credit co-operative societies

8/7/2019 Credit Co-operative Societies

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Group Members

Zahid Patel 3364

Gurupreet Singh 3313

Vishnu Viswanath 3408

Sam Vadavana 3413

Mani 3411Manoj Kumar 3342

Chandresh Patel 3363

Vinesh Nair 3348

Vinoth 3407

Ajeet 3390

Pallav 3359

Anurag 3317


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Int roduc ti on


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In d ian Cred it st ruc t ure is d ivi ded int o 2 p a r t s

After independence, the Planning C issi n f r ulated the Fi eYear Plans which ade a enti n f the r le f c - perati e banks inIndian ec n y.

RBI set up NABARD in July, 198 by the Act f Parlia ent tnit r RRBs (Regi nal Rural Banks) and c - perati e banks.

CREDIT

Ag r icul t ur a l Cred it

NABARDPA CS

N on Ag r icul t ur a l Cred it

SC BsDCC Bs


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T he ain bjecti e f c - perati e banks was t eradicatethe e ils f neylenders.

In 1950-51, 83 % f the rural credit was d inated by the neylenders.

H we er, in 000-01, the c - perati e with the help f public sect r banksc uld anage t bring d wn the r le f neylenders in rural credit t 16

%.


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H ist ory


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T he hist ry f c - perati e credit e ent in india can be di idend intf ur phases.

F irs t Ph a se (1900-30)

T he c - perati e e ent Act was in 1904 and c perati n beca e pr incial subject by 1919.

Seco n d Ph a se (1930-50)

In sec nd phase the RBI played the re luti nary r le f guiding andsupp rting the c - perati es.

H we er, e en during this phase, signs f sickness in the Indian ruralc perati e e ent were bec ing e ident.


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F inan cia lhea lt h of Cred it

Co-Oper ativ e


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T he Financial health f the credit c - perati e is di ided int aj r parts

F inan cia l H ea lt h

Shor t T erm Lo n g T erm

Stat e Co-oper ativ eBak s

S tat e Cooper ativ eAg r icul t ure an d R ur a l

Dev elopme nt Bank s

P r im a ry Ag r icul t ur a lCred it Soc ieti es

D ist r ict Ce nt r a lCooper ativ e Bank s

P r im a ry Cooper ativ eAg r icul t ure an d R ur a l

Dev elopme nt Bank s


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Shor t T erm Cooper ativ e Cred it St ruc t ureT he sh rt-ter c perati e credit structure c nsists f 31 State C perati e

Banks (SCBs), 365 District Central C perati e Banks (DCCBs) and1,05,735 Pri ary Agriculture Credit S cieties (PACS) as n 31 arch 009.16 States are ha ing a three-tier structure, 13 States ha e a tw -tier structureand tw States ha e a ixed structure. T he status f the SCBs, DCCBs andPACS is as f ll ws.

1) Stat e Cooper ativ e Bank s (SC Bs): -

A) Share Capital: -

T he aggregate paid up share capital f the SCBs increased fr Rs.897

cr re, as n 31 arch 003 t Rs.951 cr re.

T he share capital c ntributi n aried fr zer t 96%, with the highest bythe G ern ent f Sikki (96%), f ll wed by anipur (91%), andArunachal Pradesh (77%).


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B) Dep sit: -

T he dep sits f the SCBs in the c untry aggregated Rs.43495 cr re, as n 31arch 004, representing an increase f 10.4% er the pre i us year. T he

SCBs in the N rth Eastern Regi n, with dep sits t taling Rs.1616 cr re,acc unted f r 3.7% f dep sits f all SCBs.

C) Credit Outreach: -

The aggregate l ans issued by the SCBs decreased fr Rs.38104 cr re asn 31 arch 008 t Rs.33177 cr re, as n 31 arch 009, registering a

negati e gr wth rate f 1 .9%. T he credit f SCBs ar egi en in f ll wingtable.

Lo an s I ssued by SC Bs (Rs. Cr re ) Types of SCBs 2006-07 2007-08 2008-09 % Growth Rate

Three Tier +Mixed Tier 34013 37389 32382 (-) 13.40

Two Tier 641 715 795 11.19

Total 34654 38104 33177 (-) 12.90


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Lo an s Ou t stan d in g at SC Bs ( Rs. Cr re )

D) Rec ery Perf r ance: -

T he rec ery f SCBs decreased fr 8 % as n 30 June 006 t 80%, asn 30 June 007 but increased t 84%, as n 30 June 008. T he Haryana

SCB rec rded 100% rec ery, 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%. T he rec ery perf r ance f SCBs c ntinued t be p r in the N rth-eastern regi n and ranged fr 7% ( anipur SCB) t 45% ( T ripura SCB).

