PAPER PRESENTATION ON
“The Role of Primary Co-operative Agriculture and
Rural Development Bank- Inclusive Growth”
-‘A special study of Sagar Taluk in Shivamogga
District in Karnataka, India.’
Paper Presented by………..
Dr. D.M.Basavaraja,M.com,Ph.D
Dr. B. Ganesh, M.Com, Ph.D.,
Director, National Institute of Post
Graduate Studies,
JNNCE Campus, Shivamogga.
Karnataka State, INDIA.
Director, College Development
Council, Kuvempu University,
Jnana Sahyadri, Shankaraghatta,
Karnataka State, INDIA.
Presentation at Galore---------->
Introduction
Conceptual Analysis of Rural Development
Need for Long Term Finance
Profile of PACARD Bank
Objective of the Study
Research Design
Major Findings
Suggestions
Conclusions
INTRODUCTION
 India is a country of exotic, Scio-economic villages.
 Country of 5,76,000 villages.
 Every four persons out of five are villagers.
 Every five out of six persons depend on agriculture and allied
activities.
 Agriculture contributes only 21% of India’s GDP.
 Agriculture plays an significant role in India’s economic, social
and political sectors.
“Conceptual Analysis of Rural
Development”
Development- Qualitative change & increase in
potential of people for a betterment of living
conditions in future.
A good number of people live a dependency life
due to poverty, social stagnation, inferiority
complex, non- participation in socio-economic,
cultural & Political life.
Need to bring out people out of apathy &
skepticism.
Contd……
Need to motivate them to think freely about
progressive ideas.
Rural Development a strategy designed to
liberate the rural poor people out of age-old
bondage of degraded life.
Need to awaken & activate the rural population,
in the process of achieving & sharing of higher
levels of production.
Contd-
Rural Development- Overall development of
rural areas to improve the quality of life of rural
people.
Development- In agricultural & allied activities,
cottage, small-scale & traditional craft
industries, socio-economic infrastructure,
community services.
Rural development- Product of interaction
between various factors,(socio-economic,
cultural, physical, technological, environmental
etc,).
“NEED FOR LONG TERM FINANCE”
 Long term finance is of paramount importance
for capital investment in agriculture.
 In India, more land should come under
cultivation
for
increasing
agricultural
production.
 Scientific methods of cultivation is to be
adopted to push up the production potential.
 Majority of Indian farmers have little or no
savings for capital intensive investment.
Contd…….
 Introduction of co-operative movement in India,
exclusively to cater the long term credit needs of
famers.
 Land Mortgage Bank came into existence to
minimise difficulties associated with the long
term credits.
 Later, Land Mortgage Bank was renamed as,
Primary Cooperative Agriculture and Rural
Development Bank (PACARD Bank).
Contd-
o Commercial and regional rural banks are disbursing long
term loans better than PACARD Banks.
o Inspite of the quantitative achievement, commercial
banks have failed to reach the majority of rural masses.
o Sivaraman Committee report estimated- Only 6% of the
59 million farmers own 2 hectors or below had availed
credit from commercial banks.
o PACARD Banks with wide network of branches at grass
root level and vast experience in rural credit can help
small farmers and artisans to avail modern technology at
a minimum cost.
“Conceptual Analysis of PACARD Bank”
• World Bank- “Rural development is a strategy
designed to improve the economic & social life of
a specific group of people that is the rural poor.”
• Rural Development Bank classification- At
National level NABARD, at State level, at District
level, and at Taluk level.
• Taluk level Bank is PACARD Bank.
• Land Improvement Act of 1883- loans are
advanced by the state for productive purposes,
which is inadequate.
Significance of ‘PCARD’ Bank
Agriculture Credits Types :Short Term Loans- Repayable period 15 months, for
seasonal agricultural operations.
Medium Term Loans- Repayable period 15 months
to 5 years, for live stock or agricultural machinery or
land improvement or minor irrigation projects.
Long Term Loans- Repayable period 5 to 25 years,
for heavy agricultural machinery, private minor
irrigation projects, plantation, permanent land
improvement, purchase of agricultural land and
redemption of old debts.
New Approach “ Inclusive Growth”:PACARD bank overall development areas:1.
2.
3.
4.
5.
6.
7.
Agriculture
Village Industries
Technical Training to Artisan
Marketing of Agriculture Products
Services like Health and Family Welfare etc
Mechanization Sheep Breeding
Piggery Diary Development
OBJECTIVE OF THE STUDY
o To assess the role of two PCARD Banks in
agricultural financing and rural development.
o To study the problems faced by rural agriculturist
in getting the credit by PACARD Banks.
o To see whether the borrowers utilizing the credit
for the purpose with which they are lent.
o To assess the quantum of long term credit
required by the borrowers and examine
between two PACARD Banks succeeded in
meeting this requirement.
