Related Topics

Cooperatives in India
2024 MAR   7
Cooperatives in India
2022 DEC   15
Cooperative Banks
2021 DEC   3

Primary Agricultural Credit Societies (PACS)

2022 JUN 29

Preliminary   > Economic Development   >   Indian Economy and Issues   >   Cooperatives

Why in news?

  • Cabinet approves digitisation of 63,000 Primary Agricultural Credit Societies.

About Primary Agricultural Credit Societies (PACS):

  • It is a village-level institution that works directly with rural residents.
  • It encourages agriculturists to save, accepts deposits from them, makes loans to deserving borrowers, and collects repayments.
  • The first Primary Agricultural Credit Society (PACS) was formed in the year 1904.
  • PACS are the lowest unit in a three-tier structure:
    • The other two tiers — State Cooperative Banks (StCB) and District Central Cooperative Banks (DCCB) — have already been automated by the NABARD and brought on the Common Banking Software (CBS).

Who regulates PACS?

  • PACS are registered under the Co-operative Societies Act and also regulated by the RBI.
  • They are governed by the “Banking regulation Act-1949” and Banking Laws (Co-operative societies) Act 1965.

Who can form PACS?

  • A primary agricultural credit society can be formed by a group of ten or more people from a village.
  • The society’s management is overseen by an elected body.
  • The membership fee is low enough that even the poorest agriculturist can join.
  • Members of the society have unlimited liability, which means that each member assumes full responsibility for the society’s entire loss in the event of its failure.

Why digitization is needed?

  • PACS account for 41% (3.01 crore farmers) of the Kisan Credit Card (KCC) loans given by all entities in the country
  • Computerisation will bring transparency and link all credit societies to a common accounting system.
  • It will also help PACS to become a nodal centre for providing various services such as Direct Benefit Transfer (DBT), Interest Subvention Scheme (ISS), Crop Insurance Scheme (PMFBY) etc.

PRACTICE QUESTION:

Consider the following statements regarding ‘Primary Agricultural Credit Societies (PACS)’:

1. Only members can make deposit in Primary Agricultural Credit Society

2. PACS are registered under the Co-operative Societies Act and also regulated by the RBI

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

                        B

">Answer