A

PROJECT REPORT
ON
ROLE OF COOPERATIVE BANK IN AGRICULTURAL
CREDIT: A STUDY BASED ON ROPAR
A training report submitted in partial fulfillment of the
requirement for the degree of
BECHELOR OF BUSINESS ADMINISTRATION
Batch 2012-15
Submitted by: Manpreet Kaur
Course: BBA
University Roll No

DECLARATION

We hereby declare that the project report entitled ROLE

OF COOPERATIVE BANK IN AGRICULTURALCREDIT: A
STUDY BASED ROPAR.

Submitted to School of Management Studies, Ropar

Institute of Management and Technology in partial
fulfillment of requirements of BBA programmed is a
bonafide work carried out by Manpreet Kaur under the
guidance of Rupinder Kaur. This has not been submitted
earlier to any university for the reward of degree or
published any time before.

Teacher signature:
Student signature:

ACKNOWLEDGEMENT
3

I acknowledge with gratitude my thanks to Mr. Dilraj

Singh Manager of the Roper central cooperative Bank
.Ltd. to provide me for undergoing 6 Month Training .
My special thanks to all the staff members of the ropar
central

cooperative bank Ltd. for their valuable

suggestions.
I express our profound gratitude to Miss Rupinder Kaur,
Assistant Professor of our Department of Management
Studies for her expert guidance in this training project

Teacher Signature:
Student Signature:

INDEX

INTRODUCTION
ABOUT THE BANK
ABOUT THE PROJECT
REVIEW OF LITERATURE
RESEARCH METHODOLOGY
OBJECTIVES OF THE STUDY
METHODSOF DATA COLLECTION
DATA ANALYSIS
FINDINGS
LIMITATIONS AND SCOPE
SUGGESTIONS AND CONCLUSION
BIBLIOGRAPHY

INTRODUCTION OF CO-OPERATIVE BANK

A co-operative bank is a financial entity which belongs to

its members, who are at the same time the owners and
the customers of their bank. Co-operative banks are often
created by persons belonging to the same local or
professional community or sharing a common interest.
Co-operative banks generally provide their members with
a wide range of banking and financial services (loans,
deposits, banking accounts). A bank that holds deposits
makes loans and provides other financial services to
cooperatives and member-owned organizations. Also
known as Banks for Cooperatives.

Its a bank made for the economically weaker section of

the society, those banks help them getting loans in lower
interest etc. You can say like for farmers or any small
scale undertakings or transactions.

While the co-operative banks in rural areas mainly

finance agricultural based activities including farming,
cattle, milk, hatchery, personal finance etc. along with
some small scale industries and self-employment driven
activities, the co-operative banks in urban areas mainly
finance various categories of people for self-employment,
industries, small scale units, home finance, consumer
finance, personal finance, etc .

Though registered under the Co-operative Societies Act of

the Respective States the banking related activities of the
co-operative banks are also regulated by the Reserve
Bank of India. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative
Societies) Act, 1965.

DEFINATION OF A COOPERATIVE BANK

Cooperative banks are organized and managed on

the principle of cooperative, self-help, and mutual help.
They function with the rules of one member, one vote
Function on no profit, no loss basis. The cooperative
banks as a principle do not pursue the goal of the
banking function of deposit mobilizations, supply of
credit and provision of remittance facilities.
So cooperative banks provide limited
banking

products

and

functionally

specialists

in

agricultural related products. However, the cooperative

banks now provide housing loans also.
The state cooperative banks (SCBs) ,
central cooperative banks (CCBs), and the urban
cooperative banks(UCBs) can normally extent housing
loans to individual. The cooperative banks do banking
business mainly in agricultural and rural sectors.
However, state
cooperative banks (SCBs), central cooperative banks
9

(CCBs), and the urban cooperative banks (UCBs)

operate in semi urban, urban and metropolitan areas
also. The urban and the non agricultural business of
these banks has over the years.
PRIMARY COOPERATIVE CREDIT SOCIETY

It is a village institution , which directly deals with the

rural people .It encourages savings among the
agriculturalists , accept deposits from them, gives loan
to the needy borrowers and collects repayments. The
funds of the society are derived from the share capital,
deposits of members and loan from CCBs. The
borrowing powers of the members as well as of the
society are fixed .

