Overwhelmed by the criticism on the issue of PACS, NABARD backtracked somewhat on Monday and issued a clarification of its July 22 circular.
Nabard hastened to add that regular functioning of PACS will remain intact even if they become BC.
Nabard’s sudden announcement that it would end the role of primary agriculture cooperative societies as lenders to farmers has caused consternation in the cooperative circles.
The cooperative unions of several states including apex body NAFSCOB has said the Nabard move could jeopardize the very network of PACs in the country that has played an important role in providing farmers with short term credit for seasonal farming activities.
Sources pointed out that in the event of dissolution of PACs farmers would get badly exposed to traditional usury and this could seriously affect agriculture.
As per the Nabard’s circular, PACS would, however, work as business correspondents of central cooperative banks. The change is being brought about in line with the RBI’s direction, the circular noted.
