SAHAKARA SINDHU
Department Of Cooperation, Government of Karnataka

Agricultural Credit     ||    Non Agricultural credit    ||    Marketing     ||     Processing     ||     Consumer     ||     Dairy     ||     Housing


AGRICULTURAL CREDIT SECTOR

For more details contact :

M.D.Mathapati Addl.RCS,(Credit) ,
Contact No :080-22256146 ,
Email : addlrcs-credit-ka@nic.in

Abdul Bari.k, ARCS (Credit-1) ,
Contact No :080-22269636/37 Ext : 215 ,
Email : arcs-credit-ka@nic.in

Sandhya.H.V(In Charge), ARCS (Credit-2) Contact No :080-22269636/37 Ext : 235 ,
Email : arcs-credit-ka@nic.in

M.Rangaswamy, ARCS
(In Charge)(LDB
)
Contact No :080-22269636/37 Ext : 215 ,
Email : arcs-ldb-ka@nic.in

SHORT TERM, MEDIUM TERM AND LONG TERM LOAN

     Economy of the State is mainly dependent on agriculture as more than 65% of the total population is engaged in this sector. Credit is an essential sinew for the progress of economic development. In a developing economy like ours Agriculture Credit assumes greater significance on account of the fact that it is a critical input to support and sustain crop production.

    • The Co-operative Credit system is the oldest sector of the co-operation movement and consists of short term credit, medium term credit and long term credit structure.

    • Short Term structure is a three tire structure with Primary Agricultural Credit societies in rural areas, Co-operative Central Banks at the district level and the Apex Bank at the state level.

    • The Short Term credit structure provides Short Term credit for crop production and Medium Term credit for small developments through Primary Agricultural Co-operative Societies. Out of 5266 PACS in state 5049 PACS are functioning and are affiliated to 21 District Cooperative Banks (DCCB) with 634 branches. The Central Banks secure refinance facilities from NABARD through Karnataka state Co-operative Apex Bank.The average lending per farmer is Rs.37716 and average advance per PACS is Rs.168.75 lakhs.

    • Karnataka state cooperative Agriculture and rural development Bank (KSCARD) at the State level and Primary cooperative agriculture and 177Primary cooperative Agricultural and Rural Development banks at the taluk level cater to the long term credit needs in the two tier credit delivery system. The National bank for Agriculture and Rural Development (NABARD) provides refinance to the Apex bank and KASCARD Bank.

Agricultural loans to farmers at 6%:

     The State Government has implemented w.e.f. 01-04-2004 the scheme of providing Agricultural loans at the rate of 6%. The credit goes to the Government for having brought this scheme for the first time in the Country.

     The Government has accorded sanction for charging interest at the rate of 6% on S.T. M.T and L.T. loans availed by the farmers. Accordingly the Co-op. Societies/Institutions have implemented the scheme. The Government reimbursed an average of 5.5% differential interest to Co-op. Societies.Under this scheme Government has released Rs.60.00 crores and Rs.80.00 crores during the years 2004-05 and 2005-06 respectively.

Agricultural loans to farmers at 4% :

     Government has implemented with effect from 01-04-2006 the scheme of providing Short Term, Medium Term and Long Term loans to farmers and Government will reimburse 7.5% interest subsidy on the loans issued to farmers through Credit Co-operative Societies. Under this scheme an amount of Rs 153.41 crores has been realesed by the Govt.

Interest subsidy on Agricultural Loans disbursed at 3 % :

     The scheme of advancing agricultural and allied loans to the farmers at 3 % through Cooperative credit institutions has been implemented from 01-04-2008.  The Government is providing interest subsidy at prescribed rate to the concerned institutions. An amount of Rs. 27700.00 lakhs has been earmarked to implement the scheme in the budget for 2010-11 and the entire amount released by Government has been released to 14,76,251 farmers through concerned cooperative institutions.

Agricultural loans to farmers at 1% :

     Government has implemented with effect from 01-04-2011 the scheme of providing Short Term agricultural loans to farmers up to 3.00 lakhs and The Short term Agricultural loans which were not due on 31-03-2011 . The scheme of lending Medium and long term Agricultural loans up to Rs. 10.00 lakhs at 3 %  is continued in this year also. Government has made budget provision of  Rs.625.00 crores and released Rs.435.00 crores to implement the scheme.

