Rural banking is all set to get a major boost with Nabard in association with APCOB launching a pilot scheme to transform Primary Agricultural Cooperative Societies (PACS) into Multi Service Centres (MSC).
Keeping in view that only 50 per cent of one lakh-odd PACS in the country are active, Nabard wants to release funds to APCOB to enable District Central Cooperative Banks to assist and guide the PACS sanction various types of loans – widening their base from granting only crop loans.
After helping them in project evaluation and finalising the project reports, the PACS concerned has to make its own assessment for sanction of loan to individual entrepreneurs – be it a Mee Seva Centre, godown, cold storage, one-stop shop for buying agriculture inputs, crop cutting machine or supply of tractors on rent.
The Nabard initiative is driven by the fact that the commercial banks have about 35,000 branches and Regional Rural Banks about 15,000 branches in the rural areas. “Farmers need much more. As PACS have good network and membership, we want to encourage them even to get accreditation for registration with commodities exchange, indulge in trading based on prevailing price of various items, effective market intervention,” NABARD Chief General Manager K. Ramachandran Nair told THE HINDU on Monday.
“Our intention is to see PACS as outreach of successful banking system to achieve financial inclusion,” he said. The PACS will get funds for which they have to fix the rate of interest to be charged from the beneficiaries. NABARD will collect an 11 per cent interest from them.
Mr. Nair said they would also encourage PACS to fund for add-on services to make them viable. Of 2,768 PACS, they are targeting to sanction loans to 700 in Andhra Pradesh in the first phase so as to make them frontrunners. Rs.116 crore has been sanctioned for 187 PACS in the first phase, of which Rs.20 crore has already been released.
NABARD, on its part will motivate them for capacity building, finance and accompanying measure such as by giving them grant for building backup infrastructure like computers and online connectivity.
APCOB, on its part will have a Project Monitoring Unit and DCCBs at the district level will have PACS Development Units.
