New District Cooperative Banks to Open in India to Boost Agriculture Loan Facilities

Key Highlights

• District cooperative banks to increase by 50% for better agricultural loans.
• Focus on strengthening PACS with technology and transparency.
• Over 300 services are offered through PACS in rural areas.
• Goal to establish cooperative banks in 80% of districts in 5 years.
• Enhanced financial support to farmers and rural development.

In a major push to support farmers and the agriculture sector, Union Home and Cooperation Minister Amit Shah announced that the number of district cooperative banks in India will increase by 50%. This initiative aims to provide easier access to agricultural loans and strengthen the cooperative sector. The announcement came during the Diamond Jubilee Celebrations of the National Federation of State Cooperative Banks Limited (NAFSCOB) and the National Meeting of Rural Cooperative Banks in New Delhi.

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50% Growth in District Cooperative Banks

Currently, there are cooperative banks in 300 districts across the country. Amit Shah stated that this number will be raised by 50% before the upcoming elections. This growth is expected to improve the overall development of India’s rural economy by offering farmers better access to financial services.

Key Role of Cooperative Banks in Agriculture

Amit Shah emphasized that cooperative banks play a crucial role in supporting farmers, especially in providing short-term agricultural loans to around 13 crore farmers in India. He acknowledged that the three-tier system of Primary Agricultural Credit Societies (PACS), district cooperative banks, and state cooperative banks has been vital in supporting India's agriculture sector over the last 75 years.

These banks not only assist with agricultural loans but also contribute to various activities such as collective farming, water management, and the supply of farming materials, strengthening rural areas.

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Strengthening PACS and Technology Integration

The Minister stressed that for the cooperative sector to thrive, PACS need to be strengthened. He highlighted the importance of integrating technology into PACS to ensure transparency and smooth functioning. By doing so, the overall efficiency and viability of the cooperative system can be improved.

The government is also looking at long-term financing options through PACS, which would enhance their business. Currently, district cooperative banks hold deposits of ₹4.31 lakh crore, and state cooperative banks have ₹2.42 lakh crore in deposits. By increasing low-cost deposits, the ability of these banks to provide loans will also grow.

300+ Services in Villages

Amit Shah also shared how PACS are evolving. Many PACS have started offering a wide range of services, including running Pradhan Mantri Jan Aushadhi Kendras, dairy operations, and fishermen's committees. Around 744 PACS have received drug licenses, and approximately 39,000 PACS have become Common Service Centers (CSCs), offering more than 300 services to rural communities.

Future Growth and Cooperation

NAFSCOB currently consists of 34 state cooperative banks, 352 district-level cooperative banks, and 105,000 PACS, with 65,000 of them active. The goal is to establish cooperative banks in 80% of India’s districts in the next five years, which will significantly strengthen the sector. This expansion will help address the unique challenges faced by each district, with cooperative banks taking responsibility for local issues.

Shah concluded by stressing that transparency and a strong sense of cooperation are key to the success of this initiative. By ensuring that problems at the village, district, and state levels are addressed by their respective cooperative banks, the government aims to earn the trust of the public and enhance the spirit of cooperation.

This move is expected to have a transformative impact on India’s cooperative sector, especially in rural areas, and will provide essential financial support to the farming community.

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CMV360 Says

The expansion of district cooperative banks and the strengthening of PACS will greatly benefit India's agricultural sector. With improved access to loans, enhanced services, and technological integration, this initiative aims to support farmers, boost rural development, and foster greater transparency, ultimately driving the growth of the cooperative sector.