The task force on revitalisation of cooperative banks, headed by agriculture economist A Vaidyanathan, also suggested that the state governments should cease to interfere in the financial management of state and district cooperative banks.
Of the 367 district cooperative banks, 144 were sick. Besides 30 state cooperative banks were required to be reviatlised, the draft report, which was presented to Finance Minister P Chidambaram on Wednesday, said.
Fresh infusion of capital was required to revitalise the rural credit cooperative systems in the next four to five years, Vaidyanathan said after releasing the draft report in New Delhi on Thursday.
The report said financial package should not precede the conditionalities of legal, regulatory and institutional reforms.
"We estimate that around Rs 11,000 crore (Rs 110 billion) would be required as financial assistance and an additional contingency provision of Rs 4000 crore(Rs 40 billion) for recapitalising them," member-secretary of the task force Y S Thorat said.
The task force also suggested that the aggregate amount of financial assistance should be shared by the Centre, state governments and cooperative credit structure.
It said all core users of core services of a cooperative credit society should have full voting rights so that they can meaningfully participate in management of their institution and be accountable.
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