All about Rural Credit Institutions

1. RURAL CREDIT INSTITUTIONS
G.V.V.S.V.PRSASAD BABU
LECTURER IN COMMERCE
GOVT.DEGREE COLLEGE
NARSIPATNAM

4. CO-OPERATION MOVEMENT
• Started in 1904 ( started with the formation
of Fenvick weavers’ consumer cooperative in
1769 in Iyreshore Scotland.) The first society
registered, under this law, was in
Kanjipoorum now in Tamil Nadu
• 1915 Mcllagan committee reviewed
movement
• 1919 new act formed and co-operative
department transferred from center to state

6. Co-operative Banks
• PACS (Primary Cooperative Banks)- only
farmers in the same village, Limited liability,
one vote irrespective of shares held.
• RBI declare that number of rural cooperative
institutions has come down from 94718 in
2013-14 to 93913 in 2015-16

7. • DCCBs –roughly 360
• SCBs – every state has one SCB-28
• Criticism- movement not from the people
• All loan needs are not covered
• Small farmers are ignored
• Corruption, red-tapism
• Political pressure to postpone payment by
gov

15. APCOB
• AP STATE CO-OPERATIVE BANK
• 22 DCCBs as subsidiaries, 2748 PACs
• Also funds non-agro activities like self-
employment of SHGs and Youth associations

17. NABARD
• Formed on July2,1982
• Agriculture Refinance Development
corporation(ARDC) was merged
• Capital shared by govt. and RBI 50:50
• Goals: long-term finance for agri funding
institutions even to Govt. also 20years
• Assistence to small cottage industries

18. Continued….
• Financing to all RRBs, land development
Banks, and commercial banks
• Research and Development purposes
• Management : chairman, MD, 13 directors
• RBI Depuety Chairman acts as Chairman
• Perform: 4500crs(2017)(1985-762)
• 18300crs assistance for establishing banking
facilities in rural areas.
• 2200crs for IRDP

20. LEAD BANK SCHEME
• In 1969, came into force with the
recommendations of Godgil study group (In
1967 National Credit Council was established
to study the Credit significance)
• Goals: erradication of unemployment,
poverty, and for providing primary needs
• Area approach (Nariman committee)
identifying a Lead Bank in every District.

21. Contd…
• Lead Bank acts as consorteum leader for Branch
expansion and credit planning
• Gathering info from all banks
• Reviewing the implementation of Govt. progs.
• Preparing Annual Credit plan for the District
• DCC(Dist.Consultative), Dist.Credit Plan, Village
Adoption Scheme, State level Bankers
Commt.(SLBC)
• Failure…………….

22. COMMERCIAL BANKS
• Direct credit to farmers
• Indirect credits PACs, PSS and LAMPS
• Other loans to subsidiary activities
• Marketing needs
• Advances to State sponsered corporations

24. RRBs
• Established by Govt. in 1975 under 20point
programme and recommds of Narsimham cm
• First 5, 2002-196, now-64 only
• Capital 1crore, issue-25Lk, 50% from Centre
• In Tribal areas, where no cooperative and
comm. Banks.
• Low interest on loans and high int. on depos