CHAPTER – III

PROFILE OF URBAN CO-OPERATIVE BANKS

3.1 AN OVERVIEW OF BANKING SECTOR

Indian banking system has undergone a number of remarkable changes during

six decades of post-independence period. Though it is very difficult to present all the

changes, an attempt is made herein under to present the important changes.

1. Nationalisation of Reserve Bank of India: The Reserve Bank of India was

established on April 1, 1935 as shareholders‘ bank. The first major step taken

by the Union Government of India in the field of Indian Banking was the

nationalization of Reserve Bank of India on January 1, 1949. It is a symbol of

financial sovereignty and stability of the country. It holds the ultimate reserves

of the Nation, controls the flow of purchasing power - whether currency or

credit, and acts a banker to the State.

2. Nationalisation of State Bank of India: The State Bank of India was set up

in July 1955, under the State Bank of India Act, 1955, when it took over assets

and liabilities of the former Imperial Bank of India. The Imperial Bank was

the biggest commercial bank in the country. The State Bank of India

functions/serves as the agent of Reserve Bank of India at places where it has a

branch and where the Reserve Bank of India has no branch.

3. Nationalisation of major Commercial Banks: A significant change in the

field of commercial banking since Independence was the nationalization of

banks with deposits of Rs.50 crore or more. The objective of bank

59
 nationalisation in 1969 was to remove the ownership and control of a few

industrial enterprises over the commercial banks. This move aimed at

preventing the concentration of income and wealth in the hands of a few.

4. Co-operative Banks: The Co-operative banks have been established under

Cooperative Societies Acts of different states. The co-operative movement

was started in 1904 with a view to provide financial assistance to agricultural

sector.

5. Regional Rural Banks: The Regional Rural Banks are the new banking

institutions which have been added to Indian Banking Sector since October 2,

1975. The primary objective of Regional Rural Banks is to develop the rural

economy by providing credit and other facilities particularly to the small and

marginal formers.

6. National Bank for Agricultural and Rural Development (NABARD): The

NABARD has emerged as an apex refinancing institution for agricultural and

rural credit in the country since July 1982. It has taken over the financing

function of Reserve Bank of India in respect of State Co-operative Banks and

Regional Rural Banks, and it provide all types of production and investment

credit to agriculture, for small scale industries, cottage and village industries

and other allied economic activities.

7. Development Banks: Development Banking or the Institutional Banking

System has been introduced in India mainly to provide medium-term and

long-term capital for industry and agriculture.

60
3.2 CO-OPERATIVE BANKS IN INDIA

Co-operative Banks in India is created to financing needs of agriculture, retail

trade, small industry and self-employed business in urban, semi-urban and rural areas.

A distinctive feature of the co-operative credit structure in India is its

heterogeneity. The co-operative banking structure is differ from Urban, Rural and

States. Urban areas are served by Rural Co-operative Banks, Rural Areas are served

by Rural Co-operative Banks and State Co-operative bank serves the whole state. The

Co-operative banking sector is the oldest segment of the Indian Banking System. In

recent years Reserve Bank of India (RBI), and National Agriculture and Rural

Development Bank (NABARD) have taken several important steps to improve the

Co-operative Banking system in India.

There are six types of co-operative banks are working in India and they are -

 Primary Agriculture Credit Societies

 Central Co-operative Bank

 State Co-operative Bank

 Primary Co-operative Agriculture and Rural Development Banks

 State Co-operative Agriculture and Rural Development Banks

 Urban Co-operative Banks

3.3 ORGANIZATIONAL STRUCTURE OF CO-OPERATIVE CREDIT

INSTITUTIONS

Co-operative banks, with their extensive branch network and localized

operational base, play a key role in the development process, in general and credit

delivery and deposit mobilization, in particular. Different segments of the co-

61
operative banking sector address specific credit needs of diverse sections of the

population, both in terms of location as well as tenor. While co-operatives enlarge the

reach of banking, both geographically and socio-economically, their conduct of

banking business often poses a number of challenges, especially in terms of high

levels of loan delinquency. Their large number also poses a challenge to regulation.

This is compounded further by regulatory overlaps among several supervisors,

including the Reserve Bank, the State Governments and the National Bank for

Agriculture and Rural Development (NABARD).

62
 Figure:-3.1

STRUCTURE OF INDIAN CO-OPERATIVE CREDIT INSTITUTIONS

Co-operative Credit
Institutions

Rural Co-operative Credit Institutions Urban Co-operative Banks

Short-Term Long –Term

Structure Structure

State Co- District Central Primary Agricultural

operative Banks Co-operative Credit Societies
Banks

State Co-operative Primary Co-operative

Agricultural and Rural Agriculture and Rural
Development Banks Development Banks

63
3.4 STRUCTURE OF CO-OPERATIVE CREDIT INSTITUTIONS

The co-operative credit structure occupies a formidable and almost

indispensable place in the rural credit scenario of the country. The co-operative

banking structure in India comprises Urban Co-operative Banks and Rural Co-

operative Credit Institutions. Urban Co-operative Banks consists of single tier, viz.

Primary Co-operative Banks. The rural co-operative credit institutions structured into

separate arms for short-term credit structure and long-term credit structure. Short-term

co-operative credit institutions have a federal three-tier structure consisting of a large

number of Primary Agriculture Credit Societies (PACS) at the grass root level,

District Central Co-operative Banks (DCCBs) at the district level and State Co-

operative Banks (SCBs) at the state level. The smaller states and union territories have

a two-tier structure with SCBs directly meeting the credit requirements of PACS. The

long-term rural co-operative structure has two tier, viz State Co-operative Agriculture

and Rural Development Banks (SCARDBs) at the State level and Primary Co-

operative Agriculture and Rural Development Banks (PCARDBs) at the taluka level.

Primay Agricultural Credit Societies lie at the root of the co-operative credit

structure of the country which cover the short and medium term credit needs of our

farmers. The PACS are generally organized on the Raiffeisen model. Their members

have unlimited liabilities and they contribute their share capital. This institution raises

funds by way of share capital, membership fees, deposits of members and non-

members and loans from District Central Co-operative bank and the Government.

64
3.4.1 District Central Co-operative Banks (DCCBs)

A District Central Co-operative Bank generally functions within a three-tier

structure in almost all the provinces excepting a few provinces where it functions in a

two-tier structure. Under a three-tier structure form, it acts as the link between the

Apex Bank at the top and societies and individuals the base as its constituent

members. The Apex Bank is known as the State Co-operative Bank formed separately

for each province affiliating all the District Central Co-operative Banks one for every

district within the province. The DCCBs manage their funds from sources like share

capital, deposits, borrowing from State Co-operative Banks and other societies,

DCCBs serve as an important link between these societies at the base level and the

money market of the country.

3.4.2 State Co-operative Banks (SCBs)

The State Co-operative Bank is the apex bank of co-operative sector in the

state. The SCBs are formed by federating all District Central Co-operative Banks in a

particular state. Practically, the SCB is the balance provider to the co-operative

movement in the sense that they collect surplus funds of DCCBs and other co-

operative institutions and pass them on to those, which require such resources. The

SCBs raise its funds by way of share capital (subscribed to by the affiliated DCCBs,

reserve funds, loans from the State Bank of India, other commercial banks and inter-

bank borrowings. The SCBs furnish loans to the DCCBs in order to enable them to

help in promoting the lending activities of the primary credit societies.