T ype of SC Bs 2006-07 2007-08 2008-09 %Gro wt h R at e

Three Tier+Mixed Tier 31563 33469 33202 (-) 0.8

Two Tier 1148 1292 1400 8.44

Total 32711 34761 34602 (-)0.46


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Cl a ss if icati on of SC Bs a ccord in g t o r an ge of reco v ery

E) C sts and argins: -

T he a erage returns n funds as a percentage t w rking capital (all India

a erage) st d at 8.39% while the a erage c st f funds st d at 5.66%.T he transacti n c sts reduced fr 1.56% during 007-08 t 1.43% during

008-09.

Perce nta geR eco v ery

N o. of SC Bs

2006-07 2007-2008 2008-09

U pt 40 10 8 541 60 3 6

61 75 7 6 6

Ab e 75 11 13 14T o ta l 30 30 31


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F) Pr fitability: -

T he SCBs ha e p sted a net pr fit f Rs.373. 5 cr re during 008-09 asagainst Rs.484.64 cr re in the pre i us year. F ur SCBs rep rted a l ssa unting t Rs. 0. 1 cr re, while 7 SCBs rep rted a pr fit during 008-09.

G) Accu ulated l sses: -

The c ns lidated p siti n f the accu ulated l sses f SCBs is indicated inthe f ll wing T able:

Accumul at ed losses of SC Bs for t hree ye a rs ( Rs. Cr re )

Ye a r SC Bs

006-07 569

007-08 343

008-09 61


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T he aggregate l ans issued by DCCBs decreased arginally fr Rs.59544cr re as n 31 arch 008 t Rs.58964 cr re as n 31 arch 009.

T he details f l ans issued and utstanding f DCCBs are gi en in thef ll wing T able:

Lo an s I ssued an d ou t stan d in g by DCC Bs Rs. Cr re

As n 31 arch 009, the t tal l an utstanding f the DCCBs wasRs.66599 cr re, registering a gr wth rate f 3.7% er the pre i us year .

DCC Bs 2006-07 2007-08 2008-09

Lo ans Issued 56069 59544 58964Lo ans o utstanding 59 83 64 1 66599


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Rec ov ery Perf o r ance: -

T he aggregate l o an rec ov ery o f the DCCBs declined fr om 66% as o n 30June 007 t o 61% as o n 30 June 008 and m arginally increased t o 6 %during 008-09.

E) C o sts & argins:-

T he a v erage return o n funds as a percentage t o wo rking capital (all India

av

erage) stoo

d at 9.54% f o

r DCCBs as a gr o

up while the av

erage co

sto

f funds st oo d at 6.30%.

F) Pr o fitability: -

During 008-09, 63 DCCBs rep o rted a pr o fit aggregating t o Rs.859 cr o rewhile 10 DCCBs suffered a l o ss aggregating t o Rs.758 cr o re. As againstthis 43 DCCBs rec o rded a pr o fit and 1 DCCBs suffered a l o ss during

007-08.


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G) Accu m ulated Lo sses: -

T he accu m ulated l o sses o f the DCCBs, as o n 31 arch 004, st oo d atRs.497 .85 cr o re as against Rs.4474.66 cr o re, as o n 31 arch 003.

3) P r im a ry Ag r icul t ur a l Cred it Soc ieti es ( PA CS): -

A) em bership:-

T he t o tal m em bership o f PACS, as o n 31 arch 004, st oo d at 13.54 cr o rem em bers, o f which the b o rr o wing m em bers stoo d at 5.13 cr o re andco nstituted ar o und 38%.

As regards the ge o graphical spread o f PACS, the western states o f aharashtra and Gujarat acc o unted f o r 8% o f the t o tal PACS in the

co untry, with aharashtra al o ne acc o unting f o r ab o ut 1% o f the t o tal PACSin the c o untry.


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B) Dep o sits: -

At present, mo st o f the PACS are t o tally dependent o n the finance pr ov ided by DCCBs. In the case o f weak DCCBs, the affiliated PACS are star v ed o f reso urces, which in turn affects their credit and n o n-credit businessadv ersely.

T he t o tal dep o sits mo bilized by PACS in the c o untry st oo d at Rs.18143cr o re, as o n 31 arch 009 and declined by 5% ov er the pre v io us year.

C) Viability o f PACS: -

Out o f the 105735 PACS rep o rted t o be in existence as o n 31 arch 009,65057 (6 %) were w o rkable, 30950 ( 9.3%) were p o tentially w o rkable,4683 (4.4%) were inacti v e and 194 ( .1%) were useless. It was rep o rtedthat during the year 007-08, 83349 PACS earned pr o fit a mo unting t oRs.404 cr o re and 536 6 PACS incurred a l o ss a mo unting t o Rs.186 cr o re.T he percentage o f rec ov ery t o dem and was 6 %.


