By Bhima Subrahmanyam, Managing Director, National Federation of State Cooperative Banks (NAFSCOB), President International Cooperative Banking Association
The Consultation on Cooperative Identity, jointly organised by ICA-AP and NCUI, comes at the right time in light of the recent developments in India, which are directly or indirectly connected to Cooperative Identity. Let me recall a few events - The International Day of Cooperatives (IDC) 2021 was celebrated on 03 July 2021 with the theme ‘Rebuild Better Together’ which has been incorporated as a powerful advocacy tool by the United Nations (UN). The International Cooperative Alliance (ICA) celebrated its 125th anniversary in August 2020 and the 25th anniversary of the Statement of Cooperative Identity (SCI) in September 2020. ICA is holding its 33rd World Cooperative Congress in December 2021 in Seoul, South Korea. The theme for this event is “Deepening our Cooperative Identity” to strengthen the cooperative movement’s role in addressing global challenges and exploring avenues to improve lives at the local and global levels. The Banking Regulations (Amendment) Act, 2020 enacted by Parliament in the 71st Year of the Republic of India, received the assent of the President of India on 29 September 2020. Let us briefly understand these events. The ICA’s 125th anniversary was celebrated showing longevity and strength that only a few international organizations can claim to have. Let us recapitulate that “ICA was established in 1895 to promote the cooperative model. Today, cooperative members represent at least 12% of humanity. As businesses driven by values and not by the remuneration of capital, the 3 million cooperatives on earth act together to build a better world. Cooperatives are people-centred enterprises jointly owned and democratically controlled by and for their members to realize their common socio-economic needs and aspirations. Managed by producers, users or workers, cooperatives are run according to the 'one member, one vote' rule. As businesses driven by values, not just profit, cooperatives share internationally agreed principles and act together to build a better world through cooperation. Putting fairness, equality and social justice at the heart of the enterprise, cooperatives around the world are allowing people to work together to create sustainable enterprises that generate long-term jobs and prosperity. Cooperatives allow people to take control of their economic future because they are not owned by shareholders, the economic and social benefits of their activity stay in the communities where they are established. Profits generated are either reinvested in the enterprise or returned to the members.”
ICA celebrated the 25th anniversary of the SCI in September 2020. In 1995, participants in the ICA’s 31st World Cooperative Congress in Manchester agreed on the definition of cooperatives, identified their shared values and added the Concern for Community as the 7th cooperative principle. This statement provides guidance and advice to cooperative enterprises worldwide. The seven cooperative principles are guidelines by which cooperatives put their values into practice. They are – 1. Voluntary and Open Membership, 2. Democratic Member Control, 3. Member Economic Participation, 4. Autonomy and Independence, 5. Education, Training, and Information, 6. Cooperation among Cooperatives, 7. Concern for Community.
Having understood the background of the cooperative identity, it may be relevant to relate the same to the two main issues in India viz; impact of the Banking Regulation (Amendment ) Act, 2020 and National Cooperative Policy on Cooperatives 2002.
The impact of the Banking Regulation (Amendment ) Act, 2020 on the cooperative identity right from its definition, ethics, values and democratic principles will have long term implications on the future of cooperatives. It also needs to be tested whether the SCI has been ignored. By the provisions of Section 12 and 45, it is perceived and widely believed, that it impinges on the rights of the member-driven cooperatives and states. The provisions related to the issue and regulation of paid-up capital and securities by cooperative banks are to be further examined as they may not be directly related to the banking area of operations.
The objectives of the National Cooperative Policy on Cooperatives 2002, includes ensuring the functioning of the cooperatives based on basic cooperative values and principles as enshrined in the declaration of the ICA Congress, 1995.
A perusal at the two decade’s old National Policy on cooperatives results in the following observations: The policy document remains more relevant even after two decades of its formulation but calls for an appropriate revision as the implementing agencies (including the Government of India and State Governments) do not appear to have achieved the objectives of the policy. There are various developments since the current policy was formulated. The developments need to be documented while most of the constraints listed in the 2002 policy remained more or less the same. A few more constraints have been added during the last 10 years which need to be illustrated. The ideology of cooperatives/ basic cooperative principles have not witnessed any change but there is a need to introspect the extent of addressing these principles during the governance of the cooperatives at various levels. The objectives of the National Policy may be framed in such a way that makes it easy to be implemented.
The impact of the amendments in the banking-related activities on cooperative identity needs to be assessed and the salient features may have to be justifiably documented in the national policy.