So in a nutshell, as far as the rural community is concerned, the co-operative

network is unparallel in terms of the reach. It consists of a short-term structure with

31 State Co-operative Banks (SCBs) with 862 branches, 367 District Central Co-

65
operative Banks (DCCBs) with 12,600 branches and 1, 08,779 Primary Agriculture

Credit Societies (PACS). Besides these, a long-term structure with 20 State Co-

operative Agriculture and Rural Development Banks (SCARBs) having 864 branches,

727 Primary Co-operative Agriculture and Rural Development Banks (PCARDBs)

with 1008 branches are purveying long term Credit to farmers.

3.4.3 Urban Co-operative Banks (UCBs)

Among the non-agricultural credit societies urban co-operative banks occupy

an important place. They cater to the credit needs of people residing in urban areas.

The co-operative movement in India officially started with the establishment of the

co-operative credit societies Act, 1904. After the enactment of this act, Primary Co-

operative Credit Societies were set up in the urban areas, called the urban co-operative

banks, with the objective of promoting sustainable banking practices among the lower

and middle income strata of the urban population. Urban co-operative banks are also

called Primary Co-operative Banks (PCBs) by the Reserve Bank of India. The RBI

defines PCBs as ―small sized co-operatively organized banking units which operate in

metropolitan, urban and semi urban centers to cater mainly to the needs of small

borrowers, viz. owners of small scale industrial units, retail traders, professional and

salaries classes.‖

These banks are being organized on a limited liability basis, generally extend

their area of operation over a town and advance loans mostly to the small traders,

artisans, and salary earners on personal security as well as against gold, silver and

government certificates viz. NSC, KVP, etc. An urban co-operative bank is registered

under the law relating to the co-operative societies as it prevails in the state in which

the society is established. Its organization and functioning are governed by the Co-

66
operative Societies Act applicable to the state and the rules framed under the Act.

Initially these banks were being managed and governed by the State Governments

under the provision of their respective Co-operative Societies Act. Later, these were

brought under the scope of the Banking Regulation Act, 1949, with effect from 1st

March, 1966. With this, the UCBs are organized under dual control of Reserve Bank

of India and the respective State Government. Urban co-operative banks with multi-

state presence are also regulated by the Central Government and registered under the

Multi-State Co-operative Societies Act.

3.5 BRIEF HISTORY OF URBAN COOPERATIVE BANKS IN INDIA

The Bank was formed in 1872 inManchester, UK. The Co-operative banks in

INDIA have a history more than 100 years. The Co-operative banks are an important

constituent of the Indian Financial System. Co-operative Banks in India are registered

under the Co-operative Societies Act. The cooperative bank is also regulated by the

RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws

(Co-operative Societies) Act, 1965. These banks were conceived as substitutes for

money lenders.

The origins of the urban cooperative banking movement in India can be traced

to the close of nineteenth century when, inspired by the success of the experiments

related to the cooperative movement in Britain and the cooperative credit movement

in Germany such societies were set up in India. Cooperative societies are based on the

principles of cooperation, mutual help, democratic decision making and open

membership. Cooperatives represented a new and alternative approach to organisation

as against proprietary firms, partnership firms and joint stock companies which

represent the dominant form of commercial organisation.

67
 Urban co-operative banks are those co-operative banks which do banking

business in urban areas. There functions are similar to those of commercial banks but

their organization is like to those of co-operative societies.

The term 'Urban Co-operative Bank' has not been uniformly defined. The

different states have defined these banks differently. An urban co-operative bank

normally confirms its operation to the municipal limits of a town. Nowadays, the

urban co-operative banks play a significant role in the national economy. They have

achieved a remarkable success in various areas of co-operative banking.

In the past, poor and backward class people were exploited by petty

moneylenders to the extent that they were debt-bound all their lives with the opening

of co-operative banks branches in rural areas. They have been able to back masses at

grass root level and by providing soft loans to farmers and small traders. Co-operative

banking has become a part of their lives. These poor and backward people are now

not only borrowing but also depositing money in co-operative banks.

3.6 ROLE OF URBAN CO-OPERATIVE BANKS

Urban Co-operative Banks have an important role to play in several respects

and some of them are listed below:

First and foremost, they can organize and bring together middle and working

classes in urban and semi-urban areas and inculcate in them the habits of thrift and

self-help and acquaint them with the elements of ordinary banking principles.

The mobilization of savings by urban co-operative banks and the consequent

drawing of urban resources into the apex and central co-operative banks which are in

need of funds to finance the rural, industrial and other functional co-operatives can

contribute to general economic development.

68
 They can make certain essential banking facilities such as remittance of funds

and so on, available in areas which may not be considered suitable for commercial

banking and to persons who may not be able to get such manners from commercial

banks; and they can provide intelligent, experienced and active leadership to the

cooperative movement including the central and apex cooperative banks, which in

view of their federal character draw their directors from member's institutions.

3.7 REFORMS OF URBAN COOPERATIVE BANKS

The urban co-operative banking sector, being an integral part of financial

system, RBI has brought in a series of reforms in it.

Narasimham Committee Recommendations (High Powered Committee)

The Committee suggested that RBI should review the entry norms in

respect of UCBs and prescribe revised prudent minimum capital norms for them.

To achieve an integrated system of supervision over the financial system, the

Committee recommended that UCBs should also be brought within the ambit of

the Board of Financial Supervision. In response to the recommendations of the

Committee, the Reserve Bank set up a High Powered Committee on Urban Co-

operative Banks under the Chairmanship of Shri K.Madhava Rao, Former Chief

Secretary to Government of Andhra Pradesh, to review the performance of UCBs

and suggest measures to strengthen them. The committee gives its views on

important areas such as follows:

Licensing Policy:

In the new liberalized regime, licensing policy for new UCBs is

expected to be not only transparent, but also precise and objective, based on

69
established standards and procedures. Moreover, the procedures governing these

licensing norms have to be simple and minimal.

Dual Control:

One of the problem areas in the supervision of UCBs is the duality in

control by the State Government and the Reserve Bank. Since UCBs are primarily

credit institutions meant to be run on commercial lines, the responsibility for their

supervision devolves on the Reserve Bank. Therefore, while banking operations

pertaining to branch licensing, expansion of areas of operations, interest fixation

on deposits and advances, audit and investments are under the jurisdiction of the

RBI, the managerial aspects of these banks relating to registration, constitution of

management, administration and recruitment, are controlled by the State

Governments under the provisions of the respective State Co-operative Societies

Act. The Narasimham Committee (1998) recommended that this duality of control

be done away with and the responsibility of regulation of UCBs be placed on the

Board for Financial Supervision. This will require amendment of the Multi-State

Co-operative Societies Act, 1984, State Co-operative Societies Act, and the

Banking Regulation Act.