       An amount of Rs. 13100.00 lakhs has been released to 100281 SC beneficiaries under the SCP programme and Rs. 1094.00 lakhs has been relased to 77035 ST beneficiaries under TSP  programme and 100 % progress achieved in utilizing the fund allotted fo SC/ST

Agricultural loans to farmers at 0% & 1%:

     Government has implemented with effect from 01-04-2012 the scheme of providing Short Term Agricultural loans to farmers up to Rs. 1.00 lakhs at 0% interest rate and crop loans above Rs.1 lakh to Rs.3.00 lakhs are continued to be lend at 1%.The scheme of lending Medium and Long Term Agricultural loans up to Rs.10.00 lakhs at 3% is continued for the year 2012-13. Government has made budget provision of  Rs.392.04 crores and released Rs 392.03 crores to implementthe scheme.

Plan for the year 2014-2015

                It is proposed to disburse Rs 10000.00 crores of agricultural loans to  23.50 lakh farmers in the State @ 0% upto 3.00 lakhs through Cooperatives for the year 2014 –2015. Medium and Long term agricultural loans upto Rs.3.00 lakhs are being lent at 3%.

Disbursement of Loans :

Agricultural Loans disbursement from 01-04-2013 to 31-03-2014

                                                                                                                                                                       (Rs in crores)

Sl.No

Particulars

Number

Amount

Out of which Loans for New members

Out of which Loans to SC/ST members

No

Amt

No

Amt

1

Short term loan

2109515

7559.73

143998

481.06

292454

764.16

2

Medium term loan

16607

309.08

13092

231.20

1772

20.25

3

Long term loan

16375

212.00

12509

106.38

1186

9.49

 

  Total

2142497

8080.81

169599

818.64

295412

793.90

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The funds involved by various institutions in the Short term  agricultural loans disbursed through PACS is as follows :

Sl.No

Name of the Institution

Funds Involved
(Rs.Crores)

1

NABARD

4025.00

2

APEX Bank

1092.06

3

DCC Banks

1990.85

4

PACS Own fund

301.37

5

Commercial Bank

150.45

6

Total

7559.73



 

Performance of Short Term, Medium Term and Long Term Credit Structure in the Karnataka

      In the 12th  five year plan, Rs.14630.99 crores of  agicultural loans has been disbursed as against the target of Rs. 60321.68 crores achieving 24.25 % .

       As on 31-3-2014, the short term(ST) , medium term(MT) and long term (LT) loans issued by the co-operative credit system in the state was Rs.7559.73crores, Rs.309.08 crores and Rs.212.00 crores respectively achieving 95.13% as against the annual target.

Performance of ST, MT and LT Credit Structure in the Karnataka, from 2011-12- to 2013-14
                                                                                                                                                                                             ( Rs.In Crores)

Year

 Short term

Medium term

 Long term

 Total

Percentage (%)

Target

Achievement

Target

Achievement

Target

Achievement

Target

Achievement

2011-12

5400.00

5631.05

300.00

243.17

181.60

191.80

5881.60

6066.02

103.13

2012-13

6400.00

6030.00

300.00

314.38

187.08

205.52

6887.08

6344.67

95.11

2013-14

7936.00

7559.73

375.00

309.08

183.08

212.00

8494.98

8080.81

95.13

#

 

#

 

#

 

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Recovery of loans

           The comparative position  of recovery of short, medium and long term loans under the cooperative credit system in the state for the years from 2011-12to 2013-14 is presented in the following table.

                                                                                                                                                                                                             Rs. in Crores

Year

Short term loan

Medium term loan

Long term loan

Demand

Collection

Balance

% of Recovery

Demand

Collection

Balance

% of Recovery

Demand

Collection

Balance

% of Recovery

2011-12

4633.81

4432.48

201.32

95.66

117.14

98.21

19.20

83.65

636.33

292.71

343.61

46.00

2012-13

5256.90

4485.64

771.26

85.32

145.18

120.04

25.14

82.68

572.92

286.72

286.20

50.04

2013-14

6257.16

6061.20

195.96

96.87

182.72

157.77

24.95

86.35

605.20

356.23

248.97

58.82

 

Karnataka State Co-operative Agricultural & Rural Development Bank Ltd.,

(Rs in Lakhs)

Sl.No

Particulars

2011-12

2012-13

2013-14

1

Paid up Share Capital

5207.96
5207.96
5654.94

Of which Government

445.55
445.55
445.54

2

Reserve Funds

2647.56
2658.46
2830.67

3

Other reserves

2284.15
1990.37
2100.54

4

Provision for NPA

9723.46
9723.46
8957.30

5

Fixed Deposits

2922.27
4420.10
7387.63

6

Other Deposits

3739.83
3890.37
4481.15

7

Borrowings Debenture & O.D.

