The National Cooperative Agriculture & Rural Development Banks Federation (NAFCARD) organized its Board Meeting and Annual General Meeting (AGM) at the newly renovated boardroom of Gujarat’s Kheti Bank in Ahmedabad on Thursday. A host of issues plaguing the Kheti Banks, active in the country, were debated during the meeting.
Out of the sixteen Kheti Banks, three are almost dysfunctional. Among the remaining thirteen banks, the aggregate NPA hovers around 35%. The AGM decided to petition the Union Government for a revival package to bring the ailing banks back on track. The fund required to help them recover is roughly estimated at Rs 10,000 crores.
Besides ICA-AP Chairman Dr. Chandra Pal Singh Yadav, the AGM was attended by several prominent personalities from the cooperative sector, including Bijendra Singh, G.H. Amin, GCMMF Chairman Shamalbhai Patel, and K. Ravindra Rao. Rajya Sabha members Narhari Amin and Mayankbhai Nayak were also present.
NAFCARD Chairman Dolar Kotecha, who also serves as Chairman of Gujarat’s Kheti Bank, extended a warm welcome to all cooperators. He emphasized NAFCARD’s role in strengthening the long-term credit cooperative structure and discussed the federation’s efforts to achieve Prime Minister Narendra Modi’s vision of ‘Sahakar Se Samriddhi’ (Prosperity through Cooperation).
During the meeting, it was noted that out of 16 State Cooperative Agriculture and Rural Development Banks (SCARDBs), only a few are performing well. SCARDBs in Odisha, Assam, and Bihar are currently non-functional, with the Odisha SCARDB facing liquidation as per a state government decision. The SCARDBs in Pondicherry, Tripura, and Jammu & Kashmir are small and have incurred significant losses, with their revival pending state government decisions.
The revival of the Haryana SCARDB, which has accumulated losses of Rs 415 crore, and most PCARDBs with recoveries below 15%, was highlighted as a special case needing urgent attention. A rough estimate of Rs 10,000 crore has been proposed as the financial package required for the Long-Term Credit Cooperative Structure (LTCCS).
The meeting also reviewed updates on the centrally sponsored scheme for the computerization of ARBDs. Kerala and Rajasthan SCARDBs are yet to receive state government approval for the scheme. In Karnataka, the tendering process for hardware procurement is underway, while Gujarat SCARDB has developed operational software and seeks only hardware and digitization support under the central sector scheme.
Additionally, discussions were held on retaining the membership of six SCARDBs—Rajasthan, Uttar Pradesh, Assam, Odisha, Pondicherry, and Tripura—due to significant dues. Rajasthan and Uttar Pradesh SCARDBs owe approximately Rs 87 lakh in annual membership subscriptions to NAFCARD, overdue by 4-5 years.
Several other important issues discussed during the meeting included the granting of banking licenses to SCARDBs, extending DICGC insurance coverage to deposits of ARDBs, TransUnion CIBIL membership for ARDBs, and reforms in NABARD’s refinance policies, among others.
At present, the Long-Term Credit Cooperative Structure comprises 16 SCARDBs, of which only 13 are fully functional, with a network of 1,868 PCARDBs/branches of SCARDBs at the ground level.
These banks have a total membership of 1,02,79,500 rural households, of which 32,93,559 have outstanding loans. The Total Loans Outstanding and Borrowings Outstanding of these banks as of 31.03.2024 were Rs 21,474.16 crores and Rs 12,219.44 crores respectively.
The fully functional SCARDBs have total deposits of Rs 2,259.51 crores as of 31.3.2024, compared to Rs 2,222.72 crores as of 31.3.2023. Their total lending during 2023-24 stood at Rs 5,616.59 crores, compared to Rs 5,429.43 crores during the previous year. Aggregate recoveries were 41.07% as of 31 March 2024, compared to 41.21% last year.
The gross NPAs of 13 fully functional SCARDBs slightly decreased to 36.43% in 2023-24 from 38.84% in the previous year. Only Kerala, Pondicherry, and Tamil Nadu managed to contain the NPA at tolerable levels of 11.81%, 2.96%, and 9.57% respectively. The gross NPAs of all other SCARDBs stood above 25%.
Thanks for this wonderful SWOT kind of write up.
I have always maintained that that wherever Rural Development banks have failed there would be a successful PACCS. Only those farmers who knew the difference would get the loans.
The government or RBI says that NPAs should be under 3% but new loan advances should be 5_20 % . When a new member particularly a farmer has to be so clear in his decision to avail loans from Rural Development banks.
Indian cooperative website always have brilliant cover_ up to all kind of challenges faced by coops and at the same time appreciate the good governance.
In which ever way the central government decide it will be good for the nation.
Regards
Ramachandran