Corporate Governance:

Good corporate governance is essential for the effective functioning of

any financial entity. To this end, the Madhava Rao Committee suggested that at

least two directors with suitable professional qualification and experience should

be present on the Boards of UCBs and that the promoters should not be defaulters

to any financial institutions or banks and should not be associated with chit funds,

NBFCs, co-operative banks, commercial banks as Director on the Board of

70
Directors. These recommendations would need to be examined intensively before

formulating policy actions in this regard.

Capital Adequacy:

The Narasimham Committee (1998) had raised the issue of extending

capital adequacy prescription for co-operative banks. Accordingly, the Committee

recommended that the co-operative banks should reach a minimum 8 per cent

CRAR over a period of five years. The findings of the Madhava Rao Committee

on UCBs also reiterated that a majority of the UCBs was in favour of extending

the CRAR discipline to UCBs. However, the ability of the UCBs to raise

additional capital for the purpose has been limited by certain features viz.,

inability to make public issue of capital and that, they can raise capital only from

members, subject to an overall ceiling and restrictions imposed by the various

Acts (State Co-operative Societies Act and Multi- State Co-operative Societies

Act, 1984) which constrains the number of shares that an individual can hold.

Legislative Reforms:

The Narasimham Committee in its Report had rightly observed that a

legal framework that clearly defines the rights and liabilities of the parties to

contract and provide speedy resolution of disputes is the essential bedrock of the

process of financial intermediation and UCBs are no exceptions. Accordingly, the

Government had appointed an Expert Group under the Chairmanship of Shri T.R.

Andhyarujina, Former Solicitor General of India, to suggest appropriate

amendments in the legal framework affecting the banking sector. The Committee

would address amendments in the various external Acts affecting banking sector

such as, the Transfer of Property Act, foreclosure laws, Stamp Act, Indian

Contract Act, DRT Act, etc. The Committee, in its Report submitted in April,

71
 2000, recommended the inclusion of a new law for granting statutory powers

directly to banks (and financial institutions) for possession and sale of securities

aid a loan, enabling framework for securitization of receivables and strengthening

recovery mechanism.

Unlicensed and Weak banks:

The existence of a large number of unlicensed banks has become a

serious cause for concern to regulators. The main reason for proliferation of such

banks has been a mild screening process in the past. In view of the regulatory

discomfiture that such banks impose on the system as a whole, it has been

suggested that these banks be licensed, provided they satisfy the quadruple criteria

of (a) minimum prescribed CRAR, (b) net NPA ratio not exceeding 10 per cent,

(c) have made profits continually for the last three years, and (d) have complied

with the RBI regulatory directions.

One issue of serious concern regarding UCBs is the delay/ non-submission of

returns within the stipulated time frame. In particular, UCBs are required to

submit two types of returns (statutory returns and control returns) to the Reserve

Bank with a view to exercise adequate supervision over them. Unfortunately,

there is often a serious delay in the submission of these returns by individual

banks. Non-availability of adequate and timely data would no doubt have serious

effect on timely policy action. In this context, UCBs have to improve their

statistical reporting system and bridge the wide gap in data availability as

compared to that of commercial banks.

72
 Table – 3.1

Growth of UCBs in India (Amount in Crore)

Years No of UCBs Deposits Advance

2004 1926 110256 67930
2005 1872 105021 66874
2006 1853 114060 71641
2007 1813 121391 79733
2008 1770 138496 88981
2009 1721 158733 97918
2010 1674 182862 110303
2011 1645 209949 135104
2012 1618 238600 158000
2013 1606 276900 181000
Total 17498 1656268 1057484
Source: Report on Trend and Progress of Banking in India, 2012-13.

The table - 3.1 clearly shows that the number of UCBs during this period

While reviewing the progress made by the urban cooperative banks during the last 10

years, it was observed that the performance has by large been satisfactory. Though

there has been reduction in the number of UCBs from 2004 on words, the total

business of UCBS has shown steady increase signifying that the banks have been able

to garner more business. There are average 1749 numbers of society‘s registers during

2004-2013.

3.8 URBAN COOPERATIVE BANKS IN TAMILNADU

The state of Tamil Nadu, Which was formerly called Madras Province, takes

pride in initiating the Cooperative movement in this country. In 1892, Fredrick

Nicholson was appointed by the Madras Government for the purpose of enquiring the

73
possibility of introducing a system of Agricultural and Land Banks in the Presidency.

He submitted his report in two parts in 1895 and recommended for the establishment

of ―Cooperative Credit Societies‖. Mr. Nicholson‘s Report was reviewed by the

Government of India and the opinions of local Governments on the Report were

considered in 1901 by a Committee under the Chairmanship of Shri.Edward Law.

Considering the recommendations, the need for a special legislation was felt by the

Government of India and accordingly the Cooperative Credit Act of 1904 was passed.

The State of Madras had a strong root for the growth of Urban Cooperative credit

movement. The Madras Committee on co-operation said that ―The Madras Presidency

was peculiarly congenial to the birth of urban credit societies in that for many years,

nidhis or indigenous financing associations had been in existence in the towns‖. The

first Urban Cooperative Bank in Tamil Nadu was registered in Kanchipuram in the

Chengalpattu District of Madras Presidency on October, 1904, with an initial share

capital of Rs. 2005. The Madras Committee on Cooperation laid a strong emphasis on

the organisation of non-agricultural credit societies. The Committee said that ―The

emphasis laid on rural credit did not prevent recognition of the fact that the interest of

the small artisans, traders, shop-keepers, industrial employees and others in towns

should be protected and facilities provided for reasonable credit to them as well. The

money-lender exerts to the same awful influence over this urban clients and suitable

machinery is necessary to provide relief to these classes. The Committee advised the

Government to devote special attention towards urban banks by way of distinguishing

them from other societies‖.

The State Government has signed a Memorandum of Understanding with the

Reserve Bank of India to improve the functioning of the Urban Cooperative Banks.

The computerisation of all the Urban Cooperative Banks and their branches has been

74
taken up. This will improve their operational efficiency so that they can offer best

services to their customers on par with the commercial banks. In continuation of the

execution of the Memorandum of Understanding with the RBI, the State Government

has initiated various actions for improving the functioning of Urban Cooperative

banks.

At present, 120 Urban Cooperative Banks are functioning in the State. These

Urban Cooperative Banks provide banking and credit facilities to the urban and semi-

urban population. They mobilize deposits from the public and extend credit facilities

to small traders, artisans and persons belonging to the middle income group for

various purposes like housing, business, education, consumer and other non-farm

sector activities. During 2011-12, Urban Cooperative Banks disbursed loans of

Rs.5552.77 crore to 16, 53,267 beneficiaries. A target of Rs.6500 crore is fixed for the

year 2012-13. The total deposit amount available with the Urban Cooperative Banks

as target of Rs.5000 crore is fixed for the year 2012-13. The Urban Cooperative

Banks should lend not less than 60% of their total advances to the priority sector of

which 25% is disbursed to the weaker sections of the society.

