The association of cooperative banks have sought from regulator Reserve Bank of India to consider the deregulation in interest rates in the upcoming annual monetary policy for this fiscal.

Apart from this, they have also urged for better working environment. The requests were placed to deputy governor of RBI, Mr Subir Gokarn in the pre policy meeting held.

"We have demanded deregulation of the interest regime in the forthcoming annual monetary policy as in the current interest rate scenario we will continue to bleed. Today we are forced to lend at 7 per cent to the farm sector, while we are paying at least 9 per cent to our depositors. This situation just cannot continue," the National Federation of State Co-operative Banks' managing director, Mr B. Subramanyam, said.

Also the federations have placed demand to raise the interest subvention to 4.5% from the prevailing 1.5%.