10

CATEGORIES:
There are two main categories of the co-operative banks.
(a) Short term lending oriented co-operative Banks within this category there are three sub categories of
banks viz state co-operative banks, District co-operative
banks and Primary Agricultural co-operative societies.

(b) Long term lending oriented co-operative Banks within the second category there are land development
banks at three levels state level, district level and village
level.

11

The co-operative banking structure in India is divided

into following main 5 categories:
1. Primary Urban Co-op Banks.
2. Primary Agricultural Credit Societies.
3. District Central Co-operative Banks.
4. State Co-operative Banks.
5. Land Development Banks.

12

FUNCTIONS OF CO-OPERATIVE BANK

Co-operative Banks are organized and managed on

the principal of co-operation, self-help, and mutual
help. They work on the basis of no profit no loss.
Profit maximization is not their goal.

Co-operative bank do banking business mainly in the

agriculture and rural sector. However, UCBs, SCBs,
and CCBs operate in semi urban, urban, and
metropolitan areas also.

The State Co-operative Banks (SCBs), Central Cooperative Banks (CCBs) and Urban Co-operative
Banks (UCBs) can normally extend housing loans up
to Rs 1 lakh to an individual. The scheduled UCBs,
however, can lend up to Rs 3 lakh for housing
13

purposes. The UCBs can provide advances against

shares and debentures.

FINANCE FUNCTIONS:

Cooperative banks in India finance rural areas under:

Farming.
Cattle.
Milk.
Personal finance.
Cooperative banks in India finance urban areas
under:
Self-employment.
Industries.
Small scale units.
Home finance.
14

 Consumer finance.

Personal finance.

15

STRUCTURE OF CO-OPERATIVE BANK IN INDIA

The State Co-operative Bank (SCB) which is also known

as the Apex Bank among the co-operatives functions at
the state level. At the district level, there is the District
Central Co-operative Bank (DCCB) for each district. At the
base of the pyramid there are the Primary Credit
Societies or the Primary Agricultural Credit Societies
(PACS) which cover small towns and villages. Each higher
level co-operative bank is a federation of those below
having membership and loan operations restricted to
their affiliated units.

SCB - The State Co-operative Bank.

DCCB - The District Central Co-operative Bank.

16

PACS - The Primary Agricultural Credit Societies.

PRIMARY AGRICULTURAL CREDIT SOCIETY

At the base of the co-operative credit structure are the

primary agricultural credit societies (PACS) occupying a
predominant position. The organization of PACS dates
back to 1904 when the first co-operative credit society
act was passed. These societies were started with the
main objective of providing cheap credit to farmers. They
interact directly with the borrowers by providing them
loans and collecting the repayment of loan already given.
They are the basic units having links the ultimate
borrowers and the hire financing institutions.

17

DISTRICT CULTURAL CO-OPERATIVE BANK

There are now 351 DCCBs which land about Rs. 14000
crore annually. The Central Co-operative Bank is usually
located at the head quarters of the district. Central Cooperative banks are generally of two types one is the
membership type i.e. federating members known as
'Banking Union' and the other is the mixed membership
type, consisting of both primary members and individual
having some financial status, influence or special
business experience in the field of co-operative banking.
The main function of Central Co-operative Banks is to
land money to their affiliated primary societies

18

STATE CO-OPERATIVE BANK

There is 29 STATE Co-operative Banks in the country. The

SCBs have assumed a key position in the co-operative
credit structure because it is only through them that the
RBI provides loans and advances to agriculturist.

19

DCCBs of PSCB (District Central Cooperative Banks):

S. NO.

NAME OF THE CENTRAL

COOPERATIVE BANK

LOCATION

PHONE NO.