3.9 LIST OF URBAN COOPERATIVE BANKS IN TAMILNADU

In Tamil Nadu, totally 120 banks are functioning effectively in semi-rural and

semi-urban population. The analysis identified that the Vellore District comprises a

maximum of 9 banks followed by Tuticorin 8, Coimbatore and Trichy 7 banks each.

But in Perambulaur and Kanyakumari district, there is only one urban cooperative

bank serving its customers. In the Tamil Nadu state, Chennai, the 6 urban cooperative

banks are functioning effectively at different densely populated places of T.Nagar and

Georgetown, Purasawakkam and Saidapet. The districts of Dharmapuri, Nilgiris,

Theni, Villupuram has only 3 urban cooperative banks in each district. In the districts

75
of Madurai, Namakkal and Virudhu Nagar, 5 urban cooperative banks rendering their

banking services to the semi-urban areas to promote the standard of living the people.

There are 6 urban cooperative banks in Erode, Kancheepuram, Tanjore and

Tirunelveli districts.

Table No.3.2

URBAN COOPERATIVE BANKS IN TAMILNADU AS ON 31-3-2013

Total No. of
S.No District Name of the Urban Cooperative Bank
Banks
1 George Town Urban Cooperative Bank
2 Purasawalkam Urban Cooperative Bank
3 Saidapet Urban Cooperative Bank
4 T.Nagar Urban Cooperative Bank 6
Chennai
5 Vellala Urban Cooperative Bank
6 Chintadripet Urban Cooperative Bank
7 Coimbatore Urban Cooperative Bank
8 Mettupalayam Urban Cooperative Bank
9 Pollachi Urban Cooperative Bank
10 Tiruppur Urban Cooperative Bank 7

11 Udumalpet Urban Cooperative Bank

Coimbatore
12 Valparai Urban Cooperative Bank
13 Anamalai Estate Urban Cooperative Bank
14 Chidambaram Urban Cooperative Bank 2
15 Cuddalore Virudhachalam Urban Cooperative Bank
16 Dharmapuri Urban Cooperative Bank
17 Krishnagiri Urban Cooperative Bank 3
18 Dharmapuri Kaveripattinam Urban Cooperative Bank
19 Badlagundu Urban Cooperative Bank
20 Dindugal Urban Cooperative Bank 4
21 Palani Urban Cooperative Bank

76
22 Dindugal Kodaikkanal Urban Cooperative Bank
23 Erode Urban Cooperative Bank
24 Chennimalai Urban Cooperative Bank
25 Tharapuram Urban Cooperative Bank
26 Erode Gobichettipalayam Urban Cooperative Bank
5
27 Sathiyamangalam Urban Cooperative Bank
28 Karur Urban Cooperative Bank 2
29 Karur Kulithalai Urban Cooperative Bank
30 Big Kancheepuram Urban Cooperative Bank
31 Little Kancheepuram Urban Cooperative Bank
32 Kanchee Chinglepattu Urban Cooperative Bank
33 Puram Tambaram Urban Cooperative Bank
6
34 Madurantagam Urban Cooperative Bank
35 Tiruvellore Urban Cooperative Bank
36 Kanyakumari Peoples Urban Cooperative Bank 1
37 Madurai Sou Urban Cooperative Bank
38 Melur Urban Cooperative Bank
39 Thirumangalam Urban Cooperative Bank 4

40 Madurai Usilampatti Urban Cooperative Bank

41 Rasipuram Urban Cooperative Bank
42 Namakkal Urban Cooperative Bank
43 Tiruchengode Urban Cooperative Bank
44 Namakkal Velur Urban Cooperative Bank 5

45 B.Kumarapalayam Urban Cooperative Bank

46 Udhagamandalam Urban Cooperative Bank
47 Coonoor Urban Cooperative Bank
48 Nilgiris Kottagiri Urban Cooperative Bank 3

49 Mayuram Urban Cooperative Bank 2

50 Naga Pattinam Sirkali Urban Cooperative Bank
51 Perambalur Ariyalur Urban Cooperative Bank 1
52 Pudukkottai Urban Cooperative Bank 2

77
53 Pudukottai Aranthangi Urban Cooperative Bank
54 Ramnad Urban Cooperative Bank
55 Paramakudi Urban Cooperative Bank
56 Ramnad Abiramam Urban Cooperative Bank 3

57 Salem Urban Cooperative Bank

58 Sevapet Urban Cooperative Bank
59 Ammapet Urban Cooperative Bank
60 Subramaniyam Urban Cooperative Bank 8

61 Attur Urban Cooperative Bank

62 Sankeri Urban Cooperative Bank
Salem
63 Thiruvalluvar Urban Cooperative Bank
64 Omalur Urban Cooperative Bank
65 Iliayangudi Urban Cooperative Bank 2
66 Sivagangai Karaikudi Urban Cooperative Bank
67 Nichelson Urban Cooperative Bank
68 Karthatankudi Urban Cooperative Bank
69 Papanasam Urban Cooperative Bank
70 Kumbakonam Urban Cooperative Bank 6
Tanjore
71 Pattukottai Urban Cooperative Bank
72 Adirampattinam Urban Cooperative Bank
73 Tiruvannamalai Urban Cooperative Bank
74 Polur Urban Cooperative Bank
75 Tiruvanna Tiruvetipuram Urban Cooperative Bank 4

76 Malai Arni Urban Cooperative Bank

77 Sri Kamalambika Urban Cooperative Bank
78 Sri Lakshminarayana Urban Cooperative Bank
79 Mannargudi Urban Cooperative Bank
80 Thiruvarur Thiruthuraipoondi Urban Cooperative Bank 4

81 Tiruchirapalli Urban Cooperative Bank

82 Hirudhayapuram Urban Cooperative Bank
83 Srirangam Urban Cooperative Bank

78
84 Trichy Varaganeri Urban Cooperative Bank 5
85 Manapparai Urban Cooperative Bank
86 Lalgudi Urban Cooperative Bank
87 Trichy Musiri Urban Cooperative Bank 2
88 Periyakulam Urban Cooperative Bank
89 Theni Uthamapalayam Urban Cooperative Bank 3
90 Bodinaikanur Urban Cooperative Bank
91 Tirunelveli Junction Urban Cooperative Bank
92 Nellaai Nagar Urban Cooperative Bank
93 Palayamkottai Urban Cooperative Bank
94 Tirunelvelli Viravanallur Urban Cooperative Bank 6

95 Kallidaikunuchi Urban Cooperative Bank

96 Ambasamudram Urban Cooperative Bank
97 Tuticorin Urban Cooperative Bank
98 Tuticorin Melur Urban Cooperative Bank
99 Srivaikundam Urban Cooperative Bank
100 Thiruchendur Urban Cooperative Bank 8
Tuticorin
101 Nazerath Urban Cooperative Bank
102 Prakazapuram Urban Cooperative Bank
103 Mukkuperi Urban Cooperative Bank
104 Kovilpatti Urban Cooperative Bank
105 Vellore Urban Cooperative Bank
106 Pallikonda Urban Cooperative Bank
107 Ranipet Urban Cooperative Bank
108 Sholinger Urban Cooperative Bank
Vellore 9
109 Arokonam Urban Cooperative Bank
110 Tirupattur Urban Cooperative Bank
111 Jolarpet Urban Cooperative Bank
112 Vaniyambadi Urban Cooperative Bank
113 Gudiyattam Urban Cooperative Bank
114 Tindivanam Urban Cooperative Bank

