National Bank for Agriculture and Rural Development has rejected the appeal by District Cooperative Central Banks to relax norms on recovery to enable Primary Agricultural Cooperative Societies (PACS) to be converted into multi-service centres.
NABARD Chief General Manager Jiji Mammen, in response to a plea by Visakhapatnam DCCB Chairman Sukumar Varma, said on Wednesday that recovery percentage of 50 per cent fixed by them was quite reasonable and it was not possible to relax it further. He said as a bank, they had to stick to credit discipline.
At a discussion on converting PACS into multi-service agencies by diversifying their activity, Mr. Varma stated that among 98 PACSs in the district, only two had achieved over 50 per cent recovery.
Mr. Mammen said if they lowered the 50 per cent recovery criterion, there would be no end to demands from various quarters to lower it further. He said NABARD, the apex development bank, had been mandated to facilitate credit flow to agriculture and had already simplified the loaning norms.
He said the financial health of PACS could be improved by lending term loans at 12 to 13 per cent interest and diversifying into financing dairy, poultry, fisheries, farm implements and seed and fertilizer distribution.
APCOB Deputy General Manager K. Tulasi Prasad, NABARD AGM Prasad Rao, DCCB CEO A. Papa Rao, District Cooperative Officer T. Praveena and others spoke.