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Lo n g-t erm Cooper ativ e Cred it St ruc t ureAs at the end o f 008-09, the l o ng ter m co -o perati v e credit structure

co nsisted o f 0 State C oo perati v e Agriculture and Rural De v elo pm ent Banks(SCARDBs) with 768 Pri m ary C oo perati v e Agriculture and RuralDev elo pm ent Banks (PCARDBs). Of the 0 SCARDBs, eight were ha v ing aunitary structure with branches, 1 were ha v ing a federal/ m ixed structurewith affiliated PCARDBs. As o n 31 arch 009, the SCARDBs had 863

branches while the PCARDBs had 1008.1) Stat e Cooper ativ e Ag r icul t ure an d R ur a l Dev elopme nt Bank s: -

A) Share Capital: -

T he t o tal share capital o f SCARDBs increased fr om Rs.73 cr o re as o n31.03. 008 t o Rs. 76 cr o re as o n 31.03. 009, i.e. an increase o f 4%, withthe highest increase o f 16% in Chhattisgarh, f o llo wed by adhya Pradesh(14%), and U ttar Pradesh (10%). T here was negati v e gr o wth in Bihar,Haryana, Gujarat, Ja mm u and ash m ir and P o ndicherry.


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Sh a re C a p ita l Co nt r ibu ti on of S tat e Go v er n me nt t o SC ARDB s a s o n 31.03.2009

B) Res o urce Base: -

T he LT coo perati v e structure c o ntinued t o depend o n external financialagencies f o r aug m enting its res o urces. Ab o ut 80% o f the t o tal res o urces o f the SCARDBs were in the f o r mo f bo rr o wings. T he o utstanding b o rr o wings

o f SCARDBs as o n 31 arch 009 were Rs.16881 cr o re, registering anincrease o f 6. % ov er 007-08. T he paid-up capital o f the SCARDBs, as o n31 arch 009, was % o f the Owned Funds. T he dep o sits o f theSCARDBs st oo d at Rs.604 cr o re as o n 31 arch 009. T he SCARDBsachie v ed a 1% increase in dep o sits during 008-09 as c om pared t o anegati v e gr o wth rate o f 6% during 007-08.

Type of SCARDBs TotalShare capitalContribution of

State Govt.

Unitary Structure 356.58 34.29

Federal/ Mixed Structure 405.41 54.40

Total 761.99 88.69


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T he l o ans o utstanding as o n 31 arch 009 st oo d at Rs.16 1 cr o re,registering a gr o wth rate o f 6% ov er the pre v io us year.

D) Rec ov ery Perf o r m ance: -

T he aggregate rec ov ery o f the SCARDBs declined fr om 49% in 007-08 t o44% during 008-09. T here was ov erall reducti o n in the rec ov ery rate inm any SCARDBs.

E) C o sts & argin: -

T he a v erage return o n funds (all-India a v erage) st oo d at 8.6 per cent f o r SCARDBs and a v erage c o st o f funds at 6.31 per cent. T he transacti o n c o stas a percentage t o wo rking fund st oo d at 1.75 per cent. T he net m argin

earned by the SCARDBs c o ntinued t o be negati v e at 0.99% during 008-09.


During 008-09, 10 SCARDBs rep o rted a pr o fit while 9 SCARDBs were inlo ss.


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2) Pr im a ry Cooper ativ e Ag r icul t ure an d R ur a l Dev elopme nt Bank s(P C ARDB s)

A) Share Capital: -

T he t o tal share capital o f PCARDBs increased fr om Rs.891 cr o re as o n31.03. 008 t o Rs.916 cr o re as o n 31.03. 009, registering a gr o wth rate o f 3%. T he highest gr o wth rate o f 31% was in adhya Pradesh f o llo wed byWest Bengal (10%). T here was a negati v e gr o wth in PCARDBs in Haryana,Him achal Pradesh, and T am il Nadu. T he a v erage state g ov ern m ent

co ntributi o n to the share capital o f PCARDBs f o r m ed 15% and gr o wth ratewas 9% as o n 31 arch 004.

B) Res o urce Base: -

T he LT coo perati v e credit structure c o ntinued t o depend o n externalfinancial agencies f o r aug m enting its res o urces. Ab o ut 79% o f the t o talreso urces o f the PCARDBs were in the f o r m o f bo rr o wings. T he o utstanding

bo rr o wings o f PCARDBs as o n 31 arch 009 were Rs.11880 cr o re,registering an increase o f 5.9% ov er 007- 08. T he paid-up capital o f PCARDBs as o n 31 arch 009 was 31% o f the o wned funds. T he dep o sitso f the PCARDBs were Rs. 5 cr o re with a gr o wth rate o f 18% during 008-09 as c om pared t o a negati v e gr o wth rate o f 16% during 007-08.