79
115 Villupuram Villupuram Urban Cooperative Bank 3
116 Tirukoilur Urban Cooperative Bank
117 Srivilliputhur Urban Cooperative Bank
118 Sivakasi Urban Cooperative Bank
119 Virudhunagar Rajapalayam Urban Cooperative Bank 4

120 Virudhunagar Urban Cooperative Bank

Total 120
Source: Tamil Federation of Urban Cooperative Banks

Area of Operations of Urban Banks in the State

In Tamil Nadu, the area of operation of an urban cooperative bank usually

covers a revenue district. Some years ago, there was much discussion regarding the

proper area of operation. Some have proposed the splitting up of the district urban

cooperative banks into smaller banking unions on the ground that when there is only

one urban cooperative bank for each revenue district, the work of the urban

cooperative bank becomes un-widely. The division of the urban banks at Salem,

Coimbatore and Madurai into two banks with the area of each bank being the same as

the present Development Council‘s has been accepted by the Government. The

Narayanaswami Pillai Committee on co-operation (1955-56) also favoured the

splitting up of big urban banks into two banks.

General Body and Board of Management

The General Body is the Ultimate authority in all matters relating to the

administration of the urban cooperative banks. This body is composed of (i) Members

of the Board of Management, (ii) Individual members and (iii) Delegates representing

societies. The following matters are dealt with by the General Body: (a) Adoption of

the annual administration report, (b) Consideration of the Registrar‘s Notes of audit or

inspection, (c) Amendments, repeal or enactment of bylaws, (d) Election of members

80
to the Board of Management and the removal of any member thereof, and (e) Appeals

from members against the orders of the Board of Management.

The management of the bank is vested with the board of Management. The

board consists of representatives of shareholding societies represented through local

unions. The term of a member of the board is generally five years. The by-laws of the

banks provide that a proportion of the members shall retire each year on such date as

may be specified. As the board of Management meets only periodically, an executive

committee consisting of the president, vice-president and some members of the board

is elected by the Board of Executive Committee assisted by technically qualified staff

consisting of a paid Secretary, Manager, and Clerks.

Position of Owned Fund

Under the third Five Year Plan for Tamil Nadu, it was decided to increase the

quantum of agricultural credit provided by the co-operative urban banks to Rs.50

crores, at the end of the plan. It might be difficult to meet full demand for the

production credit unless the resources like share capital, reserves, deposits and

borrowing are doubled. In fact the size of ‗Owned Funds‘ determines the maximum

borrowing power of the urban bank and the amount of concessional finance from the

RBI. The RBI has defined the term ‗Owned Funds‘ as the sum total of the paid-up

capital and Statutory Reserve Fund. Mehta Committee on co-operative credit

extended the scope of the term ‗Owned Funds‘ to include other funds of permanent

nature created out of profits such as building fund, stabilization fund, sinking fund for

debentures other than in Urban Land Mortgage Banks. This liberalized definition was

of great help to urban co-operative banks in Tamil Nadu. As this new definition of

‗Owned Funds‘ has been accepted by the RBI, the maximum borrowing power at 15

times and 20 times of the ‗Owned Funds‘ of Urban and Apex Bank respectively

81
would be adequate for the growing credit requirements under the Fifth and Sixth Five

Year Plans.

Mobilization of Internal Resources and Government Guarantee

In the three tier credit structure, urban co-operative banks in Tamil Nadu are

faring well in mobilizing internal resources. During the period of Fourth, Fifth and

Sixth Five Year Plans also, the urgency of mobilizing huge volume of internal

resources was felt. This programme of mobilization of internal resources was

undertaken in two ways. 1) By increasing through planned efforts the share capital of

the primary, Urban and apex institutions. 2) By intensifying the drive for the

collection of deposits. In order to activate to the targets set both with respect to share

capital and deposit, certain concrete measures had been adopted during the Fourth and

Fifth Plan periods. a) At the level of the primary society, the members were persuaded

to contribute up to a maximum of 20 percent of the loans as share capital. b) The

linking of borrowing by primary societies to their shares enhanced the share capital of

urban cooperative banks, in our state. The Government of India recommended this

ratio to be 1:10. c) In so far as mobilization of deposits is concerned, effective

publicity methods were adopted. The rate of interest for the deposits was increased

from 1/2 percent to 1 percent in the case of current deposits, 2 to 3 percent in the case

of savings deposits and 4 to 6 percent in the case of fixed and recurring deposits. They

attract deposits from individuals, institutions and co-operative societies. The

impressive branch banking in our state paved the way for augmenting the deposits. In

June 1966, the Urban Ministry of Finance recognized the urban co-operative banks as

agencies to receive deposits from local bodies, statutory authorities, societies,

universities and institutes of technology. As a result, the deposits of urban co-

operative banks in Tamil Nadu increased. The average deposits per bank in Tamil

82
Nadu increased in June 1972 to 251 lakhs as against Rs.177 lakhs on June 1970. The

government guarantee for the fixed deposits of the urban cooperative banks also

helped the mobilization of deposits. In the new Act of 1961, there was a provision to

give state guarantee to urban co-operative banks in respect to their deposits.

Branch Expansion of Urban Co-operative Banks in Tamil Nadu

Another method for augmenting the internal resources of the urban co-

operative banks is to secure more local deposits by the opening of branches. The

survey committee, the Mehta Committee, the Committee on Takkavi Loans, the

Santhanam Committee on co-operation and the working group on co-operation for the

Fifth Plan strongly favoured the branch banking. Five Urban cooperative banks in

Tamil Nadu which have opened branches in seven places have secured deposits

amounting to nearly Rs.30 lakhs in 1962. The experience of other progressive states

like Maharashtra and Gujarat had also served as an eye opener to the urban

cooperative banks in Tamil Nadu in the potentialities of the branches as feeder lines

for deposits. The Mehta Committee has also recommended that the urban cooperative

banks should open branches in suitable areas. Hence, the urban cooperative banks in

our state have opened branches in many suitable places in their area of operation in a

phased manner.

3.10 PROFILE OF URBAN COOPERATIVE BANKS IN NAMAKKAL DISTRICT

There are five urban cooperative banks in Namakkal district at different places

as follows:

(1) Namakkal Urban Cooperative Banks (NUCB).

The Namakkal Urban Cooperative Banks Ltd. was established on 04.11.1905

and has been operating within 10 kms areas of Namakkal municipality and has a

population coverage of 14, 95,661. The bank has been rendering services to the urban

83
population for 100 years. Namakkal Urban Cooperative bank is the only bank in the

district functioning in the Urban Centres while Rasipuram, Tiruchengodu,

B.Komarapalayam and Velur Urban Cooperative Banks are operating in areas

designated as semi-urban by the Reserve Bank of India. It is located in one of the

business centres having lot of small scale industries and poultry farm. The bank is

managed by an elected Board of Directors. It is rendering services mainly to the lorry

body builders and poultry farmers and other required peoples. It has six branches at

various places of Namakkal. These are

 Urban Cooperative Bank, Salem Road, Mudaliyarpettai

 Urban Cooperative Bank, Santhaipettaipudur

 Urban Cooperative Bank, Rasipuram Main Road, Kalappanaickenpatti

 Urban Cooperative Bank, Rasipuram Main Road, Sendamangalam

 Urban Cooperative Bank, Bazaar Street, Erumapatti.

