New Delhi: The government on August 27 indicated that the Securitisation Ordinance empowering banks and financial institutions (FIs) with more powers to recover bad debts would be extended to co-operative banks also.

"The Securitisation Ordinance was not applicable for co-operatives. But I have talked to Finance Minister on this issue and the ordinance may cover co-operatives also," the new Minister of State for Finance Anandrao V Adsul said after assuming office.

Expressing concern over the pile of sticky assets in the financial sector, he said the NPA of banks are now at over Rs 60,000 crore apart from that of FIs.

"The ordinance has been issued to enable banks and FIs to reduce their sticky assets," Adsul said.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, empowers banks and FIs powers to take control of secured assets without going through legal hassles, if the defaulting companies fail to pay up loans within a stipulated time.

On financial irregularities in co-operatives, Adsul said, "Any financial institution which comes under the Banking Regulation Act should be regulated by the Reserve Bank India."

Attributing scams in co-operatives sector mainly to the dual control, he said, "While on one side, we have the state co-operative acts and on the other side we have Banking Regulation Act. Some people took advantage of this dual control."

Admitting political nexus in the cooperative sector, he said, "It increased the confidence of the scamsters to carry out financial irregularities."

PTI