1.

AMRITSAR CENTRAL
COOPERATIVE BANK

AMRITSAR

0183543351,543076

2.

BHATINDA CENTRAL
COOPERATIVE BANK

BHATINDA

0164-212104

3.

FARIDKOT CENTRAL
COOPEATIVE BANK

FARIDKOT

0163950144,50225

4.

FAZILKA CENTRAL
COOPERATIVE BANK

FAZILKA

0163422245,25245

5.

FEROZEPUR CENTRAL
COOPERATIVE BANK

FEROZEPUR

0163246680,46082

6.

GURDASPUR CENTRAL
COOPERATIVE BANK

GURDASPUR

01874-30355

7.

HOSHIARPUR CENTRAL
COOPERATIVE BANK

HOSHIARPUR

0188224100,20771

8.

JALANDHAR CENTRAL
COOPERATIVE BANK

JALANDHAR

0181224571,224298

9.

KAPURTHALA CENTRAL
COOPERATIVE BANK

KAPURTHALA

0182233469,33223

10.

LUDHIANA CENTRAL
COOPERATIVE BANK

LUDHIANA

0161411966,441281

11.

MANSA CENTRAL
COOPERATIVE BANK

MANSA

0165225381,25078

12.

MOGA CENTRAL COOPERATIVE

BANK

MOGA

0163623629,29520

13.

MUKTSAR CENTRAL

MUKTSAR

01633-

20

COOPERATIVE BANK

62078,64457

14.

NAWANSHAR CENTRAL
COOPERATIVE BANK

NAWANSHAR

0182323977,20034

15.

PATIALA CENTRAL
COOPERATIVE BANK

PATIALA

0175224758,217053

16.

ROPAR CENTRAL
COOPERATIVE BANK

ROPAR

0188120412,20481

PRESENT SITUATION OF THE CENTERAL COOPERATIVE BANK

Name

"The CENTRAL CO-OPERATIVE

BANK (ROPAR).
Establishment

1927.

Approved by

RBI (Reserve Bank of

India).
Address of Head Office

Railon Road.

Near D.A.V School,

21

ROPAR. (Phone no. - 01881220412).

E-mail

ccb_ropar@yahoo.co.in

BRANCHES
A part from its head office at Ropar, The Bank has been in
the services of the people through a network of its 26
branches spread over the district.
Name of Branches:

22

Chairman

Gurnam
Singh
Thekadar
Managing Director Harpal Singh
Name
of
the EVENING
BR. DUMEW
Vice Chairman
Udam Singh
Branch
ROPAR
AL
Distt. Manager
Bhaskar Kattaria
CHANDIGARH
GHANAULI
Director
Harnek singh
MORINDA
BELAHarjinder Singh
Avtar Singh
CHAMKAUR SAHIB S.M.MOR
Mohan Singh
Baldev Singh
NANGAL
KAINAUR
Senior Manager
Gurmail Singh
NURPUR BEDI
DHER
Charanjit Singh
Branch Manager
Dilraj Singh
ANANDPUR SAHID BHATARGARH
MIANPUR

CHAKLAN

ROLU MAJRA

JHALLIAN KALLAN

BBHAPAUPLI

SUREWAL

TAKHATGARH

SUKHE MAJRA

PURKHALI

B.O.ROPAR

KIRATPUR SAHIB

EXT. COUNTER A.P.S

Board Of Directors

23

Management & Organization Set Up:An organization may have various level of
management. The term Level involves the persons
arranged in a series. When several activities of enterprise
are geographically dispersed in different locations,
territorial or geographically may be adopted. All activities
relating to a particular area or zone may be grouped
together under one zonal manager or head. There may be
further sub-division of activities under one zonal manager
as illustrated below

24

OBJECTS:
The objects of banks are to facilitate the
operations of the affiliated Coop. Societies. In pursuance
of the objects the bank may undertake the following

Activities:
To carry on banking and credit business.
To provide credit facilities to its members on as
convenient terms as practicable,
To encourage thrift and saving amongst its
members by offer suitable facilities;
To make arrangement for supervision and
inspection
of
its
affiliated
Co-operative
Societies.
To undertake such measures as are conductive
to the spread of Cooperative Education and
training.
To do all such other things as are incidental or
conducive to the promotion or advancement or
objects of the Bank.
To solicit or procure insurance business as a
Corporate Agent.