 Urban Cooperative Bank, Thuraiyur road, Ganeshapuram.

(2) Tiruchengodu Urban Cooperative Bank (TUCB).

The Tiruchengodu town is famous for lorry body, tippers body building and

textile mills. The Tiruchengodu Urban Cooperative Bank was established on

22.02.1924 and has been operating within 10 kms area of Tiruchengodu Municipality.

It has completed more than eight decades of service in the field of Urban Credit to the

customers. It has a population coverage of 5, 29,414. It is rendering service mainly to

the handloom weavers and other weaker sections SC/ST peoples. Tiruchengode

Urban Cooperative Bank has two branches.

 Urban Cooperative Bank, Kottappalli, Tiruchengodu.

 Urban Cooperative Banks, C.H.B. Colony, Tiruchengodu.

84
(3) Kumarapalayam Urban Cooperative Bank (KUCB).

Kumarapalayam is one of the industrial centres in Namakkal District. Power

loom industry is concentrated in and around Kumarapalayam. The B.Kumarapalayam

Urban Cooperative Bank was established on 06.10.1975. It has been operating 10 kms

jurisdiction of B.Komarapalayam town. It is located in the business centres of textiles.

It has population coverage of 65,640 and has completed three decades services to the

customers, majority who are based in semi-urban areas. It has two branches. These

are,

 Urban Cooperative Bank, Oolappalayam, B.Kumarapalayam.

 Urban Cooperative Bank, Near Devi Pharmachy, Bajar,

B.Kumarapalayam.

(4) Rasipuram Urban Cooperative Bank (RUCB).

The Rasipuram Urban Cooperative Bank was established on 06.11.1921 and

has been operating within 10 kms area of the Rasipuram Municipality. It has a

population coverage of 3, 12,756 and has completed eight decades of services of its

existence. It is rendering services mainly to the silk handloom weavers in and around

Rasipuram city. It has four branches at different places. There are

 Urban Cooperative Bank, TVS Street, Rasipuram.

 Urban Cooperative Bank, SSS Street, Rasipuram.

 Urban Cooperative Bank, Namagiripet.

 Urban Cooperative Bank, Vennanthur.

85
(5) Velur Urban Cooperative Bank (VUCB).

The Velur Urban Cooperative Bank is one of the oldest urban cooperative

banks and it was established on 10.11.1905 and has been operating 10 kms of

jurisdiction of Velur town. It is located on the bank of the river Cauvery. It has a

population coverage of 1, 90,471 and has completed hundred years of service to the

customers. It is rendering services to the customer‘s majority of who are based in

villages and semi-urban areas. It is well managed by the elected Board of Directors. It

is functioning in its own building from 1978 onwards. It has only one branch Urban

Cooperative Bank, Near R.T.O Office, Paramathi.

Table 3.3

Progress of Urban Cooperative Banks in Namakkal District as on 2012-13

S.No Particulars NUCB TUCB KUCB RUCB VUCB

Total
Membership
1 21784 15838 21358 17846 14013

(in Lakhs)

S.No Particulars NUCB TUCB KUCB RUCB VUCB

1 Paid Up
Capital 272.94 448.59 421.39 104.70 97.36
2 Deposits 9328.72 2233.76 215.61 569.42 4554.72

3 Loans Out
Standing 7203.42 3245.73 1428.64 4318.15 3197.21
4 Reserves 489.34 141.20 697.62 190.19 142.04

5 Net Profit 107.83 28.32 14.41 41.93 39.69

Source: Annual Reports of the Urban Co-operative Banks in Namakkal

District.

86
3.11 PROFILE OF THE STUDY AREA

History

Namakkal District is a newly formed district from Salem District. It is

functioning from 01-01-1997.It consists of 5 Taluks namely Namakkal, Rasipuram,

Tiruchengode, Paramathi Velur and KolliHills. The district is bounded by Salem on

the north, Karur on the south, Trichy and Salem on the east and Erode on the West.

The Geographical area of the district is 3363, 35 K.m. This lies between 11.00 and

11.360 North Longitude and 77.280 and 78.300 East Longitude.

For Administrative purposes the district has been divided into 2 Revenue

Divisions, 5 Taluks, and 30 Revenue firkas. For local arrangements, the district has

been divided into 5 Municipalities, 15 Panchayats Unions, 19 Town Panchayats and

322 Village Panchayats. Thiruvaraikkal as it is mentioned in the inscription found on

the North West and south walls of the deserted temple on the Hill. Since it produces

major part of Eggs sent to all over other parts of our country, and is also called

―Poultry Town‖ as it contains quite a number of poultry Farms and also now called as

―Egg City‖.

The Rock Fort in Namakkal is a Special feature of the town. The Fort covers

an area of one and half acres of flat surface and is accessible from south west by a

flight of narrow steps. Namakkal was in the hands of Atikula King called Gunasila

who had married with pallava dynasity. Later the Taluk was ruled by the cholas in the

Kongu Mandalam which has over run by the cholas in the 9‖th Century and passed on

the Vijayanagar under the Viuroyultry of Madura. Namakkal was held by Killedhar

(Caption) on Hyder Ali Unit was Captured by the British in 1768.

87
 The Northern portion of Namakkal is mountainous and the southern areas are

plains. The Chief rivers run through the district are Cauvery, Aiyaru, Karipottan Aaru

and Thirumanimutharu. The Cauvery flows south and south west hugging the border.

The Garden of Namakkal District is Kollihills which is governed by

Panchayat union, comprising 16 Village Panchayats are called‘ Nadu with an area of

371.03 Sq Kms. and 1300 Mtrs above Sea level. In kollihills the Malaiyalis are the

prehistoric tribals. ‗Valvil Ori‘ the king of Kadai Yelu Vallal was ruled this hilly area.

The famous Siva temple Arappaleeswarar was originally a retreat of the jain Monks

prior to its Hindusation. The famous Water Falls namely, ‗Agash Ganga‘ situated near

the Temple.

Namakkal finds a place of importance in the map of India because of its Lorry

body building industry, a unique feature of the town. More than 150 Lorry body

building workshops and with a number of subsidiary industries of auto body works

are operating since 1960‘s. There are Lorries, Trailers and L.P.G. Tanker Lorries are

in Namakkal district. Therefore it is called as ‗Transport City ‘. Namakkal is the

major producer of Egg in Southern Region. Hence, called as ‗Egg City ‗.

