about agricultural credit

1. BIJU K
ASST.PROF.COMMERCE
GOVT.COLLEGE UDUMA

2. AGRICULTURAL CREDIT
CLASIFICATION OF CREDIT
SHORT TERM MEDIUM TERM LONG TERM
 12 to 15 Months 18 to 60 Months 7 to 20 Years

3. CLASSIFICATION OF SOCIETIES
Credit Co-operatives Non Credit Co-operatives
 Agricultural
 Short Term& Medium Term( Primary ,District &State co-op banks )
 Long Term (Primary Co-op Agricultural & Rural Development Bank&
State Co-op Agricultural & Rural Development Bank)
 Non Agricultural

4. CO-OPERATIVE CREDIT MOVEMENT
Primary agricultural Credit society(1904 Small Size)
Multipurpose Co-op Society(1945)
Large Size Credit Society(1956)
Service Co-operative Society/Bank(1958)
Farmers Service Society(1972)

5. PRIMARY AGRICULTURAL CREDIT SOCIETY(1904)
 Area of operation Village level
 Raiffeisen Model with Unlimited Liability
 Raise Fund& Grant Loans to Members
 Promote Self Help & Thrift
 Membership 18 years old residing with the area of
operation of society
 Short term & Medium Term credit to members for
agricultural operations

6. PRIMARY AGRICULTURAL CREDIT SOCIETY
FUNCTIONS
1. Issue Loans(short & Medium Term)
2. Supply Of Farm Requirements
3. Marketing Of Agricultural Products
4. Supply Of Consumer Goods
5. Banking Business
6. Preparation Of Agricultural Production Plan
7. Developmental Activities
8. Crop Loan System

7. MULTY PURPOSE CO-OPERATIVE SOCIETY
 Finance Crop Production
 Agent For Sale Of Crop
 Supply Seeds, Cattle Feed, Fertiliser & Agricultural
Imlements
 Milk Collection Station & Centre For Animal First Aid
 Centre For Maintaining Agricultural Machines For
Joint Use Of Members
 Encourage Subsidiary Occupation For Its Members

8. LARGE SIZED CREDIT SOCIETY
 Organized Or Reorganized To Cover Group Of
Villages(300 To 500 Persons)
 Larger Membership& Adequate Share Capital
 Head Quarters Situated Conveniently For The People
 Established On Limited Liability
 State Should Participated In The Share Capital
 Chitty Fund Established For Consumption Needs,
Marriage & Funeral Expenses
 Link Between Large Sized & Marketing Societies
 Full Time Qualified Paid Secretaries

9. SERVICE CO-OPERATIVE SOCIETY /BANK
A Service Cooperative Is An Organization Of
Villagers Who Have Willingly Combined For Mutual
Help & Co-operation In Meeting Their Common
Economic Requirement & In Increasing Agricultural
Production.

10. SERVICE CO-OPERATIVE SOCIETY /BANK
Area Of Operation
Maximum Limit Of Population Of 3000 Or 600
Families And Beyond The Distance Of More Than
3 Or 4 Miles From The Head Quarters Village
Liability
Always Limited Excepted Society Already
Registered Unlimited

11. SERVICE CO-OPERATIVE SOCIETY /BANK
Membership & Share Capital
All Agriculturist Including Tenants, Marginal
Farmers & Agricultural Labourers Have Attained Age
Of 18 &Engaged Farming As Well As Artisans Residing
In The Area Of Operation.
State Government Also Become A Member.
Authorized Share Capital Rs 5 To 50 Lakhs.
There Are 3 Types Share A,B,C Classes
A-Rs 10 Allotted To Individual B-Rs 100 Or 1000 Allotted
Govt. C- Rs 5 Allotted Associate Or Nominal Members

12. SERVICE CO-OPERATIVE SOCIETY /BANK
Objects/ Functions
1. Grants Short Term & Medium Term Loans For
Agricultural Purpose & Long Term Loans For Special
Scheme Approved By The NABARD,IDBI,SIDBI,NHB
2. Supply Farm Requirements Such as Seeds, Fertilizer,
Insecticides etc
3. To Maintain & Supply Costly Agricultural
Implements On Hire
4. To Provide Essential Consumer Goods

13. SERVICE CO-OPERATIVE SOCIETY /BANK
 Objects/Functions
5. Raise Funds By Way Of Deposit From Members&
Others
6. To Arrange For The Storage Facility.
7.To Arrange Welfare Programme.
8.Banking business

14. SERVICE CO-OPERATIVE SOCIETY /BANK
Management
 Managing Committee Consists Of 7-15 Members
Elected From The General Body
 2 Seats Reserved One For Women Another For
Member Belonging To SC/ST.
 Managing Committee Elect From Themselves a
President, Vice –President & Other Office Bears.

