Page 37 - Banking Finance May 2021

ARTICLE

followed by good working societies need to be emanated
by other societies.

Need for augmenting resources
As per the data published by NAFSCOB in its websites, as on
31 March 2019 (latest available), owned funds (capital plus
reserves) of PACS in four States alone, viz.,

Kerala (28%), Maharashtra (12%), Karnataka (9%) and Tamil
Nadu (9%) constituted 58% of the total owned funds of PACS
in the country. It is deplorable that in respect of 18 states,
such percentage was less than one.

As regards deposit base in PACS, it will be interesting to note
that deposits mobilized by PACS operating in Kerala alone authority for the societies (like RBI as in the case of banks
constituted 70% of total deposits mobilized in the country, coming under the gamut of B R Act) and the respective
followed by a wide gap by Tamil Nadu (7%), Karnataka (6%) DCCB shall be vested with the role of supervision over the
and Himachal Pradesh (4%). In the backdrop of increasingly Societies. It should also be made mandatory to send certain
sophisticated and technologically developed banking control returns to DCCBs as in the case of OSC returns being
scenario, it may not be prudent to expect that many submitted by SCBs and DCCBs.
societies with very poor infrastructure and un-professional
staff would be able to attract more deposits. Nevertheless, CAS in computerized environment and
every DCCB should identify the potential and deserving
societies and necessary financial assistance may be provided audit of PACS
to them for acquiring counters and other infrastructural Common Accounting system introduced in PACS or
facilities. Following measures may also help in this direction. computerisation in PACS may have yet to bring the desired
Y Increase the membership by identifying non-members change in the working of the societies as gathered from the
in their area of operation by conducting membership feedback from the staff members of PACS, participating in
drives on a periodical basis. various programs conducted in CTIs. Auditing of PACS is done
Y More concentration in lending to new and non- in a very routine manner. A serious thought should be given
defaulting members. to this aspect by all concerned. A high-level committee
constituting senior officers from NABARD, Department of
Y Formation of SHGs and JLGs and encourage group Co-operation, DCCBs and SCB should be constituted and
lending for enhanced recovery climate.
necessary corrective steps to be suggested.
Y Identify viable activities to supplement the income of
farmers such as dairy, farmyard poultry and lend Revision in the date of calculation of
through individual and JLG modes.
imbalances
Regulatory powers and supervision over One of the problems frequently discussed in co-operative
credit structure is imbalances in loan outstandings at DCCBs
PACS and PACS levels. Generally, it is calculated as on 31 March
Of late, in view of many reasons, SCBs or DCCBs lost control every year. It is felt that this may not give the correct
over the affairs of the PACS and their staff members. No picture. If recoveries are affected at the PACS level on 31
proper supervision is exercised over the affairs of the March, the amount so recovered may not be passed on to
societies through co-operative societies Acts in some states the respective DCCBs on the same day. As a result, the
provide for inspection of the societies by DCCBs in the outstanding at DCCB level will not get reduced. As such, any
capacity of financiers. It is felt that the State Co-operative other date after 30 June may be ideal. In view of the prudent
Bank of the state concerned should act as the regulatory accounting procedure of adjusting the recoveries towards

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