Calcutta, Feb. 18: The Union finance ministry is likely to give recapitalisation funds to the co-operative sector if its entire jurisdiction is handed over to the Reserve Bank of India (RBI).

To cleanse the balancesheet of the co-operative system, the Vaidyanathan committee on revival of co-operative credit and banking institutions has assessed a recap amount of about Rs 15,000 crore. Of this, about Rs 11,000 crore is to be shared among the Centre, states and co-operatives in the ratio of 53:31:16.

At present, the state governments constitute the boards and administrative structure of the co-operative banks and credit societies. The other activities are looked after by the National Bank for Agricultural and Rural Development (Nabard).

Finance ministry sources told The Telegraph, ?The government is considering the matter.?

There are 1 lakh primary agricultural co-operative societies, 367 district central banks and 30 apex banks in the country.

The Vaidyanathan committee has suggested total de-linking of the state governments from the co-operative credit structure and handing over the entire jurisdiction to the RBI. This will be done through signing a memorandum of understanding between the Centre and the state governments.

West Bengal State Co-operative Bank Limited chairman Samir Kumar Ghosh said, ?There is a move from the finance ministry to link the recap fund to the handing over of the entire jurisdiction of these banks to the RBI. In fact, the final report of the Vaidyanathan committee, which has been tabled before the finance ministry on February 15, has hardly any deviation from the draft report.?

The committee has also suggested winding up of a large number of primary agricultural credit societies, which according to Ghosh, would adversely affect the rural economy.

The Left Front, an ally of the UPA government, is also averse to permitting the primary societies as well as district central co-operative banks to park their funds and borrow from any financial agency of their choice.

?They want the financial transactions to be confined within the co-operative system,? added Ghosh.

Bengal chief minister Buddhadeb Bhattacharjee has also written to the Union finance minister P. Chidambaram that the committee?s report has to be carefully assessed. The state government can reach the masses effectively, which can help the cause of the co-operative credit system.