The plight of the Tamil Nadu Cooperative State Agriculture and Rural Development Bank (TNCSARDB) having become only a provider of jewel loans has compelled the State government to consider revamping the agency, which was originally meant for facilitating long-term loans to farmers.
Officials of the cooperative sector recall that after the National Bank for Agriculture and Rural Development (NABARD) imposed “stringent conditions” for re-financing in 2004, the core function of the TNCSARDB came to a halt. The institution, which till then made available resources to 180 Primary Cooperative Agriculture and Rural Development Banks (PCARDB) for lending to the farm sector for activities such as land purchase and construction of and deepening of wells, has become the lender of jewel loans. During 2019-20, the jewel loans to the tune of over ₹330 crore were given. For over 15 years, the apex bank has been supporting the PCARDBs with its funds.
As an acknowledgement of the chronic problem, the government decided to form a committee of experts and stakeholders to go into the revamp and other matters, including the merger of the long-term credit structure with the short term, the officials explain.
The move was also a sequel to the suggestion made by S. Selvaraj, NABARD Chief General Manager (CGM), at his meeting with Chief Minister Edappadi K. Palaniswami in August, citing the constitution of high-level committees by the Andhra Pradesh, Kerala and Punjab governments to re-organise the long-term cooperative credit structure.
An order issued last week by the Cooperation, Food and Consumer Protection Department named S. Nagoor Ali Jinnah, former NABARD CGM and an alumnus of the Indian Institute of Management (IIM)-Ahmedabad, as the chairman of the panel. Among the committee’s members are M.S. Sriram, Professor, IIM-Bengaluru, and M. Ravikumar, former IAS officer. Apart from the Finance Department’s nominee, the committee comprises the Registrar of Cooperative Societies, the NABARD CGM, the presidents of the State Apex Cooperative Bank and Thanjavur Central Cooperative Bank and the Managing Directors of the State Apex Cooperative Bank and the TNCSARDB.
The panel will go into the working of the TNCSARDB in the last 10 years and examine the “sustainable viability” of the institution, keeping in mind the experience gained in other States, and explore various sources of funding and lending by the bank. Dismissing the talk of failure of the merger of long-term cooperative structure with the short term in respect of Andhra Pradesh, Mr. Selvaraj, who worked in the neighbouring State for a year before coming to Tamil Nadu, points out that the Andhra Pradesh State Cooperative Bank bagged even an all-India award for 2018-19. “There might have been administrative issues initially, but now, if you look at the organisation’s functioning, its business level has gone up and performance has improved,” he says, hoping for a similar turnaround in Tamil Nadu.
