The Reserve Bank of India (RBI) and the National Bank for Agriculture & Rural Development (Nabard) have given their in-principle approvals to commercial banks roping in more primary agriculture cooperative societies (PACs) to disburse crop loans in Maharashtra. Under such an arrangement, Nabard would provide refinance to commercial banks and the crop loan to farmers would be routed through PACs, which would play the role of business correspondents.
The decision was taken by the state-level banker's committee of Maharashtra, chaired by Chief Minister Prithviraj Chavan. The meeting was also attended by RBI Deputy Governor K C Chakrabarty and Nabard Chairman Prakash Bakshi. The decision follows the state government's move to supersede Maharashtra State Cooperative Bank's 44-member board of directors for procedural lapses and huge exposure to cooperative sugar and spinning mills.
Speaking to Business Standard, Prithviraj Chavan said, “At Wednes'day's meeting, a comprehensive plan was finalised for the disbursement of crop loans of Rs 23,180.66 crore for 2011-12, compared with Rs 13,150.88 crore in 2010-11...The government wants commercial banks to play a pro-active role to increase their share. The government would provide all the necessary help.” Nabard Chairman Bakshi said, “The primary objective is timely availability of crop loans to farmers and Nabard would provide the necessary refinance to commercial banks which lend to farmers through PACS.”
M D Mallya, chairman and managing director, Bank of Baroda said, “The apex co-operative bank has been in some sort of a difficulty and therefore, the banking system needs to ensure that the credit flow is not curtailed.”