Contd-
o To examine the extent of utilization of credit by
the borrowers and to find out the reasons for
misutilisation, if any.
o To examine the impact of rural development
scheme on rural development.
o To assess the contribution of PCARD banks for
the cause of rural development in the study
area.
o To offer suggestions for improving the role of
PCARD banks in achieving rural development.
“RESEARCH DESIGN”
Area and Scope of the Study –
Evaluating the performance of PCARD Banks of
Sagar Taluk, Shimoga, District, Karnataka, INDIA.
Sources of Data– 20 borrowers (Kasaba & Avinalli)
o Primary Data:- (Questionnaire & Interview)
Agricultural income, procedural aspects of loan
sanctioning, credit utilization and recovery, delay
experienced, opinion of the sample beneficiaries,
overall rating of the bank etc.
Contd-
o Secondary Data:Publications of NABARD & RBI, annual reports of
KASCARD Bank Bangalore, Annual reports,
various registers & ledgers of PCARD Banks of
Sagar and Bheemanakone, various books,
journals and websites/web search.
Sample Design/Size:Study conducted in two PCARD Banks of Sagar
Taluk, Shimoga District, Karnataka State, INDIA.
‘Profile of Sagar Taluk’
 One of the fertile & important maland taluks of
Shimoga district.
 Geographical area:- 1940 sq km.
 Population (2001):- 2,00,995 ( female 1,00,018 ).
 Occupation & Crop:- Agriculture & Arecanut.
 Literacy Rate (2001):- Male 86% & Female 60%.
 Agriculture mainly depends on monsoon.
 The average rainfall is 80 inches.
 There are 27 Credit cooperative societies, 30 Milk
Producing cooperative societies & 37 other societies.
Contd-
There are 18 branches of Commercial Banks, 4
Regional rural banks, 2 Urban cooperative banks,
and 2 PACARD Bank in Sagar Taluk.
Purpose of Study:- Membership size of PACARD
Banks are considered to decide sample size.
Primary Data:- Questionnaires to 1200 members
(15% of total members and 20% of borrowers in
the year 2010),.
Stratified Random Sampling:- 7795 members and
5259 borrowers ( survey of April 2010).
Total Respondents 800:- Include 520 small
farmers, 160 medium farmers and 120 other
farmers.
“Major Findings of the Study”
 Bank Contribution:- Development of agriculture,
infrastructure development in rural areas, rural
industrialization and acquiring fixed assets.
 Relationship:- Bank’s emotional bondage with
farmers and farmers inclination towards
development.
 Borrowings:- 74.2% small farmers, 18.1% medium
farmers and 17.1% large farmers.
 Inadequate Lending:- 31.25% own investment, 5
from commercial banks & 292 partial
development.
Contd-
 Utilization of Loan:- 57.5% borrowers partly and
42.5% borrowers fully utilized the loans.
 Loan Lending Difficulties:- Bank Insufficient funds
and improper records submitted by farmers.
 Purpose of Lending:- Lent loan for Agricultural
Development purposes rather than overall Rural
Development purposes.
 Bank Directors Views:- No lending schemes for overall
development but, for agricultural development.
 Lending Procedure:- Lending of credit based only on
agricultural land. High rate of interest for other
lending's.
“Suggestions for the Bank”
Follow the scientific method of granting loan.
Discourage the borrowers taking loan for
unproductive purpose.
Bank should mobilize their own internal resources
for granting loans.
Bank should be strengthened financially by
mobilizing the deposits from the public.
Understand the psychology & attitude of the
farmers and act accordingly.
Contd-
Pre-lending appraisal and post lending supervision
should be strengthened.
The bank should speedup the procedure in
sanctioning the loan.
Bank should coordinate with other agencies like
PACS for fast disposal of loan applications.
The bank should take up training programme for
improving the efficiency of the entire staff.
“Suggestions for the Policy Makers”
o Bank should gear up to meet the demands of the
farmers and take leadership in rural development.
o Government should pump in sufficient funds to
PACARD banks for overall development of farmers
o Government policy of waiving loans is to be
strictly reviewed in the interest of the rural
development general and farmers in particular.
o PACARD banks to be assigned more responsibility
and government should provide sufficient staff,
infrastructure and necessary funds.
‘CONCLUSION’
• The present study was undertaken with the
objective of studying the role of PACARD banks in
promoting rural development with special
reference to Sagar Taluk.
• Lack of commitment and the government policy
is not encouraging in achieving overall rural
development.
• There is a need for revising, revitalizing and
reviving the organizational and financial frame of
the PACARD bank.