“Jai Sahkar”
SHORT
TERM CREDIT STRUCTURE
Dr.Balraj
Vishnoi
States
successfully provides its services to the rural farming community to provide
short term agriculture loan for: a) Agricultural needs; b) Rural development
purpose; c)Non-agricultural loans based
on various programmes ; d) Employment oriented schemes; and significantly e)
Short term loans. FFor instance RSCB enhances Short term Co-operative Credit
Structure with innovative banking and secure financial services with the
objective to Serve Rural areas in particular.
State
Cooperative Bank Ltd (SCB) is an Apex institution of the District Central
Cooperative Banks (DCCBs) functioning in the state. The governance of Primary
Agriculture Cooperative Societies (PACS) meant for villages, District Central
Cooperative Banks(DCCBs) & RSCB is ensured by elected board.
Functional and Structural System
In
order to achieve the objectives of the Cooperatives, an extensive net-work is
available to cater the needs of rural masses at their door-step with a three
tier short-term cooperative credit delivery system.
At
the Apex level, Rajasthan State Cooperative Bank (RSCB) with its 5 Regional and
8 local (Jaipur) Branches in the State. At the District level 29 DCCBs covering
33 Districts of the State having 409 Branches.
At
the grass-root level 5389 PACS/LAMPS which covers 100% of the geographical area
of the state, i.e., 42955 villages.
PACS
are the backbone of Short-term Cooperative Credit Structure. Out of 5389
PACS/LAMPS in the state, 4117 PACS working as Mini Bank were collecting
deposits from their members. Total deposits of these Mini Banks stood at
Rs.805.69 crores as on 31.3.2011AND show variation by 2013 in terms of target
and deposits not up to mark.
SHORT TERM COOPERATIVE STRUCTURE
RBI
NABARD
RSCB
DCCB
BRANCHES
FOCUS:
1
issue Kisan Credit Card to all eligible farmers.
2To
increase the borrowing membership by the end of March, 2013.
3
To inculcate thrift habits in rural areas by mobilizing rural savings through
PACS/MINI Banks and branches of DCCBs. GSS(PACS/LAMPS)
4
To implement Life Insurance/ Personal Accidental Insurance/ Crop Insurance
Schemes/Group Health Insurance Scheme covering borrowers & customers of
Cooperative Sector.
5
To release farmers from the clutches of money lenders by providing cheaper and
timely institutional credit.
6
To increase investment credit to farmers to create/enhance capital formation in
the state.
7
To support State Government's efforts to implement the revival package for
Short-term Cooperative Credit Structure.
8
To promote farmers club & SHGs ensuring. Credit linkage of Maximum SHGs
& special efforts for women SHGs.
9
To bring about technological changes in the Short-term Cooperative Credit
Structure.
10
To enhance corporate image of cooperative banking in general and Apex Bank in
particular.
11
To start branches of Mini banks in more than 4000 Bharat Nirman Rajeev Gandhi
Seva Kendra’s constructed at Gram Panchayat Level.
12
To complete the Computerization of PACS under Vaidynathan Revised Package by
Nabard so that Uniform Common Accounting System (CAS) and Management
Information System (MIS) are successfully implanted.
KISAN CREDIT CARD
In
the State of Rajasthan, the crop loans were disbursed in the cash credit form
based on " Sri Ganganagar or Punjab Pattern" even prior to the
introduction of Kisan Credit Card(KCC) Scheme. However, with the introduction
of KCC scheme, loan disbursement procedure has been renamed accordingly. At
present all crop loans are being disbursed under
KCC.
The State Govt. has also taken keen interest to see that more and more KCC are
issued to the eligible farmers of the state. Short term cooperative credit
structure of the state has issued KCC not op up to expectation by 31st
March,2013.
DIVERSIFICATION OF LOAN PORT-FOLIO
In
last few years concerted efforts have been made to diversify loan portfolio so
as to provide an opportunity to DCCBs to cross subsidize their losses in
traditional crop loan business. Consequent to above deliberated efforts, DCCBs
have been able to develop investment portfolio over a period of time.
