1. मुख्य पृष्ठ
  2. Strengthening of Rural Cooperative Banks

Strengthening of Rural Cooperative Banks

Government of India
Ministry of Cooperation 

Strengthening of Rural Cooperative Banks
 

There is a three-tier structure of rural cooperative banks to ensure flow of finance in the cooperative sector, with 34 State Cooperative Banks at the Apex, 351 District Central Cooperative Banks (DCCBs) at the district level, and about 1 lakh Primary Agricultural Credit Societies (PACS) at the grass root level.

The rural credit delivery system depends on Cooperative Banks because of their wide network and business capability. It is noteworthy that with more than 10.5 Crore Accounts in the country , majority of the farmer members are associated to these.

Government of India has taken several steps to strengthen Rural Cooperative Banks such as:
 

  • CGTMSE now includes Rural Cooperative Banks as Member Lending Institutions [ MLIs] . With this now rural cooperative bank will be able to avail the benefit of risk coverage up to 85 percent on their disbursed loans. Along with this, the cooperative sector enterprises will also be able to get collateral free loans up to Rs 5 crore from cooperative banks. ( CGTMSE Circular No.194 / 2021 – 22 dated 03.02.22)
     
    • Rural cooperative banks are now being brought onboard on the Aadhaar Enabled Payment System' ( AePS ) , bringing digital revolution in the cooperative sector. To facilitate small co-operative banks in this sector, the license fee has been reduced by linking it to the number of transactions. Apart from this , cooperative financial institutions will also be able to get the facility free of cost for the first three months of the pre-production phase. With this, farmers will now be able to get the facility of banking sitting at home on their fingerprints .( UIDAI Circular No. 04 of 2023 dated 05.04.2023 )

 

    • The boards of rural co-operative banks are also empowered to make One-Time Settlement and write-off of their loans . Due to which now they will be exempted from the pressure of dual control and, this will further add to their financial strength(
    • RBI/2023-2024/40DOR.STR.REC.20/21.04.048/2023-24   dated 08.06.23)

 

    • Rural co-operative banks will be able to diversify their business by lending to commercial real estate - residential housing sector , which not only benefit rural co-operative banks but residential co-operative societies will also be benefited . ( RBI/2022-2023/67 DOR.CRE.REC.43/09.22.010/2022-23 dated 08.06.23)

 

    • The limit of individual housing loans of rural cooperative banks has been increased two and a half times . Now rural co-operative banks will be able to give loans up to Rs 75 lakh to farmer members for personal housing , due to which the members will also move towards prosperity . ( RBI/2022-2023/67DOR.CRE.REC.43/09.22.010/2022-23 dated 08.06.23)

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