The demonetisation of Rs. 500 and Rs. 1,000 currency notes has delivered a body blow to disbursal of crop loans through cooperative institutions in Tamil Nadu at a time when it is about to gather momentum.
Village-level Primary Agricultural Cooperative Credit Societies (PACCS) draw funds from their accounts with District Central Cooperative Banks (DCCBs). Strictly speaking, they are not regarded as banks, even though they can accept deposits and issue loans. In Tamil Nadu, there are 4,480 PACCS, which during 2015-2016, mobilised Rs. 6,874.66 crore and disbursed loans to the tune of Rs. 19,409.52 crore.
For all practical purposes, such societies are equated with any other “individual bank customer”.
This means that each Primary Agricultural Cooperative Credit Society can draw only Rs. 24,000 per week from the DCCB concerned.
Against this background, fulfilling the target set by the State government for the disbursal of crop loans of Rs. 6,000 crore through all societies becomes next to impossible, say officials.
In 2015-2016, crop loans of about Rs.5,868 crore were disbursed, against the target of Rs. 5,500 crore. About 10.75 lakh farmers were benefited.
This year, around 35 per cent of the targeted amount has been achieved. The disbursal will gather pace in the coming two months as farmers will be intensifying their operations during the current Samba season The officials are also wondering as to how to meet the deadline of November 30 to ensure that the crop loans are covered under the new crop insurance scheme — Pradhan Mantri Fasal Bima Yojana.
On the one hand, village-level cooperative societies are hamstrung by the demonetisation scheme. On the other hand, the deadline for coverage under the crop insurance scheme is approaching. What has complicated the situation further is the latest ban on the District Central Cooperative Banks accepting the demonetised notes of Rs. 500 and Rs. 1,000 for exchange or deposit.
The RBI should exempt the village-level credit societies from various restrictions so that the latter’s operations are carried on smoothly, the officials explain.
Source - http://www.thehindu.com
