Cooperative banks still popular in rural areas

R. Sundaram

ERODE: Though many commercial, international and private banks have opened branches in rural areas, still the people in villages patronise cooperative banks. In Erode district, there is good support for the cooperative movement.

A total of 228 Primary Agricultural Cooperative Banks (PACBs) are functioning in the district and Elavamalai PACB in Erode taluk is considered a model PACB and is included as a lesson in the Cooperation subject for the Higher Diploma in Cooperation (HDC) and Cooperative Diploma course. But now, the Elavamalai PACB is in the red due to `mismanagement'.

Out of 227 PACBs in the district, 27 are now in the red. The cooperative officials said that due to improper sanctioning of loans by the board of directors, huge amounts were granted as loan to the members and most of it were granted under non-farm sector loans.

The officials said that for a property worth Rs. 1 lakh, the loan granted was double the value. Officials said that Rs. 44 crores was pending as arrears in the 27 `red' PACBs. Commercial wing personnel have arrested more than 30 directors and borrowers of the Elavamalai PACB, but have not been able to recover the amount.

Crop loan

The Cooperative officials said that this year, the Erode District Central Cooperative Bank had decided to advance Rs. 60 crores as crop loan. In view of the favourable situation in the ayacuts due to heavy rain and release of water to the canals, the bankers are hopeful of timely return of loans by farmers.

The Central Cooperative Bank here is providing stiff competition to nationalised banks in the district.

To improve the service, it has been decided to computerise all the branches of Central Cooperative Bank and six Urban Cooperative banks in the district, besides 10 PACBs at a cost of Rs. 2 crores.

Once computerisation is completed, the Central Cooperative Bank will open ATM centres in the district.

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