The cooperative banking system in the country needs an urgent overhaul, in order to remain competitive.We must seize this opportunity. If we miss now, I do not know when the next opportunity will come.

On September 15, 2005 as the BSE Sensex came close to breaching the 8400 mark, the central government asked market regulators and other investigating agencies to probe and ensure that the Bull Run was not because of yet another nexus between brokers and financial institutions, especially, cooperative banks. This reaction from the central government is justified because the nexus had created many stock market scams in the past. Though the involvement of the greedy brokers in these scams is understandable, the cooperative banks helping them achieve their objective on a regular basis is bewildering. Added to this is the fact that a number of cooperative banks that have gone bankrupt resulting in heavy losses to the depositors. The cooperative system finds itself in the midst of several problems like rising NPAs, lack of corporate governance, increased competition. Wide ranging reforms focusing on restructuring the cooperative credit sector are the need of the hour.