NABARD circular on PACS rings alarm bells in Guj co-op sector
Ahmedabad: A NABARD circular on winding up the role of primary agriculture cooperative societies (PACS) as lenders to farming community in the rural co-operative banking structure has triggered unrest in this sector in Gujarat.
Terming the proposal "bogus", the Gujarat State Cooperative Union (GSCU) has said the move threatens the very existence of over 93,000 PACS in India, which offer short-term loans for seasonal agricultural operations (SAO) to farmers.
PACS, owned by farmers, rural artisans etc, are the bottom-tier of the short-term cooperative credit structure functioning at the grassroots (Gram Panchayat) level.
"It is a bogus circular. It aims to end existence of PACS, whom we have nurtured and groomed over last 100 years. The move will bring back officers' rule and farmers will be deprived of timely credit," said GSCU president Ghanshyam Amin.
He said if PACS are disbanded the farmers will be subjected to exploitation as they will have no option but to borrow from private money-lenders. "Such scenario would adversely impact the agri production of country," Amin said.
As per RBI, the short term credit cooperative structure (CCS) comprised about 93,000 PACS, 370 CCBs and 32 state cooperative banks as on March 31, 2012.
The National Bank for Agriculture and Rural Development (NABARD) circular dated July 22, 2013 stated that PACS will not accept deposits in their accounts and will not carry out lending operation of any kind on its behalf forthwith.
"However, they (PACS) will carry out the services, both in the respect of lending operations and collection of deposits viz, collection and compilation of normal credit limit (NCL), facilitating issuance of Rupay/KCC debit cards, recovery of loans and canvassing for deposits etc. On the behalf of central cooperative banks (CCBs)/SCBs on pre-decided commission on fee basis," the circular said.