Chhattisgarh: Structure and growth of Co-operatives and their shares in total credit adequacy and problems
The cooperative banking sector is one of the main partners of Indian banking structure, the cooperative banks have more reach to the rural India, through their huge network of credit societies in the institutional credit structure. The cooperative sector has played a key role in the economy of the country and always recognized as an integral part of our national economy. Cooperatives have ideological base, economic objects with social outlook and approach. The cooperative covers almost all cent percent villages in India. The cooperative form of organization is the Ideal Organization for economically weaker sections in the country. According to recent study by World Bank and National Council for Applied Economic Research, the Primary Agriculture Credit Societies (PACS) amount for about 30 percent of micro credit in India. This paper attempts to analyze the role of co-operative bank in agricultural credit.
PACS are playing a crucial role in improving the economic and social conditions of the common masses of Chhattisgarh. They provide short-term and medium-term loan to the members/farmers at reasonable interest rates to meet their various needs. They are providing credit to the farmers for agriculture purposes at cheap and easy terms. PACS is the foundation of the Cooperative Credit System on which the super structure of the short-term cooperative credit system is built.
Short-term structure is a three tire structure with PACS in rural areas, Co-operative Central Banks at the district level and the Apex Bank at the state level. The short-term credit structure provides short-term credit for crop production and medium-term credit for small developments. Chhattisgarh State Cooperative Agriculture and Rural Development Bank (CSCARDB) at the State level and Primary CARD Bank at the Block level cater to the long-term credit needs in the two tier credit delivery system. In the short term credit structure, 1333 PACS including 476 LAMPS are functioning. In addition to this, there are 6 District Cooperative Central Banks with 209 branches. Chhattisgarh State Co-operative Apex Bank is functioning as state level financial institution. In the long term credit structure CSCARD Bank with 12 District CARD Banks including 77 branches are functioning.
In August 2004, the Government of India constituted a task force under the chairmanship of Professor A. Vaidyanathan for suggesting measures for the revival of cooperative credit institutions. The task force submitted its report in respect of a short-term cooperative credit structure and recommended a financial package of Rs 14839.00 crore for rural credit cooperative institutions. Based on the consensus arrived at with the state governments and other stakeholders on the recommendations made by the task force, the central government approved the revival package that involves financial assistance of Rs 13596.00 crore. NABARD has been designated as the implementing agency for the revival of the short-term cooperative credit scheme. A Department for Cooperative Revival and Reforms has been set up in the head office of NABARD for facilitating the implementation process. The provision of financial assistance under the package has been linked to reforms in the cooperative sector. In order to avail financial assistance under the package, the state governments are required to sign MOU. The Chhattisgarh Govt. signed MOU of 541.42 crores package on 25.09.2007.
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