Proactive steps put them back on sound financial footing
890 banks have been revived by giving them Rs.20 lakh each in loan at 5 per cent interest
These banks and cooperative marketing societies are doing well in stock loan
CHENNAI: Primary agricultural cooperative banks have repaid the entire outstanding deposits of Rs.170 crore, pending for several years.
The financial position of these banks was so bad that many could not repay term deposits after maturity. Thanks to effective steps taken by the Registrar of Cooperatives, these banks have regained their financial strength.
Jatindra Nath Swain, Registrar of Cooperative Societies, told The Hindu that of the 4,534 banks in the State, 1,192 were dormant and 890 had since been revived.
These banks were given Rs.20 lakh each in loan at an interest of 5 per cent, as against the normal 10 per cent.
As the banks were lending at 15 per cent, they got an additional margin of 5 per cent, which stood them in good stead.
Mr. Swain said the banks and cooperative marketing societies were doing well in stock loan; they had lent farmers Rs.23 crore pledge loan in the first quarter of the current financial year, against Rs.20 crore during the whole of last year. The pledge loan, he said, helped farmers keep their produce in the godowns of the banks and the societies till they got remunerative prices. This facility fetched paddy farmers of Tiruvallur district an additional Rs.100 per bag of 75 kg.
P. Balakrishnan, general secretary of the All-India Cooperative Bank Employees Federation, said the government should take steps to revive the primary agriculture and rural development banks. Of the 170 banks in the State, 70 per cent were unable to extend farm finance as they were not being refinanced by the NABARD. The government had promised to give Rs.100 crore for minor irrigation with refinance from the NABARD. It should speed up the process.