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T he l o ans o utstanding, as o n 31 arch 009, st oo d at Rs.11 09 cr o re,registering a gr o wth rate o f 4% ov er the pre v io us year. T he l o ans issued

increased by % in f o ur states, na m ely, West Bengal (65%), Punjab (54%),Him achal Pradesh ( 7%) and Haryana (5%).

D) Rec ov ery Perf o r m ance: -

The l

oan rec

overy perf

or m

anceo

f PCARDBs rem

ained co

nstant at 44% asin the pre v io us year. 40 PCARDBs had a rec ov ery le v el less than 40%, aso n 30 June 009. T he ov er-dues increased by Rs.489 cr o re as c om pared t othe p o siti o n as o n 30 June 008.

E) C o sts & argin: -

T he a v erage return o n funds (all-India a v erage) st oo d at 9.85 per cent f o r PCARDBs and a v erage c o st o f funds at 7.96 per cent. T he transacti o n c o stas a percentage t o wo rking fund st oo d at .0 per cent.


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During 008-09, 81 PCARDBs earned pr o fits while 430 PCARDBs(excluding 4 PCARDBs in erala and 53 PCARDBs in Orissa) incurred

lo sses during 008-09 as c om pared t o 2 08 that earned pr o fit and 560PCARDBs that incurred l o sses during 2 007-08.


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Ag r icul t ur a lCred it


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State is m ainly dependent o n agriculture as mo re than 65% o f the t o tal po pulati o n is engaged in this sect o r. Credit is an essential liga m ent f o r the pr o gress o f ec o nom ic de v elo pm ent.

T he C o -o perati v e Credit syste m is the o ldest sect o r o f the c o -o perati o nmov em ent and c o nsists o f sh o rt ter m credit, m ediu m ter m credit and l o ngter m credit structure.

T he Sh o rt T er m credit structure pr ov ides Sh o rt T er m credit f o r cr o p

pr o ducti o n and m ediu m ter m credit f o r s m all de v elo pm ents thr o ugh Pri m aryAgricultural C o -o perati v es affiliated t o 2 1 DCC Banks. T he Central Bank secure refinance facilities fr om NABARD thr o ugh arnataka state C o -o perati v e Apex Bank. T he a v erage lending per far m er is Rs 22 ,488andav erage ad v ance per PACS is Rs 58.00 lacks.

Sho rt T er m structure is a three tree structure with Agricultural Creditso cieties in rural areas, C o -o perati v e Central Banks at the district le v el andthe Apex Bank at the state le v el.


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Ag r icul t ur a l lo an s t o f a rmers at 6%:

T he State G ov ern m ent has i m ple m ented w.e.f. 01-04- 2 004 the sche m e o f pr ov iding Agricultural l o ans at the rate o f 6%. T he G ov ern m ent rei m bursed

an av

erageo

f 5.5% differential interest to

Co

-o p. S

ocieties.

Under thissche m e G ov ern m ent has released Rs. 60.00 cr o res and Rs. 80.00 cr o res

during the years 2 004-05 and 2 005-06 respecti v ely.

Ag r icul t ur a l lo an s t o f a rmers at 4 % :

Gov ern m ent has i m ple m ented with effect fr om 01-04- 2 006 the sche m e o f pr ov iding Sh o rt T er m , ediu m T er m and Lo ng T er m lo ans t o far m ers andGov ern m ent will rei m burse 7.5% interest subsidy o n the l o ans issued t ofar m ers thr o ugh Credit C o -o perati v e S o cieties. U nder this sche m e anamo unt o f Rs 153.41 cr o res has been realesed by the G ov t.

Depos it Gu a r ant ee Sc heme for PA Cs:

Dep o sit guarantee sche m e has been intr o duced and acc o rdingly, a Guaranteefee o f 0.05% has t o be c o ntributed by the State G ov ern m ent, the Apex Bank,the DCC Bank and the PACs and 0.10% by the Central G ov ern m ent. As o n31/03/ 2 008 an a mo unt o f Rs 33.4 2 lakhs has been c o ntributed by the stateGov t under the sche m e.


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K I SAN C RED I T C ARD S:

T his sche m e has been i m ple m ented t o pr ov ide ti m ely financial assistance t ofar m ing c omm unity. 14,39,516 lakhs isan Credit Cards ha v e been issued t o

eligible far m ers. A su m o f Rs.4475.80 cr o res credit li m it has been sancti o nedtill the end o f arch 2 008. 10,14,910 lakhs eligible far m ers are c ov eredunder pers o nal Accident Insurance Sche m e.

Cred it L im it San cti on ed ( R s. In Crores) N umber Of C a rds I ssued

Para m eters 2 003-04 2 004-05 2 005-06 2 006-07 2 007-08

Cards Issued 1109 2 84 1136158 1 2 90587 1351556 1439516

Credit li m itsancti o ned

2 418.00 2 90 2 .00 3351.56 4114.59 4475.80

credit co-operative societies

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