25

MEMBERSHIP

The following shall be eligible for membership of the

bank:1. Co-operative societies registered within the area
of operation of the bank.
2. No individual shall be admitted as the member of
the bank (shares of existing individual members
shall be retired in the manner prescribed in the
Punjab Cooperative Societies Act and the rules
framed there under.)
Nominal membership will be opened to a person
or a class of persons, coop. society or a class of
societies. Alternatively, an association or a class of
associations approved by the Registrar. For this
purpose, by any
admitted

general or special

order and

by the board to enable the bank to

transact the

business with, provide the banking

facilities and render service to them such as the

advances overdraft, cash credit bill,

discounting
26

etc. A written application for nominal membership

shall be submitted in the form along with an
admission fee of Rs.200/- which shall be nonrefundable.
The bills purchased/discounted should be treated
as overdue if the same remain unpaid interest
may be charged to such overdue bills and taken
to profit and loss account provided and matching
provision is made.

27

Main activities/functions of the bank:To accept deposits of money from the public for the
purpose of lending and investment.
Services provided by the bank:I. Deposits:

II. Loans:a)
Loans

Saving Bank Account

Current Deposit
Fixed Deposit
Long-term Deposit
Recurring Deposit

to Public:
Consumer durable loans
Personal Loan to salary class
Housing Loan
Sehkari Education loan

b)
Loans to Central Cooperative Banks:
(Re-finance)
Short term agriculture loan
Medium term agriculture loan

28

 Short term non-agriculture

(Consumption Loan)

loan

c)Non farm sector loan:

Two wheeler loan to farmers
Cash Credit Fertilizer
Cash Credit Limit to Cooperative
Sugar Mills
Tube well
Poultry
Dairy development

29

INCOME RECOGNITION NORMS

Income recognition norms should be the main objective.
The basic aim of which is recovery than on any subjective
consideration. Unrealized income should not be taken to
profit and loss account. The recognition norms are as
follows:

1.) INTEREST INCOME

As per guidelines, interest income has been divided into
three categories:Interest received
Interest due not realized
Accrued interest
Interest received accrual interest can be
taken as income to the profit and

loss subject to

condition the accrued interest should be realized in next

year. A matching provision for the interest accrued to the
extent it could not be realized, should be made. These
30

guidelines are applicable even to those loans accounts

which are backed by Government Guarantees and the
interest from discounting of bills.
Interest due but not received cannot be as
income in the profit and loss account. This condition will
be

applicable

in

case

of

Government

Guaranteed

advances. However interest on advances against term

deposits, NSCs, IVPs, KVPs & life policies may be taken to
income A/C on the due date provided adequate margin is
available in these accounts.
In order to comply with these
guidelines, it is not necessary that bank should keep
unrealized

interest

in

separate

A/C

as

interest

receivables. At the end of the year calculate the

unrealized interest using the formula as given and create
the provision for the same in the profit and loss account
to only interest received.

31

INCOME FROM RE NEGOTIATED / RESCHEDULED

OUTSTANDING DEBTS
Some relaxation is given to banks under these guidelines
banks are allowed to recognize interest as income
whether received or not in the context of rescheduled
loan accounts. The relaxation is available over the period
covering the renegotiated or rescheduling of credit. When
rescheduled period is over, interest will be recognized as
the income in the profit and loss account if received.