In
this endeavor NABARD has introduced lots of new schemes
viz;
water harvesting structure, organic farming, agri-clinic /agri-business
centers, aromatic and medicinal plantation, onion storage structure,
horticulture, self help groups, house building, swarojgar credit card etc. for
which DCCBs can avail refinance from NABARD and can further diversify their
farm and non-farm investment portfolio. Apex Bank on its part has been pursuing
DCCBs to finance for innovative activities, the sole purpose of which is to
diversify the loan portfolio of these banks and to facilitate economic
development through creation of assets in the rural areas of the state.
COMMERCIAL LOAN SCHEMES
Ever reducing margin on agricultural
lending made diversification need of the time. Consequent to this concept
several loan schemes were launched from time to time keeping in view the
requirement of general public of the state. Most of the schemes have been
adopted by DCCBs, some of them are as under: -
1 Personal Loans.
2 Vehicle Loans.
3 Working capital finance to the
existing & new indutrial units.
4 Cash Credit limits.
5 Krishak Mitra Yojana
6 Aawas and Vyavasayik parisar loan
Scheme.
7Swarojgar Credit Card Scheme.
8 Gyan Sagar ( Education) loan
scheme.
9 Financing against N.S.Cs &
Securities.
10 Avika Sahkari Credit Card Scheme
for Sheep rearing.
11 Viswas Yojna for handicapped
persons (FAILURE IN RAJASTHAN ).
12 Loan against property
CREATING INNOVATIVE FINANCIAL PRODUCT FOR THE POOREST OF THE
POOR (SELF HELP GROUPS):
Under the micro-credit system
promoted by Short Term Cooperative Credit Structure in the State, the
DCCBs/PACS have been playing the role of facilitators to organize Self Help Groups
of specially the women clientele to address their common socio-economic needs
by pooling their resources to make available small interest bearing loans to
their members.
The process helps them in
inculcating saving habits and imbibes the essentials of financial
intermediation including prioritization of needs, setting terms &
conditions, accounts keeping & building financial discipline by handling
resources of a size beyond their individual capacities. These groups are
graduated to be linked with DCCBs/PACS. Since beginning of the SHG-Pilot
project new SHGs have been formed and most SHGs were benefited by providing
cumulative credit.
WEATHER BASED CROP INSURANCE
SCHEME:-
State Govt. has launched Crop.
Insurance scheme from Kharif Crop under which
prescribed Crops in the notified area are being insured. During Kharif 2013
cropsrural farmers was insured at minimum premium; remitted to insurance
companies.
*RBI Report:
Micro Credit
Loans provided by banks directly and
through SHG/JLG mechanism will be eligible to be classified as priority sector
advances subject to the conditions given below:
i.
Income
limit of the individual beneficiary is ` 60,000 p.a.
in rural areas and ` 120,000 p.a. in non-rural areas.
ii.
Loan
does not exceed ` 50,000 per beneficiary.
iii.
Loan
is without collateral.
*Loans Individual/SHGs
The banks should obtain from MFI, at
the end of each quarter, a Chartered Accountant’s Certificate stating,
inter-alia, that (i) 85 percent of total assets of the MFI are in the nature of
‘qualifying assets’, (ii) the aggregate amount of loan, extended for income
generation activity, is not less than 75 percent of the total loans given by
the MFIs, and (iii) pricing guidelines are followed.
Cooperatives as an important financial player in rural
economy
Cooperative system was created as an
important institutional framework for ensuring necessary credit flow to
agriculture. Rural cooperative credit institutions have played a large role in
providing institutional credit to the agricultural and rural sectors in the
past. However, contribution of cooperative sector in the upliftment of rural
economy has drastically reduced over the years. Out of the total direct
institution credit for agriculture and allied activities, loans issued by
cooperatives was 23.9 per cent in 2008-09, down from 46.2 per cent a decade
ago. This ratio, however, improved in case of SCBs from 44.8 per cent in
1998-99 to 65.3 per cent in 2008-09.
There is, therefore, a need to
revitalize the cooperative sector by ensuring speedy implementation of the
Vaidyanathan Committee recommendations. The key recommendations of the Committee were related to encouraging such
institutions for product restructuring, institutional restructuring and
allowing them to borrow from any financial institution. So far, 25 State
Governments have signed the MoU with Government of India and NABARD, comprising
more than 96 per cent of the rural cooperatives operating in the country.