15. SERVICE CO-OPERATIVE SOCIETY /BANK
Problems
1. Mounting Of Over Dues
2. Lack Of Professional Management
3. Political & Bureaucratic Interference
4. Lack Of Farm Guidance
5. Lack Of Knowledge Of Proper Utilization Of Funds

16. Farmers Service Co-operative Society
To Serve A Compact Area With A Population Of 20000
Where No Other Credit Society Should Function.
Enlarge Its Membership To Cover Entire Population Of
The Area
Big ,Small& Marginal Farmers As Well As Agricultural
Labourers Are Members Of The Society.
Mobilize Savings Of The Peoples
Provide Long Term & Short Term Loans
Provide Loans For Subsidiary Occupations

17. Farmers Service Co-operative Society
Manage Marketing & Processing Of Agricultural
Produces
Should Have A Qualified & Competent Managing
Director
Supply Farm Requisites& Consumer Goods
Have Its Own Technical Personal For Advising On
Farming, Diary& Poultry. Govt. Should Depute Them
On Free Service Basis.
Two Thirds Of The Members Of Managing Committee
Should Necessarily From Weaker Section Of The
Community

18. Co-operative Farming Society
Small Farmers Of A Village Who Either Own Lands Or
Merely Cultivate The Lands As Tenants May Join
Together To Form A Co-operative Farming Society
Availability Of Larger Resources
Introduction Of Machines & Latest Technology
Lower Cost Of Production & Higher Productivity
Elimination Of Middleman
Promotion Of Thrift & Economy Resulting From
Better Social & Moral Values

19. Co-operative Farming Society
Types
Better Joint Tenant Collective
Farming Farming Farming Farming

20. Annual Credit Limit Statement(ACLS)
 On The Basis Of The Scale Of Finance As
Communicated By The DCB, The Secretaries Of The
PACS Shall Arrange To Prepare The Credit
Requirement Of Members (Credit Limit Statement Of
Members) In Consideration Of The Crop, Extent,
Variety Of Seed, Nature Of Land, Individual
Maximum Borrowing Power(IMBP) Etc..

21. Credit Card
Identity Card Issued To The Members By The Service
Co-operative Society Indicating The Credit Limit
Sanctioned To Them.
It Just Like A Pass Book Or Ration Card
It Contains The Information About The Members Such
As Name, Member No, Shares Taken, Area Of Land,
Crop Raised, Credit Limit Sanctioned Date Of
Repayments Etc..
If The Members Takes This Card To The Society He
Can Get Loan On The Spot At The Prescribed Rate.

22. Kisan Credit Card Scheme
 Introduced In 1998-99 To Provide Better Access To Short
Term Institutional Credit To Farmers
 Farmers Eligible For Production Credit Of Rs 5000 Or
More Are Eligible For Issue Of Kisan Credit Card.
 Limit Will Be Fixed On The Basis Of Operational Land
Holding, Crop Pattern & Scale Of Finance.
 Card Will Be Valid For 3 Year
 Each Drawal Has To Be Repaid With In 12 Months
 As Incentive For Good Performance, Credit Limit Can Be
Increased
 Security, Margin, Rate Of Interest Will Be As Per RBI
Guidelines.