GUARANTEES

CREDIT

FACILITIES

BACKED

BY

GOVERNMENT
In the case of credit facilities
backed by government guarantee, Overdue interest
can be take to profit and loss account only if matching
provision is made.
32

CREDIT FACILITY IN THE FORM OF BILLS PURCHASE

The bills
purchased/discounted should be treated as overdue if the
same remain unpaid interest may be charged to such
overdue bills and taken to profit and loss account
provided and matching provision is made.

33

CONCEPTUAL FRAME WORK

Financial sector reforms in India has progressed

on aspects like interest rate deregulation, reduction in
reserve requirements, barriers to entry, prudential norms
and

risk

based

supervision.

But

progress

on

the

structural-institutional aspects has been much slower and

is cause for concern. The sheltering of weak institutions
while liberalizing operational rules of the game is making
implementation of the operational changes difficult and
ineffective. The changes required to tackle the NPA
problem would have to span the entire gamut of judiciary,
polity and bureaucracy to be truly effective.

34

After nationalization, the initial

mandate that banks were given was to expand their
branch network, increase the savings rate and extend
credit to the rural & SSI sectors. This mandate has been
achieved admirably. Since the early 90s the focus has
shifted towards improving quality of assets and better
risk management.Thedirected lending approach has
given way to more market driven practices.
The Narsimham Committee has
recommended prudential norms on income recognition,
asset classification and provisioning.
In a change from the past, income recognition is now not
on an accrual basis but when it is actually received. Past
problems faced by banks were to a great extent
attributable to this. Classification of what an NPA is has
changed with tightening of prudential norms. Currently an
asset is non-performing if interest or installments of
principal due remain unpaid for more than 90 days.
These basic principles include:
The safety of the advance
Purpose for which the loan is given
35

 Liquidity
Security
Profitability

The banks, because of the very nature of their deposits

being received from the public, should assess properly
the need of the borrower. There are no set rules or
methods to appraise loan application.

36

ROLE OF COOPERATIVE BANK IN AGRICULTURAL

CREDIT: A STUDY BASED ON ROPAR

ABSTRACT
37

The cooperative banking sector is one of the main

partners of Indian banking structure, the cooperative
banks have more reach to the rural India, through their
huge network of credit societies in the institutional credit
structure. The cooperative sector has played a key role in
the economy of the country and always recognized as an
integral part of our national economy. Cooperatives have
ideological base, economic objects with social outlook
and approach. The cooperative covers almost all cent
percent villages in India. The cooperative form of
organization is the Ideal Organization for economically
weaker sections in the country. According to recent study
by World Bank and National Council for Applied Economic
Research, the Primary Agriculture Credit Societies (PACS)
amount for about 30 percent of micro credit in India. This
paper attempts to analyze the role of co-operative bank
in agricultural credit.

Keywords : Cooperative Bank, Agricultural Credit, Rural

Development, PACS
INTRODUCTION

38

India is agricultural based country and its 70% population

stay in rural area. The cooperatives which are the life
blood of the Indian economy and the mechanism for any
developmental programs. Especially in an agriculture
dominated rural sector, cooperative banks play a pivotal
role in bolstering the common individual and financing his
business and personal needs. The cooperative credit
structure is serving the Indian society since 1904 and
since then it has seen several ups and downs. Despite of
several limitations such as restriction of area of
operations, limited clients, small volume of business,
political interference, this movement is standing since
last 108 years and serving the societies. Economy of the
Punjab is mainly dependent on agriculture as more than
80% of the total population is engaged in this sector. The
Punjab Government has implemented from 2008-2009
the scheme of providing agricultural loans at the rate of
3%. Punjab is basically known as Wheat Bowl The State
has witnessed tremendous growth in the cooperative
sector. Empirical analysis results show that the increase
in the level of agricultural loans granted by the
cooperative banks positively influence development of
agriculture in India.

