Group Members Zahid Patel Gurupreet Singh Vishnu Viswanath Sam Vadavana Mani Manoj Kumar Chandresh Patel Vinesh Nair Vinoth Ajeet Pallav Anurag 3364 3313 3408 3413 3411 3342 3363 3348 3407 3390 3359 3317


erabundance f   Rural credit c perati es in India were riginally en isage as a echanis f r p ling the res urces f pe ple with s all eans and pr iding the with access t different financial ser ices. The C perati e e ent in India has c ntributed t de el p ent f the c untry. . the rural  Credit C -Operati e s cieties are f r ed t pr ide financial supp rt t the e bers. C perati e credit structure in India is characterised by a instituti nal seg ents. The s ciety accepts dep sits fr e bers and grants the l ans at reas nable rates f interest in ti es f need.

the Planning C issi n f r ulated the Fi e Year Plans which ade a enti n f the r le f c . 198 by the Act f Parlia ent t nit r RRBs (Regi nal Rural Banks) and c . RBI set up NABARD in July.perati e banks.perati e banks in Indian ec n y.Indian Credit structure is divided into 2 parts CREDIT Agricultural Credit NABARD PACS Non Agricultural Credit SCBs DCCBs  After independence.  .

 The ain bjecti e f c .   H we er. the c .perati e banks was t eradicatethe e ils f neylenders. . 83 % f the rural credit was d inated by the neylenders.perati e with the help f public sect r banks c uld anage t bring d wn the r le f neylenders in rural credit t 16 %. In 1950-51. in 000-01.

History .

perati es. Second Phase (1930-50) perati n´ beca e  In sec nd phase the RBI played the re luti nary r le supp rting the c .perati e credit f ur phases. . The hist ry f c .perati e e ent Act was in 1904 and ³c pr incial subject by 1919. signs f sickness in the Indian rural c perati e e ent were bec ing e ident. f guiding and  H we er. e ent in india can be di idend int First Phase (1900-30)  The c . e en during this phase.

 The 1945 C perati e Planning C ittee had discerned these signs in the e ent. . which resulted in p r g ernance and anage ent and the c nsequent i pair ent f their ittees were theref re set up t suggest financial health. finding that a large nu ber f c perati es were ³saddled with f fr zen assets because f hea y erdues in repay ent. Fourth Phase (1990 and onward)  The F urth Phase fr 1990s nwards saw an increasing realizati n f the disrupti e effects f intrusi e state supp rt and p liticisati n f the c perati es. especially financial c perati es. NABARD was als created during this phase. A nu ber f C ref r s in the sect r.´ the pr ble Third Phase (1950-90)  The All India Rural Credit Sur ey was set up which n t nly rec ended state partnership in ter s f equity but als partnership in ter s f g ernance and anage ent.

Financial health of Credit Co-Operative .

perati e is di ided int aj r parts Financial Health Short Term State Co-operative Baks Long Term State Cooperative Agriculture and Rural Development Banks Primary Cooperative Agriculture and Rural Development Banks District Central Cooperative Banks Primary Agricultural Credit Societies . The Financial health f the credit c .

1) State Cooperative Banks (SCBs): A)  Share Capital: The aggregate paid up share capital f the SCBs increased fr cr re. and the G ern ent f Sikki (96%).05. .Short Term Cooperative Credit Structure  The sh rt-ter c perati e credit structure c nsists f 31 State C perati e Banks (SCBs).735 Pri ary Agriculture Credit S cieties (PACS) as n 31 arch 009. f ll wed by Arunachal Pradesh (77%). with the highest by anipur (91%). The status f the SCBs. DCCBs and PACS is as f ll ws. 365 District Central C perati e Banks (DCCBs) and 1.951 cr re. 13 States ha e a tw -tier structure and tw States ha e a ixed structure. as n 31 arch 003 t Rs.897  The share capital c ntributi n aried fr zer t 96%. Rs. 16 States are ha ing a three-tier structure.

as n 31 arch 004. as n 31 arch 009. acc unted f r 3. Cr re) Types of SCBs Three Tier + Mixed Tier Two Tier Total 2006-07 34013 641 34654 2007-08 37389 715 38104 2008-09 32382 795 33177 % Growth Rate (-) 13.33177 cr re. with dep sits t taling Rs.9%.38104 cr re as n 31 arch 008 t Rs.40 11. C) Credit Outreach:  The aggregate l ans issued by the SCBs decreased fr Rs.1616 cr re. registering a negati e gr wth rate f 1 . Loans Issued by SCBs (Rs.4% er the pre i us year. The credit f SCBs ar egi en in f ll wing table.B) Dep sit:  The dep sits f the SCBs in the c untry aggregated Rs. The SCBs in the N rth Eastern Regi n.43495 cr re. representing an increase f 10.19 (-) 12.7% f dep sits f all SCBs.90 .