23. Lead Bank Scheme
 Introduced In The Wake Of The Nationalization Of
Banks& The Extension Of Banking To The Rural Areas
 The Basic Aim Is That An Individual Bank Should Adopt A
Particular District For Its Intensive Developments
 Lead Bank Act As A Leader To Bring About Co-ordination
Of Co-operative Banks & Other Financial Institutions In
The District For Developments Of The District
 Make Quick Servey In The District To Identify The
Unbanked Areas & To Prepare Programme For Branch
Expansion
 Formulate District Credit Plan

24. Central Co-operative Bank
Its Also Called As District Co-operative Bank
It Is A Financing Bank Of The Primary Co-operative
Societies In The District
Federation Of The Primary Credit Societies & Other
Types Of Primary Societies With In Its
Jurisdiction(one Revenue District)
One Central Co-operative Bank For Every Revenue
District

25. Central Co-operative Bank
 Area Of Operation
One Revenue District
 Membership
Primary Co-operative Credit Society & Other
Types Of Primary Society Working In The Area Of
Its Operation
 Liability
Limited To The Shares

26. Central Co-operative Bank
Objects
 Provide Loans To The Affiliated Primary Co-operative
Credit Society & Other Types Of Primary Societies
 Act As Balancing Centre Of Resources For Primary
Societies
 Supervision & Control Of The Affiliated Societies
 Raise Deposit From Members & Non Member
 Open Branches Of The Important Places
 To Maintain & Utilize Subsidiary State Partnership
Fund

27. Central Co-operative Bank
Share Capital/ Funds
 Authorized Share Capital Varies From Rs 50
Lakhs To Rs One Crore.
 2 Types Of Shares A Class & B Class
 A Class Shares For The Member Societies &
Share Value Rs 100
 B Class Shares Are Reserved For State
Government
 Funds Includes Deposites From Members &
Non Members, Reserve Funds, Loans From
State Co-operative Bank

28. Central Co-operative Bank
Individual Maximum Borrowing Power(IMBP)
 10 Times Of The Paid Up Share Capital Of The Members
Should Not Exceed The Maximum Limit Fixed In The
Byelaw.
Management
 The Ultimate Authority Is General Body
 One Delegate From Each Affiliated Societies
 Board Of Management Consists Of Three Categories Of
Members
 (1)delegates From Member Society At Least
1/Taluk(2)Two Govt. Nominees(3) One Nominee Of the
Kerala State Co-operative Bank
 Board of Directors for a Period of Three Years

29. Central Co-operative Bank
Executive Committee
Consists Of Five Members
President, vice-president, Two Elected Members Of
The Board & One Representative Of The State Co-
operative Bank
The General Manager Is The Chief Executive& He
Responsible For Day-to-day Administration Of The
Bank

30. Central Co-operative Bank
Profit Distribution
25% Of Net Profit To Reserve Fund
5% Subject To Maximum Rs 60000 Of Net Profit To
Co-operative Education Fund
5% Of Net Profit To Professional Education Fund
10% To Co-operative Member Relief Fund Subject
To Maximum Rs 1 Lakh.
7% To Agricultural Credit Stabilization Fund
Balance To Be Distributed As Per Bye-law Provision

31. Central Co-operative Bank
Functions
Loans To Credit Co-operative Societies
 Short Term Agricultural Loan Under Crop Loan System
 Medium Term Loan For Installation Of Pump Sets, Soil
Conservation, Purchase Of Milch Animals etc…
 Short Term & Medium Term Non Agricultural Loan For
Non Agricultural Purposes
 Industrial Loans Under IDBI Scheme
 Fertilizer Loan For Conducting Manure Depots
 Cash Credit For Purchase & Supply Of Ration &
Controlled Goods
 Special Cash Credit For Conducting Festival Markets
 Financial Assistance For Issuing Gold Loans

32. Central Co-operative Bank
Functions
Help To Other Types Of Co-Operatives
 Loans to Handloom Co-Operatives For Purchase &
Marketing Activities
 Loans to Coir Co-Operative For Working Capital
Requirements
 Cash Credit to Consumer Co-Operatives for the
Consumer Business
 Cash Credit to Marketing Co-Operatives for
Marketing & Supply Operations
 Financial Assistance to Dairy Co-Operatives
 Loans & Cash Credit to Industrial Co-Operatives

33. Central Co-operative Bank
Functions
Financial Assistance To Individuals
 Gold Loans
 Hire Purchase Loan For Purchase Household Articles &
Two Wheelers
 Self – Employment Loans to Doctors, Engineers,
Advocates etc..
 Loans For Purchasing New Vehicles likes Auto rickshaw,
Minitrucks, Car etc…
 Housing Loans
 Industrial Loans
 Overdraft Facility On Current Account

