Page 36 - Banking Finance May 2021

ARTICLE

2016-17 2017-18 2018-19 Business diversification in PACS
3 Total Reserves 18860 16800 19379 As PACS are inherited with a unique advantage of performing
4 Deposits 115884 119632 133010 both banking and business activities unlike any other bank,
PACS may augment their resources through deposits and
5 Borrowings 124831 128333 138922
deploy them in various non-credit activities. Financial support
6 Loans outstanding 170460 169630 170048
may be provided by higher financing agencies if need be.
7 Societies in profit 46586 46405 46930 Success stories document-ed by our CTI on good working
8 Amount of profit 6473 4134 5949 societies, functioning in Telangana revealed that PACS with a
9 Societies in loss 38036 37838 37331 major portion of non-credit activities with their traditional
agricultural lending coupled with a few social activities were
10 Amount of loss 3210 7316 7666
posting profits and it is heartening that a few societies have
been paying dividends to the members continuously.
PACS must be rejuvenated
With the advent of the recent technological developments Following are some of the activities, being undertaken by a
in banking industry, many innovations in services and few societies in Telangana.
products are witnessed. It would be stupendous task for Y Owning godowns and providing storage facilities to their
PACS to cope with the present trend unless there is a sea members and also produce loans against pledge of
change in their approach and mindset. A few remedial warehouse receipts.
measures, though not new and which were already
Y Sale of fertilizers and pesticides.
suggested in various committees in the past are furnished
in the following paragraphs, though repetitive in nature. Y Supplying quality seeds through their own seed
processing plants.
Reorganisation of PACS Y Owning rice mills and para-boiled rice mills.
One more exercise of reorganization of PACS needs to be Y Selling quality rice at reasonable price through their
carried out by redefining the viability norms. Only viable own rice depots.
Societies may be allowed to function while potentially viable Y Providing locker facilities.
Societies be merged with the viable Societies. Defunct and
Y Running petrol & diesel retail outlets.
heavy loss-making PACS need to be shelved and their villages
are tagged to the nearby potential Societies. State Y Running 'function halls' and letting out on commercial
Governments should provide necessary infrastructural lines.
support to the reorganized Societies and in turn, NABARD Y Supplying safe water to the villagers by installing a
may provide long term loans to the State Governments water purifying plant in their premises.
under the provisions of Sec. 27 of the NABARD Act, 1981
for capital support to PACS. Y Operating weigh bridges.
Y Extending group insurance coverage for all members.
Y Providing financial assistance for funeral expenses.
Y Institution of meritorious awards to members' wards of
higher classes.
Y Lastly, paying dividends to their members out of the
profits earned every year. (One society was paying 20%
continuously for many years)

There are umpteen number of other non-credit activities
that may be taken up by the societies. NABARD also
envisioned that the societies should transform into vibrant
business organisations by offering multiple products and
services to their members under a single roof. Best practices

36 | 2021 | MAY | BANKING FINANCE