4 SCBs rec rded rec ery le el ab e 90% while 1 SCBs registered rec ery le els l wer than the all-India a erage f 84%. as n 30 June 007 but increased t 84%. The rec ery perf r ance f SCBs c ntinued t be p r in the N rtheastern regi n and ranged fr 7% ( anipur SCB) t 45% (Tripura SCB). as n 30 June 008.46 D) Rec ery Perf r ance:  The rec ery f SCBs decreased fr 8 % as n 30 June 006 t 80%. The Haryana SCB rec rded 100% rec ery.44 (-)0. Cr re) Type of SCBs Three Tier+ Mixed Tier Two Tier Total 2006-07 31563 1148 32711 2007-08 33469 1292 34761 2008-09 33202 1400 34602 %Growth Rate (-) 0.8 8. .Loans Outstanding at SCBs ( Rs.

The transacti n c sts reduced fr 008-09. of SCBs 2006-07 10 2007-2008 8 3 6 13 30 2008-09 5 6 6 14 31 E) C sts and  argins: - The a erage returns n funds as a percentage t w rking capital (all India a erage) st d at 8.43% during  .Classification of SCBs according to range of recovery Percentage Recovery Upt 40 41 ± 60 61 ± 75 Ab e 75 Total 7 11 30 No.66%.39% while the a erage c st f funds st d at 5.56% during 007-08 t 1. 1.

F ur SCBs rep rted a l ss a unting t Rs.F) Pr fitability:  The SCBs ha e p sted a net pr fit f Rs. while 7 SCBs rep rted a pr fit during 00809.484. 0.373. 1 cr re. 5 cr re during 008-09 as against Rs.64 cr re in the pre i us year. G) Accu ulated l sses:  The c ns lidated p siti n f the accu ulated l sses f SCBs is indicated in the f ll wing Table: Accumulated losses of SCBs for three years (Rs. Cr re) Year 006-07 007-08 008-09 SCBs 569 343 61 .

2) District Central Cooperative Banks (DCCBs):A) Share Capital:  The aggregate paid-up share capital f the DCCBs increased fr Rs. The dep sits f the DCCBs ranged fr a high ( aharashtra) t a l w f Rs.3878 cr re as n 31 arch 008.  B) Dep sits:  The aggregate dep sits f DCCBs st d at Rs.78739 cr re.4% as n 31 arch 007 t 13.5% er the pre i us year. The state g ern ent c ntributi n t the share capital f DCCBs has c e d wn arginally fr 14.3656 cr re as n 31 arch 007 t Rs.435 cr re (Jharkhand). as n 31 009. 3888 cr re . representing an increase f 6.8% as n 31 arch 008. rec rding an increase f 6%. arch  f Rs.

7% er the pre i us year.59544 cr re as n 31 arch 008 t Rs. the t tal l an utstanding f the DCCBs was Rs. The details f l ans issued and utstanding f DCCBs are gi en in the f ll wing Table: Loans Issued and outstanding by DCCBs DCCBs Loans Issued Loans outstanding 2006-07 56069 59 83 2007-08 59544 64 1 Rs. . registering a gr wth rate f 3. Cr re  2008-09 58964 66599  As n 31 arch 009.58964 cr re as n 31 arch 009.66599 cr re.C) Credit Outreach:  The aggregate l ans issued by DCCBs decreased arginally fr Rs.

63 DCCBs reported a profit aggregating to Rs. argins:- E) Costs &  The average return on funds as a percentage to working capital (all India average) stood at 9. .30%.54% for DCCBs as a group while the average cost of funds stood at 6. F) Profitability:  During 008-09.859 crore while 10 DCCBs suffered a loss aggregating to Rs. As against this 43 DCCBs recorded a profit and 1 DCCBs suffered a loss during 007-08.758 crore.Recovery Perfor ance:  The aggregate loan recovery of the DCCBs declined from 66% as on 30 June 007 to 61% as on 30 June 008 and marginally increased to 6 % during 008-09.

