The All India Cooperative Bank Employees’ Federation (AICBEF) has expressed strong reservations to the Reserve Bank of India’s move on conversion of Primary Agricultural Cooperative Societies (PACS) as Business Correspondents of Central Cooperative Banks.
AICBEF General Secretary P. Balakrishnan told Business Line that this move would wipe out the existing PACS from the rural scenario. “It is a retrograde measure and we oppose it tooth and nail. This conversion of PACS to Business Correspondents would destabilise and transfer the rural credit system to the usurious money lenders,’’ he said.
The federation has decided to protest this move by launching a nation-wide strike soon to draw the attention of the Government to this so-called “ill-advised order’’.
There are about 94,000 PACS spread all over the country, of which more than 50,000 have registered a profit of Rs 1,858 crore. The total deposits that these PACS have mopped up amounted to Rs 48,000 crore and total disbursements to Rs 90,695 crore.
The RBI order will reduce these PACs to mere deposit collectors on behalf of the Central Cooperative Banks. It is unfortunate that such an established rural financial intermediary system is on the verge of being wiped out, Balakrishnan lamented.
He further said that the small and marginal farmers depended on the PACs for their credit needs as loans were available at zero per cent and if loans were repaid on or before the due date, they could get interest subsidy from the Central Government.
Courtesy: The Hindu