39

REVIEW OF LITERATURE / COMMITTEE REPORT

Credit is a crucial input process of development. For

historical reasons, Indian farming community failed to
make huge investments in agriculture. There is an adage
which says that Indian farmer is born in debt, lives
40

in debt and dies in debt. In order to mitigate the

problems of the farming community, the Cooperative
Credit Societies Act was passed in 1904, which permitted
the formation of credit societies. They provided
institutional support to farmers for short, medium and
long term purposes. Subsequently, tiers at state and
district levels were too conceived to strength these credit
co-operatives. Apart from these cooperative institutions,
nationalization of commercial banks and introduction of
regional rural banks also helped in increasing credit
supply to farmers. As mentioned before, by now the
Indian credit cooperatives have a century long history.
During this period these institutional financing agencies
failed to a large extend, to meet the requirements
(consumption and production) of the farmers. Some of
the factors responsible for their failure are inadequate
supply of credit, poor recovery, demand-supply gaps,
interference by politicians, lack of monitoring, misutilisation of credit, problems in identification of target
groups, high transaction costs, and lags in time, natural
calamities and competition from informal credit agencies.
A number of committees such as the Rural Banking
Inquiry Committee (1949), the All India Rural Credit
Survey Committee (1954), the Committee on Cooperative
Credit (1960), the All India Rural Debt and Investment
Survey (1962), the All India Rural Credit Review
Committee (1969), the Working Group on Rural Banks
(1975), the Committee to Review Arrangement for
Institutional Credit for Agriculture and Rural Development

41

(1981), the Agricultural Review Committee (1989) and

the Narasimhan Committee (1991 and 1998)

42

OBJECTIVES

43

 To study the performance of cooperative banking in

respect of agricultural credit and rural development.
To study the role of cooperative bank in agricultural
credit.
To study the agricultural credit structure of the
cooperative bank.

HYPOTHESIS

44

Cooperative banking is an important sector in Punjab as

far as its role in agricultural credit and socioeconomic
development of Punjab is concerned. It has no alternative
in the era of economic reforms also.

AREA OF THE STUDY

The study is based on the agricultural credit of

cooperative bank of Punjab in Ropar. Therefore, study
covers Ropar to the fulfillment of objectives of the study.

PERIOD OF THE STUDY

For collection of the secondary data on the agricultural

credit of the cooperative bank, three years i.e. from 20132014 to 2014-2015 were taken as the reference period.
The required primary data were collected from the
members and actual own experience in the field and
discussion with all concerns during the year 2013-2014.

RESEARCH METHEDOLOGY AND DATA COLLECTION

45

The present study is based on the secondary data

published by office of the Registrar of Cooperative
societies Ropar. The required data and literature for the
study purpose were collected from the number of
reference books, Journals and Internet.

Short Term Agricultural Cooperative Credit

Distributions and Recoveries

46

Table 1 shows the short-term credit distribution and Table

2 presents short-term credit recoveries for the last three
years from 2009-2010 to 2011-2012. Graph 1 and Graph
2 show the same. The credit distribution was increased
year by year and recovery of credit was poor.

Table 1. Short-term Agricultural Loan Distribution

Year

Khari Rabi

Total
47

f
2012-2013
8214 12417 94558
1
2013-2014
9078 20809 111674
4
2014-2015
1217 5203
126942(up to 31.12.2014)
39
Source: Cooperative Department Report 2013-2014.
*(Figures- Rs. in lakhs)

140000
120000
100000
80000
Kharif
Rabi

60000
40000
20000
0
2012-2013

2013-2014

2014-2015

Graph1: Short- term Agricultural Loan Distribution

48

Table 2.Short-term Agricultural Loan Recovery

Year

Demand

Recovery

2012-2013
2013-2014
2014-2015

148086
170724
188864

114659
133681
68210

% of
Recovery
77
78
36
(31.12.2014)

200000
180000
160000
140000
120000
Demand

100000

Recovery

80000
60000
40000
20000
0
2012-2013

2013-2014

2014-2015

Graph2: Short-term Agricultural Loan Recovery

49

Long-term Agricultural Cooperative credit

distributions and recoveries
Table 3 shows the long term credit distribution and Table
4 presents long-term credit recoveries for the last three
years from 2009-2010 to 2011-2012. Graph 3 and Graph
4 show the same. The credit distribution was increased
and target achieved above 90%, and poor recovery of
credit.