3) Primary Agricultural Credit Societies (PACS): A)  embership:The total membership of PACS. of which the borrowing members stood at 5. As regards the geographical spread of PACS.13 crore and constituted around 38%. as on 31 arch 004. stood at 13.4474. as on 31 arch 004.G) Accumulated Losses:  The accumulated losses of the DCCBs.497 .54 crore members. stood at Rs.85 crore as against Rs.66 crore. the western states of aharashtra and Gujarat accounted for 8% of the total PACS in the country. with aharashtra alone accounting for about 1% of the total PACS in the country. as on 31 arch 003.  .

30950 ( 9. which in turn affects their credit and non-credit business adversely. 83349 PACS earned profit amounting to Rs. The percentage of recovery to demand was 6 %.  C) Viability of PACS:  Out of the 105735 PACS reported to be in existence as on 31 arch 009. 65057 (6 %) were workable. The total deposits mobilized by PACS in the country stood at Rs.186 crore. as on 31 arch 009 and declined by 5% over the previous year. In the case of weak DCCBs.1%) were useless. the affiliated PACS are starved of resources.4%) were inactive and 194 ( .18143 crore. 4683 (4. . most of the PACS are totally dependent on the finance provided by DCCBs.B) Deposits:  At present.404 crore and 536 6 PACS incurred a loss amounting to Rs.3%) were potentially workable. It was reported that during the year 007-08.

i. 1 were having a federal/ mixed structure with affiliated PCARDBs.Long-term Cooperative Credit Structure  As at the end of 008-09. . Jammu and ashmir and Pondicherry. with the highest increase of 16% in Chhattisgarh.03. the long term co-operative credit structure consisted of 0 State Cooperative Agriculture and Rural Development Banks (SCARDBs) with 768 Primary Cooperative Agriculture and Rural Development Banks (PCARDBs). As on 31 arch 009. 009. 008 to Rs.e. Gujarat. and Uttar Pradesh (10%). followed by adhya Pradesh (14%).73 crore as on 31. Of the 0 SCARDBs. 76 crore as on 31. an increase of 4%. Haryana. the SCARDBs had 863 branches while the PCARDBs had 1008. eight were having a unitary structure with branches. There was negative growth in Bihar.03. State Cooperative Agriculture and Rural Development Banks: - 1) A) Share Capital:  The total share capital of SCARDBs increased from Rs.

Share Capital Contribution of State Government to SCARDBs as on 31.58 405.03. About 80% of the total resources of the SCARDBs were in the formof borrowings. 34. The SCARDBs achieved a 1% increase in deposits during 008-09 as compared to a negative growth rate of 6% during 007-08. % over 007-08. as on 31 arch 009. was % of the Owned Funds. . The deposits of the SCARDBs stood at Rs.40 88.2009 Type of SCARDBs Unitary Structure Federal/ Mixed Structure Total Total Share capital 356.41 761.69 B) Resource Base:  The LT cooperative structure continued to depend on external financial agencies for augmenting its resources.604 crore as on 31 arch 009.99 Contribution of State Govt. registering an increase of 6.16881 crore. The outstanding borrowings of SCARDBs as on 31 arch 009 were Rs.29 54. The paid-up capital of the SCARDBs.

argin: - E) Costs &  The average return on funds (all-India average) stood at 8.C) Credit Outreach:  The loans outstanding as on 31 arch 009 stood at Rs. .31 per cent. F) Profitability:  During 008-09.16 1 registering a growth rate of 6% over the previous year.99% during 008-09. crore.6 per cent for SCARDBs and average cost of funds at 6. 10 SCARDBs reported a profit while 9 SCARDBs were in loss. The transaction cost as a percentage to working fund stood at 1. There was overall reduction in the recovery rate in many SCARDBs.75 per cent. The net margin earned by the SCARDBs continued to be negative at 0. D) Recovery Performance:  The aggregate recovery of the SCARDBs declined from 49% in 007-08 to 44% during 008-09.