34. Central Co-operative Bank
Problems
 Deposit Mobilization
 Complicated Process of Advancing Loans
 Over dues
 Financial Management

35. STATE CO-OPERATIVE BANK
Top Of The Co-operative Credit Structure In The State
It Is An Apex Credit Society
Co-ordinate & Controll The Working Of The Central
Co-operative Bank
It Is An Financing Bank Of Central Co-operative Bank
And Stand For The Over All Development Of The Co-
operative Credit Movement In The State

36. KERALA STATE CO-OPERATIVE BANK
1943 Travancore Central Co-operative Bank
Travancore-cochin State Co-operative Bank
First Nov 1956 The Bank Was Reconstituted As Kerala State Co-
operative Bank Ltd.
Membership& Share Capital
 All DCB & State Govt. Become Members
 Authorized Share Capital Rs25 Crores Made Up On 25 Lakhs
Shares Of Rs100 Each
 Limited Liability
 Funds -Share Capital , Deposit From Members & Non
Members , Reserve Funds & Borrowing From
NABARD,RBI,SBI,IDBI Etc…

37. KERALA STATE CO-OPERATIVE BANK
Objects/Functions
 Promote Economic Interest Of The Members In Accordance
With Co-operative Principles
 To Raise Funds From Members , Non Members & Other
Financial Institutions
 Open Branches In Suitable Place With The Permission Of
Registrar
 Receive Safe Custody , Securities, Ornaments & Valuables
 Arrange Supervision & Inspection Of DCB & Other Co-
operative Institutions
 Issue Agricultural ST , MT , LT Loans To DCB

38. KERALA STATE CO-OPERATIVE BANK
Objects/Functions
 Advance To Subsidiary Activities Of Agriculture Like
Poultry , Diary , Fisheries & Other Activities
 Finance The Production & Marketing Activities Of The
Handlooms , Coir , Fisheries, Diary ,
 Industry & Primary Industrial Co-operatives
 Create The Principal State Partnership Fund With The
Money Received From The State Govt.
 Give Financial Assistance To Co-operative Spinning Mils
& Co-operative Hospitals

39. KERALA STATE CO-OPERATIVE BANK
Management
 General Body Is The Supreme Authority
 General Body Includes Directors Of DCB , Ex-officio
Directors Nominated By The Government
 Board Of Directors- Representatives Of DCB @ Of One
From Each Bank , Four Nominees Of The State
Govt.(Three Officials &One Non Officials),the Registrar
Of Co-operative Society & Managing Director Of The
Bank
 Executive Committee- President , Vice-president ,
Registrar ,Managing Director & Four Directors From
Among The Members Of The Board

40. KERALA STATE CO-OPERATIVE BANK
Disposal Of Net Profit
 25% For The Reserve Fund
 15% For The Agricultural Credit Stabilization Fund
 Dividend Not Exceeding 10% Per Annum
 Co-operative Education Fund As Per Rules
 The Remaining Is Allotted To Investment
Depreciation Fund , Building Fund , Dividend
Equalization Fund , Common Good Fund, Bonus To
Employees

41. National Federation Of State Co-operative Banks (NAFSCOB)
In July 1964 Bank Was Formed With Head Quarters At
Bombay
To Provide Common Forum For Discussing The
Technical & Practical Problems Relating To The Apex
Co-operative Banks & Decide Ways & Means To Solve
Them.
 Important Achievement Is That All India Mutual
Arrangement Scheme(AIMAS)
Maintain Contact With Central& State Govt.
,RBI,NABARD,SBI,NCD& Other National
Organization

42. PRINCIPAL STATE PARTNERSHIP FUND
 The State Co-operative Bank Maintains The Principal State
Partnership Fund With The Money Received From The
State Government.
 Fund Utilized For The Purpose Of Direct Purchasing
Shares In The DCB & Other Co-operative Society With
Limited Liability & Providing Money To The DCB To
Enable Them To Establish The “ Subsidiary State
Partnership Fund”