Various initiatives have been taken for the expansion and modernization of PACS.
About PACS
- Definition: PACS are the grassroot level arms of short-term co-operative credit structure (refer to infographics).
- Regulation: PACS are registered under Cooperative Societies Act and are administered by concerned State Registrar of Cooperative Societies (RCS).
- SCBs/DCCBs are also registered under provisions of State Cooperative Societies Act of State concerned and are regulated by RBI.
- However, PACS are outside purview of Banking Regulation Act, 1949 and are not regulated by RBI.
- Refinancing: They are refinanced by NABARD through DCCBs and SCBs.
- Functions:
- Gives short-term credit loans and collects repayment from rural borrowers.
- They can also provide other input services, like seed, fertilizer, and pesticide distribution to member farmers.
- Significance: PACS play a key role in financial inclusion.
- PACS account for 41 % of the KCC loans given by all entities in the Country and 95 % of these KCC loans through PACS are to the Small and Marginal farmers (2022).
- Current Status: There are more than 65000 functional PACS across country.
Co-operative Agriculture Credit Structure in India, which is divided into two main categories:
- Short Term Credit (Three-Tier System):
- State/Central Co-operative Bank (SCB)
- District Central Co-operative Bank (DCCB)
- Primary Agriculture Credit Society (PACS)
- Long Term Credit (Two-Tier System):
- State/Central Co-operative Agricultural Rural Development Bank (SCARDB/CCARDB)
- Primary Co-operative Agricultural Rural Development Bank (PCARDB)