Primary Agriculture Credit Societies (PACS)
1) PACS are outside the purview of the Banking Regulation Act, 1949 and hence not regulated by RBI. PACS are regulated by State Government and the Registrar of Co-operative Societies appointed by the State.
2) A PACS is organized at the grass roots level of a village or a group of small villages. It is this basic unit which deals directly with the rural (agricultural) borrowers, gives them loans and collects repayments of loans given.
3) PACS is the first building block of the century-old cooperative banking system of India. Each PACS was designed to be a village-level credit society into which the farmers brought in share capital, deposits and provided loans to each other. Elected members, one- member-one-vote, transparency, ground-level reach, ease of operations, speed, human connect—almost everything about the structure of a PACS makes for robust ‘public policy for credit’.
4) Recently, NABARD has decided to develop 35,000 PACS into Multi Service Centres (MSCs) in mission-mode. The initiative will enable PACS to support farmers in post-harvest marketing activities and provide ancillary services to its members like creation of storage and processing facilities, custom hiring centers and collective purchase of inputs. This will also help in increasing non-fund based income of the PACS. On the sidelines, a PACS can also play a major role by integrating its warehouse with physical and financial supply chain of agro-commodities in the upcoming Gramin Agriculture Markets (GrAMs) or large warehouses in private sector.
Cabinet approves Computerization of Primary Agriculture Credit Societies (PACS) –
1) As PACS were not computerized till now, there is no uniformity in the software being used by them and they are not interconnected with the DCCBs and StCBs.
2) It will bring efficiency in PACS, transparency and accountability in their operations
3) It will facilitate PACS to diversify their business and undertake multiple activities/ services.
4) PACS account for 41% of the Kisan Credit Card (KCC) loans given by all entities in the Country and 95 % of these KCC loans are to the Small and Marginal farmers.
5) Computerization of PACS, besides serving the purpose of financial inclusion and strengthening service delivery to farmers especially Small & Marginal Farmers (SMFs) will also will become nodal service delivery point for various services such as DBT, Interest Subvention Scheme (ISS), Crop Insurance and provision of inputs like fertilizers, seeds etc.
6) Computerization will help in improving the outreach of the PACS as outlets for banking activities as well as non-Banking activities apart from improving digitalisation in rural areas.
