Cooperative credit society
Cooperative credit society are used as
mobilizing rural saving and stimulating
agricultural investment
44% of the institutional credit is accredited to
Cooperative Credit society in India
They are established as Cooperative and
under the Ministry of Cooperation
ROLE OF RBI
The All India Rural Credit Survey Committee
assigned crucial role to the RBI in building
up the cooperative credit organization.
• To draw schemes in collaboration with
Government of India and the State
Government
• To provide fund to the state government
for contribution to the share capital of the
cooperative credit societies.
Two funds were set up under RBI Act
1. The National Agricultural Credit (long
term operation) Fund and
2. National Agricultural credit (stabilizing)
Fund.
RBI was appointed as an active agency to
promote CCS.
RBI developed the credit norms and
rationalized the lending process
Two types of credit societies emerged:
1. Primary Agricultural credit society
2. Cooperative credit banks
a. State Cooperative Agricultural and rural
development bank
b. Primary Cooperative Agricultural and
rural development bank
Organizational structure
Coop Banks
Primary Urban Coop Banks
Rural Cop Banks
Sht. Term. Cr. Str
2 tire str.
3 tire str.
CCB
Long term Cr. Str
Unitary Str.
Federal Str.
PCARDB
PAC
PAC
PCB
Primary Agricultural Credit Societies (PACS)
: They have been to provide grass root
level credit disbursement in rural areas.
They depend on borrowings from higher
organization.
Urban Cooperative Credit (PCBs):
established to increase banking habit with
lower and middle income group people.
They operate through primary cooperative
banks (PCB)
State Cooperative Banks: They are in the
three tire system (top part) and meet short
and medium term credit. There are 28
such organizations in India.
Central Cooperative Banks (CCBs): They
form the middle tire in the tree tire system.
The provide short term credit.
Role of Credit Cooperative Societies:
1. Provide grass root level rural and urban
credit.
2. Develop thrift habit
3. Take part in short term and mid term
credit expansion
4. Assist NBARD in Micro Finance
5. Act as a central point of disbursement for
all rural and urban short and mid term
refinance