Target groups under Agriculture and allied activities
In order to have focused approach for
meeting the credit needs of different groups under agriculture sector, target
groups are classified as under:
a. ‘Small & Marginal farmers
including SHGs, JLGs and other aggregators exclusively of SFMF;
b. Other individuals, aggregators and
proprietorship firms;
c. Others such as corporates,
partnership firms & institutions.
Sub-target for small and marginal farmers
The definition of Small and Marginal farmer is given
below:
Small Farmer: A farmer with a landholding of more
than 1 hectare but less than 2 hectares
Marginal Farmer: A farmer with a landholding of up to 1 hectare.
MANAGEMENT INFORMATION SYSTEM (significance)
Robust Management Information System
(MIS) is a sine qua non for effective monitoring of performance, understanding
the gaps and formulating right policy responses. With adoption of technology by
banks, the scope for better MIS exists. Technology has changed the face of
banking in India and it can as well enhance quality and timeliness of data.
Processing of data into useful information for MIS and decision support systems
in individual banks as well as at aggregate level is important. For this, a
uniform data reporting standards need to be put in place which will reduce
reporting requirements and improve overall efficiency. Keeping this in view,
there is a need to review the existing MIS prevalent in banks, and suggest ways
to streamline the same in terms of frequency of compliance, data consistency
and data integrity.
Towards
credit cooperative reform
Since
the 1990s India has taken steps to liberalize its financial sector. These
reforms were first mainstreamed in the government-owned commercial banks and
subsequently among the regional rural banks (RRBs), but not in the rural CCS. A
comprehensive reform program to transform India’s CCS has been prepared in
recent years (Vaidyanathan 2004) and is now being implemented. Announced in January 2006, the reform package
was “designed to transform the potentially viable CCBs into democratically
governed, efficiently managed, financially sustainable, self-reliant entities
that can provide a wider range of financial services to the rural poor”.
Legal reforms are to be geared at
full independence and autonomy of cooperative institutions; regulatory reforms
at effective enforcement of RBI’s prudential regulations and corporate
governance standards; operational reforms at uniform financial reporting and
internal control systems, improved credit appraisal and risk management, and
new staffing policies; and restructuring at cleaning the balance sheet.
Since
2006 Nabard has been implementing the reform package on behalf of the
Government of India. Total cost of the short-term CCS at the all-India level
was estimated at Rs136bn (US$3bn): 92% for cleaning up accumulated losses and
8% for audit, human resource development, and technological support. The costs
are to be shared by the central government (68%), state governments (28%) and
the CCS (4%). The central government (GOI) is to provide its share as grants,
while the states are to meet their share from their budget or through open
market borrowing. In support of the revival package, ADB sanctioned a loan of
US$1 billion, the World Bank US$600 million and KfW €130m to GOI. GIZ, the
German Agency for International Cooperation, in cooperation with DGRV, the
German Cooperative and Raiffeisen Association, is among the agencies providing
technical assistance, with a focus on an improved audit system and the
development of a competence-based training certification system. In 2007 one of
Nabard’s first acts of implementing the Revival Package for the Short-Term
Credit Cooperative System aimed at internal control and financial transparency
of the PACS, by preparing an obligatory Common Accounting System (CAS) and
Management Information System (MIS) together with handbooks,[1]
followed by similar initiatives for the DCCBs and SCBs, with inputs by GIZ and
DGRV. Implementation of the CAS/MIS, including capacity building[2]
and consolidation of reporting up to state and national levels, is a still
ongoing, a challenging process.
By
March 2012, 25 states (out of 28) participated. The number of PACS has been
declining due to mergers and closures. Special audits had been completed of
80,837 PACS in 25 states, and of 319 Credit Cooperative Banks (CCBs) in 15
states. Recapitalization assistance had been released to 54,715 PACS, amounting
to US$2.28 billion, with a share of 79.1% from Union Government, 7.5% from
state governments and 13.4% from the CCS/PACS. The CCS question the likely
outcome insofar as the main focus, next to internal control of CAS and MIS on recapitalization.
RBI
annual report
STCR
of GOI
KVIC and UNDP assistance, Dr.Balraj
Vishnoi / Cooperative Department, Rajasthan.
RSCB
ltd Rajasthan/Apex bank progress and profile
Nabard
circulars 71/DCRR-04/2007 (18.5.07), 157/DCRR-15/2007 (23.8.07), 123
/DCRR-09/2007-08 (19.7.07).
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