33,000 primary agri credit societies to offer doorstep digital banking

About 33,000 primary agriculture credit societies (PACS) will offer doorstep banking services by the end of FY24. Union Budget 2023-24 has allocated ₹968.24 crore to enable these PACS with Common Accounting System (CAS) and Management Information System (MIS) during the financial year.

Union Budget 2023-24 says that the project will expand financial services to unbanked villages/areas and also improve the overall performance and efficiency of PACS by increasing its efficiency of PACS and transparency, accountability in their working.

PACS are registered cooperative societies that mainly offer input facilities in the form of cash or kind component, agriculture implements on hiring basis and storage facilities for its farmer members. Constituting of the lowest tier of the three-tier Short-term cooperative credit (STCC) in the country, PACS have about 13 crore farmers as its members, and account for 41% (3.01 crore farmers) of the Kisan Credit Card (KCC) loans given by all entities in the country.

Among these 33,000 PACS, 20,000 will be equipped to use digital infrastructure like Point of Sale (POS), Mobile POS (MPOS), QR Code Readers, Green Pin solution, BHIM AADHAR pay device, Mobile Signal Boosters, Mobile Demo Vans, Micro ATM etc for offering door step financial services.

All 33,000 PACS will be provided working internet/broadband connection, and the government intends to conduct 2,200 training sessions to impact necessary skills to the PACS staff for using technology.

As per PACS Database of NABARD, the average number of borrowers per PACS is 528. Hence it is estimated that the number of loans and borrowings disbursed through such computerised PACS could be 1.74 crore by the end of FY24.

The Ministry of Cooperation, which is spearheading the programme, says a national cooperative database is being prepared for country-wide mapping of cooperative societies and ensure that farmers, especially small and marginal farmers, and other marginalised sections, are benefited through the cooperative-based economic development model.

The ministry had also carried out stakeholders consultations to formulate model bye-laws for PACS were formulated enabling them to become multipurpose PACS.

The project is part of the ongoing government funded initiative to computerize 63,000 PACS across India over a period of five years. The Cabinet Committee on Economic Affairs had approved it in June 2022 with a total budget outlay of ₹2,516 crore (with Government of India share of ₹1,528 crore).