The famous Tamil Poet‖ Namakkal Kavingnar Ramalingam Pillai‖ was born

in this district. In the memorize of the poet the state government established an arts

and science college for women. One of the most famous Government Veterinary

College is also situated near by Namakkal Town. More and more private

educational/technical institutions are coming up in recent a year which is blossom for

the district. The faniys Anjaneyaswami Statue which has its hight of 6.7 Mts. Was

built in 996 AD. The Narasimma Samy Temple along with Amman Temple is situated

behind the west of the Rock Fort in the Heart of the town.

88
 Rasipuram is another important taluk in Namakkal District. The Chief industry

of the town is weaving. Pttunoolkarar who belongs in Sourastra Community lives in

large numbers in this town together with kaikolar. They are weaving Cotton Cloth and

silk Sarees. Another important aspect in the taluk is the Sago production. Nearly 176

Sago factories are located in and around the Rasipuram Taluk. Sago and Starch

production in this area are exported to other countries Ghee production is also famous

in Rasipuram Taluk.

Tiruchengode is a town of cultural and historical importance. In the 19th

Century, it was the Home of the Tamil Academy called ‗Pulavar Sangam‘. Nearly 37

spinning mills and more than 10.000 Power looms are functioning in this area. One

Sugar mill and one Paper mill were functioning under Private Sector. Tiruchengode is

famous for Rig Vehicles More than 2,000 Vehicles were engaged in digging of bore

wells all over India. The Large numbers of power loom and handloom industries were

functioning in this Taluk. Arthanareeswarar temple in Trichengode is one of the

Pilgrimage center.

The famous Cauvery River flows in Paramathi Taluk. It helps more irrigation

of lands in Paramathi and Mohanur Blocks. The Mohanur Co- Operative Sugar Mills

is also situated in Paramathi Taluk in Mohanur Block.

Since the Namakkal district is a part of the Salem district, the historical

background of Salem and Namakkal remains the same. After the struggle between the

Cheras, Cholas and Pandiyan, the Hoysalas rose to power and had control till the

14thcentury followed by Vijayanagar kings till 1565 AD. Then the Madurai Nayakas

came to power in 1623 AD Two of the Poligans of Tirumalai Nayak namely,

Ramachandra Nayaka and Gatti Mudaliars ruled the Salem area. The Namakkal fort is

89
reported to have been built by Ramachandra Nayaka. After about 1635 AD, the area

came successively under the rule of Muslim sultans of Bijapur and Golkonda, Mysore

kings and then the Marattas, when about the year 1150 AD Hyder Ali came to power.

During this period, it was history of power struggle between Hyder Ali later Tippu

with the British. Tamil is the main language spoken in this district.

Fair and Festivals

Many festivals are celebrated in this district. One important festival is the

Perumal festival organized in sendamangalam during February-March. The Christian

and Muslim festivals are fewer in number. Rasipuram celebrates Christian festivals

while Tirchengodu and Namakkal taluk celebrate the Muslim festivals.

Communication

The district is well served by both rail and road transports. By broad gauge

line of southern Railway, it is connected by Salem, Mangalore, Thiruvananthapuram,

Banglore, Chennai, Mumbai and Delhi, Whereas NH7 pass through most of the taluk

headquarters. Other town and most of the Villages are connected by motor able

including state highways and Major District Roads.

Geographical Location of the District:

Namakkal district is bounded on the north by Salem district, on the east by

Attur taluk of Salem District, perambalur and Tiruchirapalli districts, on the south by

Karur district and on the west by Erode district.

The administrative headquarters of this district is located at Namakkal town.

The District lies between 110 O'09' and 110 '65' north latitude and 92 78° '23' and 79°

'45' east longitude. The general geographical information of the district is simple and

90
 flatted area. Kollimalai hill rang occurs on the east of the district. Cauvery River is

flowing in the district, which will be dry during the summer season. Namakkal district

consists of Five Taluk, namely 1. Namakkal, 2.Rasipuram, 3.Paramthivelur,

4.Tirchengode and, 5.Kolli hills. The Namakkal District is divided into 15 Block. The

details of the name of the taluk and area have shown in the following Table:

Table 3.4

S.No Name of Taluk Area in Sq.Km.

1 Namakkal 1784.09

2 Rasipuram 903.18

3 Paramathivelur 729.09

4 Trichengode 960.21

5 Kollihills 371.03

District Total 4747.60

Administrative Arrangement in the District:

Namakkal District comprises 5 Taluks, 15 Blocks and 446 Villages. As

regards the hierarchy of administrative arrangement, there are 4 municipalities, 20

Town panchayats and 331 village Panchayats in the District. The details regarding the

number of block, villages, village panchayats, town panchayats, and municipalities

with regard to each taluk.

Geography and Physical Features

The district is extensively covered with hilly ranges rocks with undulatory

plains. The Kollimalai range with peaks 1219 meters runs along the east of Namakkal

91
and Rsipuram taluk. The main products from the forest are sandalwood, bamboo,

timber/ (silver oak and similar) and firewood. The main source of revenue from the

forests is from the Sandalwood trees, which occur naturally in abundance in the

plateau and hilly ranges.

Agriculture and irrigation

The main occupation in the district is agriculture. The cultivation generally

depends on monsoon rains, wells and tanks. Nearly 90 percent of the cultivated area is

under food crops. The principal cereal crops of this district are paddy, cholam, and

ragi. Panivaragu, Samai varagu and Thinai are some of the Millets cultivated. Among

pulses, the major crops are red gram, Black gram, green gram and horse gram. Among

oil seeds groundnut, caster and gingelly (sesame) occupy important places. Of the

commercial crops, sugarcane, cotton and tapioca are some of the important crops

Tapioca is used for manufacture of sago.

The garden of Namakkal Taluk is Kollimalai which is divided between the

taluks of Namakkal and Rasipuram and locally governed by the Kollimalai Panchayat

Union comprising an area of 8681 Sq.miles and a total 256 villages and hamlets. The

people of the Kollimalai are the Malaiyalis. The mountain has been inhibited from

prehistoric times. It is much celebrated in the Tamil literature of the Sangam Period,

at least eleven poets as members. It in their poems, the forest of Kollimalai is

identified with the legendry Maduvanam (Forest of Nectar) which was ruled by the

ape king Sukriva. The wilds of Kollimalai are known for medical herbs and plants.

During much of the historical times, the mountain formed a natural barrier between

the Kongu and Chola countries. At the beginning of the Christian era it was ruled by

Mazhavers among whom Adhan on was the most renowned. The Buddhist and Jain

92
monks established a number of retreats on the hill tops one of which still contains a

shrine with the stone image of a "Theerthamkarar in it. The famous Siva Temple,

Arappalliswara Kovil was originally a retreat of the jam n monks prior to its

Hindustan. The Malaiyalis, the tribal people who now occupy the hill, cultivate grape,

honey, jackfruit, orange, pineapple, plaintain and wheat in the fertile valley.

Two rock temples dedicated to Anathasayi and Narasimhaswamy are on the

eastern and western sides of the rock. Narasimhaswamy and his consort — Namagiri

Amman are worshipped by devotees from all over India, famous mathematician

Srinivasa Ramanujam was one among them.

Namakkal finds a place of importance in the map of India because of its lorry

body building industry, unique feature of the town. More than 150 body building

workshop with a number of subsidiary industries of auto body works are operating

since 1987.