The average state government contribution to the share capital of PCARDBs formed 15% and growth rate was 9% as on 31 arch 004. Himachal Pradesh.891 crore as on 31. The outstanding borrowings of PCARDBs as on 31 arch 009 were Rs. The paid-up capital of PCARDBs as on 31 arch 009 was 31% of the owned funds. There was a negative growth in PCARDBs in Haryana.03. 008 to Rs.2) Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) A)  Share Capital: The total share capital of PCARDBs increased from Rs. 009. About 79% of the total resources of the PCARDBs were in the form of borrowings. registering a growth rate of 3%. The deposits of the PCARDBs were Rs.916 crore as on 31. and Tamil Nadu.03. . registering an increase of 5. 5 crore with a growth rate of 18% during 00809 as compared to a negative growth rate of 16% during 007-08.11880 crore. B) Resource Base:  The LT cooperative credit structure continued to depend on external financial agencies for augmenting its resources.9% over 007. The highest growth rate of 31% was in adhya Pradesh followed by West Bengal (10%).08.

West Bengal (65%). registering a growth rate of 4% over the previous year. 40 PCARDBs had a recovery level less than 40%. .85 per cent for PCARDBs and average cost of funds at 7. as on 31 arch 009.489 crore as compared to the position as on 30 June 008. The transaction cost as a percentage to working fund stood at . as on 30 June 009. argin: - E) Costs &  The average return on funds (all-India average) stood at 9. Himachal Pradesh ( 7%) and Haryana (5%). Punjab (54%).11 09 crore. D) Recovery Performance:  The loan recovery performance of PCARDBs remained constant at 44% as in the previous year.C) Credit Outreach:  The loans outstanding.96 per cent. The over-dues increased by Rs.0 per cent. The loans issued increased by % in four states. namely. stood at Rs.

F) Profitability:  During 008-09. 81 PCARDBs earned profits while 430 PCARDBs (excluding 4 PCARDBs in erala and 53 PCARDBs in Orissa) incurred losses during 008-09 as compared to 208 that earned profit and 560 PCARDBs that incurred losses during 2007-08. .

Agricultural Credit .

   .488and average advance per PACS is Rs 58. The Short Term credit structure provides Short Term credit for crop production and medium term credit for small developments through Primary Agricultural Co-operatives affiliated to 21 DCC Banks. The Central Bank secure refinance facilities from NABARD through arnataka state Cooperative Apex Bank. Co-operative Central Banks at the district level and the Apex Bank at the state level. The average lending per farmer is Rs 22. Credit is an essential ligament for the progress of economic development. The Co-operative Credit system is the oldest sector of the co-operation movement and consists of short term credit. medium term credit and long term credit structure. State is mainly dependent on agriculture as more than 65% of the total population is engaged in this sector.00 lacks. Short Term structure is a three tree structure with Agricultural Credit societies in rural areas.

As on 31/03/2008 an amount of Rs 33. a Guarantee fee of 0. 80.Under this scheme Government has released Rs.5% differential interest to Co-op. 60.  Agricultural loans to farmers at 4% : Government has implemented with effect from 01-04-2006 the scheme of providing Short Term.41 crores has been realesed by the Govt.e. the Apex Bank. edium Term and Long Term loans to farmers and Government will reimburse 7.f. Societies.05% has to be contributed by the State Government.10% by the Central Government.42 lakhs has been contributed by the state Govt under the scheme. the DCC Bank and the PACs and 0. Under this scheme an amount of Rs 153.00 crores and Rs.  Deposit Guarantee Scheme for PACs: Deposit guarantee scheme has been introduced and accordingly.00 crores during the years 2004-05 and 2005-06 respectively. . The Government reimbursed an average of 5. 01-04-2004 the scheme of providing Agricultural loans at the rate of 6%.5% interest subsidy on the loans issued to farmers through Credit Co-operative Societies. Agricultural loans to farmers at 6%: The State Government has implemented w.

59 2007-08 1439516 4475.00 2004-05 1136158 2902. 14.39.00 2005-06 1290587 3351.80 Credit Limit Sanctioned ( Rs.516 lakhs isan Credit Cards have been issued to eligible farmers. Parameters Cards Issued Credit limit sanctioned 2003-04 1109284 2418. KISAN CREDIT CARDS: This scheme has been implemented to provide timely financial assistance to farming community.14.910 lakhs eligible farmers are covered under personal Accident Insurance Scheme. A sum of Rs. In Crores) Number Of Cards Issued . 10.4475.80 crores credit limit has been sanctioned till the end of arch 2008.56 2006-07 1351556 4114.

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