50

Table 3. Long-term Agricultural Loan Distribution

Year

Target

Distribution

2012-2013
2013-2014
2014-2015

1500
1424
1215

1379
1355
126

% of
Distribution
92
95
10 (up to
31.12.2014)

1600
1400
1200
1000
Target

800

Distribution
600
400
200
0

2012-2013

2013-2014

2014-2015

51

Graph 3. Long-term Agricultural Loan Distribution

Table 4. Long-term Agricultural Loan Recovery

Year

Demand

Recovery

2012-2013
2013-2014
2014-2015

10943
10235
9764

5784
4870
722

% of
Recovery
53
48
07 (up to
31.12.2014)

52

12000

10943
10235

9764

10000
8000
6000

5784
Demand

4870

Recovery

4000
2000
722
0
2012-2013

2013-2014

2014-2015

Graph 4. Long-term Agricultural Loan Recovery

KISAN Credit Card

In Punjab the KCC was introduced from 1999 in District
Central Co-operative Bank for short-term and mediumterm loans to provide adequate and timely credit support
from the banking system in a flexible and cost-effective
manner. The cash and goods ratio of the scheme is 60:40.
Maximum limit of KCC is rupees five lakhs. 1366514 KCC
issued since the scheme introduced.

53

SCOPE AND LIMITATIONS OF STUDY

LIMITATIONS:

Study is limited to concept of cooperative and

agricultural credit.
The information collected from 50 respondents only.
The study is applicable to other district of Punjab

54

SCOPE:

Agricultural Credit
The Agricultural Credit Policy essentially lays emphasis on
augmenting credit flow at the ground level through credit
planning, adoption of region-specific strategies,
rationalization of lending policies and procedures and
bringing down the cost of borrowing. Bank credit is
available to the farmers in the form of short-term credit
for financing crop production programs and in the form of
medium-term/longterm credit for financing capital
55

investment in agriculture and allied activities like land

development including purchase of land, minor irrigation,
farm mechanization, dairy development, poultry, animal
husbandry, fisheries, plantation, and horticulture. Loans
are also available for storage, processing and marketing
of agricultural produce.

National Bank for Agriculture And Rural

Development (NABARD)
The NABARD provides refinance to the Apex Bank and
CARD Bank. NABARD is an apex institution accredited
with all matters concerning policy, planning and
operations in the field of credit for agriculture and other
economic activities in rural areas. It is an apex
refinancing agency for the institutions providing
investment and production credit for promoting the
various developmental activities in rural areas. It coordinates the rural financing activities of all the
institutions engaged in developmental work at the field
level and maintains liaison with Government of India,
State Governments, Reserve Bank of India and other
national level institutions concerned with policy
formulation.
Primary Agricultural Cooperative Societies (PACS)
PACS are playing a crucial role in improving the economic
and social conditions of the common masses of Punjab
They provide short-term and medium-term loan to the
members/farmers at reasonable interest rates to meet
56

their various needs. They are providing credit to the

farmers for agriculture purposes at cheap and easy
terms. PACS is the foundation of the Cooperative Credit
System on which the super structure of the short- term
cooperative credit system is built.

Agricultural Cooperative Credit Structure

Short-term structure is a three tire structure with PACS in
rural areas, Co-operative Central Banks at the district
level and the Apex Bank at the state level. The short-term
credit structure provides short-term credit for crop
production and medium-term credit for small
developments. Ropar Cooperative Agriculture and Rural
Development Bank (PSCARDB) at the State level and
Primary CARD Bank at the Block level cater to the longterm credit needs in the two tier credit delivery system. In
the short term credit structure, 1333 PACS including 476
LAMPS are functioning. In addition to this, there are 6
District Cooperative Central Banks with 209 branches.
Punjab State Co-operative Apex Bank is functioning as
state level financial institution. In the long term credit
structure CSCARD Bank with 12 District CARD Banks
including 77 branches are function.

