The Draft Model HR Policy proposes a structured financial support mechanism for financially stressed but potentially viable PACS, LAMPS and FSS, placing State Cooperative Banks (STCBs), District Central Cooperative Banks (DCCBs) and State Governments at the centre of the proposed support framework.
Under the proposed District-Level PACS Assistance Fund (DLPAF), eligible societies may receive interest-free or soft loans on a gradually declining basis to meet HR and operational costs and implement Business Development Plans (BDPs).
The contribution of STCBs and DCCBs would depend on their financial position. If both are profitable, they would contribute equally. If the STCB is profitable but the DCCB is loss-making, the STCB and State Government would share the contribution equally.
Where the STCB is loss-making but the DCCB is profitable, all three, STCB, DCCB and State Government, would contribute equally. If both banks are loss-making, the State Government would fully support the fund.
The proposed assistance would decline from 100% in the first year to 20% in the fifth year, subject to business growth and performance milestones. PACS failing to achieve profitability or sustainability targets could face withdrawal of assistance and a manpower review.
The draft policy thus seeks to link financial support from the cooperative banking structure to measurable business growth and eventual self-sustainability of PACS.
