development and Infrastructure Limited (HDIL) are connected in this matter. The chairman of the bank was one of the founders of a real-estate company, too.

The builder had great political connections in Maharashtra as well and was sanctioned a loan of Rs. 2,500 crores by PMC. HDIL defaulted the loan repayments and even bank auditors didn’t point it out. Ultimately, RBI had to take punitive action by announcing the debt amount as a “complete loss“.

Cooperative Bank Scams Are Becoming A Matter Of Routine

The scam like PMC is not “once a while event,” but it is just another shocking urban cooperative bank scam revealed in the past two decades. Yes, “one more in the series.” The failures of urban cooperative banks are alarmingly regular, as per RBI data

The number of banks has decreased from 1926 in 2004 to 1551 in 2018, as poorly governing banks were closed down by RBI.

Cooperative banks stemmed from the concept of cooperative credit societies. This means community members extend loans to each other at favourable terms.

Although their scale is smaller than commercial banks, they are often popular in households or small scale businesses as they offer high-interest rates.

Their connection with the rural economy also makes them important in the overall banking sector. Urban cooperative banks were encouraged to proliferate by RBI post-1991 reforms, but after cases of poor governance and regulations, RBI stopped license for new banks from 2005.

For example, the Rao committee (1998) pointed out the weak health of cooperative banks due to lack of professionalism, lack of corporate governance, and low-entry barriers. Similarly, various committees post-2005 have timely reported weak financial status and have guided to improve the monitoring of cooperative banks. 

RBI also started a board of management system to monitor these banks, but PMC is a classic case which shows how a bank can easily escape from RBI regulations. Political motivations for lending money, frauds in accounting and diversion of funds have been the reasons behind many scams of commercial banks revealed in the last decade.

Duel monitoring problems and auditing issues were evident in the present PMC’s case too, for example, data shows how PMC’s vital indicators, like capital position and profitability, did not hint the worsening situation unless restrictions were posed by the RBI.

The Way Forward

The banking sector experts opine some generalised key actions resulting out of PMC scam reportage: 

  • Punitive actions to those who are guilty in present PMC scam to demonstrate a lesson for the future.
  • More power and stringent regulations by RBI as they are in case of commercial banks.
  • Scrutiny in bank auditing based on vital data indicators to monitor the progress of the bank.
  • Quality improvement in the function of banks like trained human resource, a mandated professional board of management, structural reforms in board etc.

On one hand, it’s a matter of the hard-earned savings of the people. The mess of the cooperative banking sector increases the economic vulnerability of households and ultimately the society, by and large. Economic vulnerability poses stressors on other vital aspects of one’s life like medical care, housing, and education.

On the other hand, cooperative banks suffer from weak governance, for example, there are 9 more cooperative banks in the queue under the direction of RBI actions. Hence, the banks have no option but to transform themselves with improved governance. 

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An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

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A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

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