Field Survey / Sample Design of The Study

57

The present study is survey based it attempts to explode

the agricultural credit and economic development of rural
sector. For the selection of the sample respondents, the
researcher approached the Apex Bank (State Cooperative
Bank). For the study 10 PACS have been selected from
district Ropar and from each PACS 10 respondents have
been selected by adopting simple random sampling. Thus
100 respondents were selected.

OBSERVATIONS AND DISCUSSIONS

58

From the field survey report the following parameters /

indicators conclude the observation and analysis of
agricultural cooperative credit.
Table 5. Parameters / Indicators of Analysis
Banking
service
Lending
procedure
Lending
schemes
Interest
(long term)
Repayment
s
Awareness

55
(good)
60
(timely)
58
(limited)

70 (high
rate)
64
(repaid)
56
(aware)
Satisfaction 76
(satisfie
d)

36
9 (poor)
(average)
25 (delay) 15 (very
delay)
32
10 (cant
(outdated say)
)
20 (very
10 (cant
high)
say)
26 (will
10 (NPA)
paid)
36
8 (not
(average) aware)
10
14 (cant
(unsatisfie say)
d)

100
100
100

100
100
100
100

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RESULTS / FINDINGS

From the above data it is clear that cooperative banks are

serving in the field of agricultural credit and rural
development. Maximum numbers of respondents are
satisfied with functioning of cooperative bank. The level
of service of cooperative banks is very high. Cooperative
banks are playing extraordinary role for agriculture credit
and rural development. In short we can say that
Cooperative Banks are providing rural Ropar all round
assistance and proved to be an institution where "Growth
with Social Justice" exists. Cooperative Banks plays a
major role in rural credit delivery of Ropar.

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61

SUGGESTIONS

1. The Cooperative Banks should try to increase their

deposits by opening branches in business areas, improve
the services to their clients, introduce different types of
deposit schemes and offer competitive rates of interest.
2. Cooperative Banks should change their loan policies on
the basis of crop loan systems.
3. The Cooperative Banks must maintain adequate liquid
resources, margin, properly scrutiny of loans and should
try to qualitative improvement to the staff.
4. Cooperative Banks should try to co-ordinate between
the Board of Management, Members, Depositors and
Employees of bank.
5. Accountability and transparency need to be brought in
the implantation of the schemes.

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CONCLUSION

Cooperative banks belong to the oldest forms of the

collective action in India playing essential role in the
realization of the agricultural and in local development.
They serve both rural and urban population, and are main
banks in India supporting development of agriculture and
rural areas. Their key role is to give credits financing
various rural based entrepreneurships. Agricultural
credits play a number of significant functions of which the
primary include the intensification and growth of the
agricultural production. In a developing State like
Chhattisgarh with huge deficits in terms of quality and
quantity, the State has to shoulder the primary
responsibility of providing cooperative credit. Considering
the low living standards of common man, incomplete and
imperfect markets, and other socio political
considerations it is the primary duty of the government to
ensure that its citizens have easy access to cooperative
credit.

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64

BIBLIOGRAPHY

1. Departmental Report of Co-operative, Govt. of Punjab

Year 2014-15.
2. Dasgupta R. 2005), Microfinance in India.
3. Gulati A. and Bhatia S. (2000), Institutional Credit to
Indian Agriculture
4. Jadhao S P, Present Scenario of Banking Sector in India,
International Research Journal 2013 June.
5. Misal S M, Cooperatives and Rural Development: Indian
Streams Research Journal 2014 March.
6. Rajivan A. (2008), Microfinance in India, Yojna, January
7. Sharma, Mandira and Kumar, Rajiv (2008), Rural Shortterm cooperative credit structure, Economic and Political
weekly, March 1, pp. 13-18.
8. www.coop.cg.gov.in

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