Rasipuram Taluk

Rasipuram Taluk is one of the administrative divisions of Namakkal District.

It was first contributed in 1972 as one of the nine taluks of southern division of the

Baramahal and Salem. The taluk was reconstituted in 1918 by joining parts of the

taluks of Attur, Namakkal and Salem, again reconstituted in 1940-41, consisting of

four development blocks of Kollimalai, Namagiripettai, Rasipuram and Vennandhur

Panchayat Unions. Its area was 817 sq. kilometers and population was 193,960

according to 1981 census.

Rasipuram town is situated two miles east of Salem Namakkal Road. It lies 12

Kilometers from Salem and 27 Kilometers from Namakkal. The name is derived by

some by the Vishnu temple dedicated to Svarna-Varadaraja Perumal swamy. The

town being originally called Svarna-Varadarajapuram, then Varada-Rajapuram and

93
then Rajapuram a spelling adopted on the old postal seals. The Kailashanathar temple

is a built in a contrast style that is instead of facing east the temple faces west. There

is a Bhairava temple (temple for dog ' God). It is said that in former days the key of

the main shrine was laid before Bhairava for safety and none dared to touch it.

Rasipuram was the capital of Rasipuram Nadu as mentioned in the Kongu Mandala

Chathakam.

The chief Industry of the town is weaving. Pattunulkarar live in large number

in this town together with Kaikolar, the weavers of cotton cloth. Silk sarees are

produced herewith Surat Zari. A weaver's cooperative society is functioning here.

Tiruchengode Taluk

Tiruchengode is situated 14 kilometers from Namakkal. The principal streets

form the four sides of Kailasanathar Temple an arrangement which indicates the

antiquity of the town and its religious origin. It is said that the place was once fortified

but would never have possessed any military strength.

The town derives its name from the lofty hill, 1901 feet above the sea level,

which dominates it in the South East. The Hill is precipitous almost devoid of

Vegetation. The bright and yellow of the natural rocks and the innumerable shrines

with which it is covered makes a gorgeous picture in the sunset glow. The

Arthanareeswarar temple at the top of the hill is dedicated to Arthanareeswara (half

man half woman). The 1200 steps from the floor level lead to the temple at the top

which is intercepted by several mandapas built in different years by different

personalities and each has its own history.

The Kailasanathar Temple is in the heart of the town, the entrance Gopuram is

76' in height and is said to have been built in 1064 AD by one Kondappaiyan. In

keeping with the religious origin, Tiruchengode is prolific in inscriptions, recording

94
the good deeds, done in honour of its gods. The records date back to the century

before the Norman Conquest of England. The names of Parantakal (1906 AD) and

Gangai Konda Rajendra Chola occur in the earliest. Under the Pandiyas the temples

were endowed with lands. In 1522 A.D., in the region of Krishnaraya of Vijayanagar

market tolls were made over to the temple authorities for celebrating certain festivals.

Nayaks of Madura endowed grants to the temple, inscriptions are found on the walls

of the hill temple and Kailasanatha temple.

Tiruchengode is a town of cultural and historical importance. It was known by

several names such as Thirukodimaada Chenkunrur Nagachalapuram, Thiru Yeragam.

It was the cultural centre of the Kizhkara Poonthurai Nadu. As one of the nine chief

merchantile centres of the Kongu Nadu, it was celebrated as Konagar (Royal City). In

the 19th century, it was the home of a Tamil Academy called Pulavar Sangam. Today

it continues to be one of the seven important pilgrimage centers of the Kongu country.

The northern of the town surrounding the temple is known as Kodhaiyur in memory

of Vilavan Kodhari, the general of Cheran Senguttuvan.

Paramathi Velur Taluk

Paramathi Velur Taluk is an administrative sub-division. It was also a taluk

under the Mysore rule. It was abolished in 1792 when the region came under the

British. Now Velur is the head quarters of the taluk. This town is on the northern bank

of river Cauvery also known as Vanchi. It appears to have been enclosed in a mud fort

whose remains are now completely obliterated by the Namakkal Madurai Road and is

known as Kottai Medu.

An ancient road named Vanchi Vazhi connecting Velur to Srirangam passed

through Nanjai Idaiyanr and Mohanur. Two river channels, Raja Vaykal and the

Komarapalayam Vaykal, pass through this town. The Siva Temple located between

95
the river and the Kumarapalayam Canal is dedicated to Kasiviswanathar and his

consort, Visalakshmi. The town also contains a spiritual centre.

Unlike the deities of other temples, the deity here is a lump of sacred ash

(perhaps the mortal remains of the dead heroes) placed on a wooden board suspended

by iron chains from the ceiling so as to form a swing. The deity is not washed for

obvious reasons, but scented water is sprinkled and flowers placed on it during

worship. Facing the deity on the outside of the shrine is a recently created (1981) set

of statues of guardian deities and a cuddly made stone image of a dog. The absence of

habitation around the temple is ascribed to the deity's dislike of grain pounding

sounds.

Paramathi was one of the seventeen administrative divisions of Baramahal

under the Mysore rule. It was one of the 27 taluks ceded by Tippu Sultan to the

Company in 1972 under the administration of Alexander Read; it became one of the

nine taluks of the Southern Division of Baramahal and Salem. It then contained the

Zamindari Estates of Chithur, Nanjan Idaiyaru, Velur, Pandamangalam, Paramathi,

Attur, Velur and Venkarai.

Kolli Hills

The long pending dream of tribals living a top Kolli Hills will come true with

the inauguration of Kolli Hills as a separate Taluk on Friday. Officials in the

Collectorate told The Hindu that Chief Minister Jayalalithaa will inaugurate the Taluk

through video conference from Chennai. Recently the Chief Minister (CM)

announced Kolli Hills as a new Taluk along with eight other new Taluks across Tamil

Nadu.

96
 This would be the fifth Taluk in Namakkal district. The other four Taluks are

Namakkal, Rasipuram, Tiruchengode and Paramathi-Velur. Till date Kolli Hills was

partly attached to Namakkal and Rasipuram Taluks.

Panchayats from Namakkal Taluk that would become part of Kolli Hills Taluk

are Valavanthinadu, Valapurnadu, Ariyurnadu, Thinnanurnadu, Gunturnadu,

Selurnadu and Thevanurnadu. Panchayats that would be attached to Kolli Hills from

Rasipuram Taluk are Alathurnadu, Kundaninadu, Thirupulinadu, Edapulinadu,

Chitturnadunadu, Perakarainadunadu and Pylenadunadu.

People living in those Panchayats had to travel more than 50 km by climbing

down the hill - after crossing more than 70 hairpin bends - to reach their respective

Taluk offices in Namakkal and Rasipuram to get their community, salary and

residence certificate, patta, chitta and other certificates. They can now get it atop the

hill in the Kolli Hills Taluk office.

97
 Figure No.3.2

LOCATION OF STATE OF TAMILNADU IN INDIA and

LOCATION OF NAMAKKAL DISTRICT IN STATE OF TAMILNADU

Figure No.3.3

Map of Namakkal District

98