Ranchi, Feb. 3: Denied licence by the Reserve Bank of India to start a new cooperative bank, the state government is now considering to hold fresh talks with the Bihar government for the distribution of assets and liabilities of the Bihar State Cooperative Bank.

It also plans to grant state cooperative bank status to the Dhanbad regional cooperative bank and merge other cooperative banks with it. However, the Dhanbad bank was not interested in this business, according to a member of the board of directors.

Bound by the recommendations of the Baidyanathan Committee, the state government cannot exercise such powers which will amount to flouting the democratic values.

If Nabard sources are to be believed, the Dhanbad Cooperative Bank is not ready to become the state cooperative bank and allow its merger to other loss-making cooperative banks.

Nine cooperative banks were operating in Jharkhand after its bifurcation from Bihar.

The Dhanbad Regional Cooperative Bank is the profit-making bank and is also the lone cooperative bank in the state that fulfils the criteria of becoming a state cooperative bank. The Palamau Regional Cooperative Bank was liquidated a couple of months ago and its employees were recently absorbed by other cooperative banks.

Other cooperative banks in Ranchi, Giridih, East Singhbhum, West Singhbhum, Gumla, Hazaribagh and Deoghar are reeling from recurring losses. However, their financial health improved after the state government gave them Rs 150 crore in lieu of waiving the loans up to Rs 10,000, secured by marginal farmers.

The state government, too, was not much interested about division of Bihar State Cooperative Bank on the plea that it will not be a profitable business. Cooperative minister Madhu Koda had made several visits to Mumbai to impress upon the RBI officials to grant him licence for opening new banks. But, the RBI formally rejected his application a few days ago.

The sources added that Koda held an ?informal? meeting with senior Nabard officials to work out a new action plan.

Koda was suggested that either the Dhanbad Cooperative Bank should be granted the status of state cooperative bank and other cooperative banks operating in the state should be merged with it or the division of assets and liablities of the Bihar State Cooperative Bank be finalised at the earliest.

?If the deal with Bihar is finalised, Jharkhand will have to pay only between Rs 5 crore and Rs 10 crore to Bihar and absorb the services of over 110-odd employees,? said an official of the cooperative department. ?We are working out all the related issues very carefully,? Koda said.