Page 30 - The Insurance Times July 2025

Insurance Distribution

PACS - An

emerging Insurance

Distribution Channel

Paresh Nath Karmakar
Retired DGM(IS)
United India Insurance Co. Ltd.

The Government of India has taken several initiatives in approving the Plan for strengthening Primary
Agricultural Cooperative Societies (PACS) and deepening its reach up to the grassroots. It aims at
bringing greater transparency and accountability into their operations and enabling them to diversify
their business and undertake more activities.

P rimary Agricultural Credit Societies (PACS) are the form the foundation of the hierarchical structure. They are

grass root level arms of the short-term co-opera-
mostly in rural areas and directly serve the local population
tive credit structure. PACS deals directly with the
by providing services such as loans and opening deposit ac-
rural (agricultural) borrowers, disburses loans and
collects repayments of loans and undertakes distribution and counts.
marketing functions. It operates at the base level, serving PACS are registered under the Cooperative Societies Act and
as the lowest tier in the three-tier cooperative credit struc- are regulated by state governments.
ture. The other two tiers are District Central Cooperative
Banks (DCCBs) and State Cooperative Banks (SCBs). In In- The following is the Organizational Structure of PACS:
dia, the first PACS was established in 1904, following the General Body of PACS: Exercise the control over Board
enactment of the Cooperative Credit Societies Act. as well as Management.
Management Committee: Elected by the general body
Three different types of cooperative banks function in India to perform the work as prescribed by society's rules,
- Tier 1, Tier 2 and Tier 3. The functionality of each type of acts, and bye-laws.
cooperative bank is given below:
Chairman, Vice-Chairman, and Secretary: Work for the
Tier-1: State Cooperative Banks - They serve as the high-
benefit of the members by performing their roles and
est governing bodies for all cooperative banks within a spe-
duties as assigned to them.
cific State. These banks play a crucial role in establishing a
link between cooperative banks and the Reserve Bank of Office Staff: Responsible for performing day-to-day
India. work.
Tier-2: District/Central Cooperative Banks - These organi- PACS are being mandatorily audited at least once a year by
zations function at the district level and their main purpose a person authorized by the Registrar of Cooperative Societ-
is to allocate funds to Primary Agricultural Credit Societies. ies (RCS) or a Chartered Accountant appointed by the
Tier-3: Primary Agricultural Credit Societies (PACSs) - These society's committee.

26 July 2025 The Insurance Times