156683.19
131546.88
141592.14

8

Working Capital

1198072.08
207975.69
201088.64

9

Sinking Fund Investment

634.00
634.00
-

10

Other Investments

6513.00
3897.60
7947.97

11

General Investment (Short Term Deposit)

36049.80
23131.17
17855.28

12

Total Loan Outstanding

133560.42
134303.85
137679.13

13

177 PCARD Banks Share Capital

12056.75
11565.70
12998.05
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KISAN CREDIT CARDS

      The Kisan Credit Card Scheme introduced in the year 1997 – 1998 aims at providing timely and adequate credit support to the farmers for their cultivation needs in a flexible and cost effective manner. As on 31.3.2014 since inception out of which 23,54,523 KCC cards has been distributed and 205384 farmers are covered under Personnel accident insurance scheme.

 

SELF HELP GROUPS

Interest subsidy to Self help groups :-

      The scheme of advancing loans to self help groups in Karnataka at 4 % has been implemented from 01-04-2007. The Government is providing interest subsidy at 9.0% to PACS and 7.50% to DCC Banks on the loans disbursed by these institutions. During the year 2013-14, an amount of Rs. 56950.00 lakhs of loans has been disbursed to 36980 groups and Rs.2000.00 lakhs of interest subsidy has been released.

                                                                                                                                                                                                 Rs. in Lakhs

Year

Group Formation

Fresh Finance

Repeat Finance

Total Loans

Target

Achievement

Target

Achievement

Target

Achievement

Target

Achievement

No

Amt

No

Amt

No

Amt

No

Amt

No

Amt

No

Amt

2011-12

25000

14296

25500

25500

12418

8086

24750

49500

22728

33906

50250

75000

35416

41992

2012-13

25000

17350

25500

25500

11531

9892

24750

49500

25169

42067

50250

75000

36700

51959

2013-14

30000

13765

33150

331.50

11097

9634

32175

64350

25883

47323

65325

97500

36980

56950

#

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REVIVAL PACKAGE FOR SHORT TERM CO-OPERATIVE CREDIT STRUCTURE

      In order to strengthen the short term co-operative credit structure in the State, the Govt of Karnataka has signed the Memorandum of Understanding with Govt. of India and NABARD on 25-03-2008 for implementation of the revival package formulated by the Government of India based on the recommendations of the task force headed by Prof. A. Vaidyanathan. In view of the above, the State level implementation committee (SLIC) under the chairmanship of the principal secretary to the Govt. Finance department has approved Rs.769.87 crores as the amount under this package pertaining to 4474 PACS coming under the jurisdiction of all DCCBs as on 31-3-2004.

   The SLIC has sanctioned the Recapitalization assistance to the PACS as under on 31-3-2010.

                                                                                                                                                                                    (Rs.in Crores)

Sl.No

 

No of PACS

Category


Total Revival package Amount


GOI Share


GOK Share


PACS Share


Total

1

2009-10
First installment

1834

A

139.74

39.53

23.00

202.27

2

2010-11
Second installment

1459

B

201.62

25.97

17.84

245.43

3

Third installment

960

C

215.17

21.22

28.47

264.86

4

Ineligible PACS

220

-

45.6

5.17

6.54

57.31

Total

4473

A,B,C,D PACS

602.13

91.89

75.85

769.87

       

  • The assistance earmarked for 219 PACS which come under ineligible category is  Rs.50.77 crores (GOI Rs.45.60 crores and GOK share Rs.5.17 crores).  The decision on releasing the above said amount will be taken by SLIC.

  • The PACS share of Rs.75.85 crores to be adjusted by the PACS after improving the resources using their own capital by adopting Business Development Plan.

  • The GOK has made budgetary provision of Rs.91.89 crores towards Revival Package during 2010-11.

  • For the year 2009-10, the amount of Rs.202.27 crores has been released to 1834 ‘A’ category PACS on March-2010 through respective DCCBs, towards the assistance under the package.

  • For the year 2010-11, the amount of Rs.245.43 crores has been released towards 1459 to ‘A’ category PACS of Bidar, South canara and Udupi and the remaining all B and a few ‘C category PACS in March-2011 through respective DCCBs and the remaining portion of second instalment  amount of Rs.264.86 crores has also been released to 960 PACS of the remaining ‘C’ category in April-2011 through respective DCCBs.

  • Among all DCC Banks, the two weak banks, viz, KCC Bank Ltd., Dharwad and Kolar DCC Bank Ltd., have got Rs.126.81 crores and  Rs.69.09 crores  respectively under the revival package. As a result of this, these two DCCBs have become currently viable and have complied with Section 11 of the Banking Regulation Act. This recapitalization assistance has been utilized effectively for the strengthening of short term credit structure by adopting the Development Action Plans (DAP) for DCCBs and Business Development Programmes (BDP) for PACS to become economically vibrant and sustainable in 3 years.       

   Progress Achieved By PACS After Implementation Of Revival Package.

Sl.No

Particulars

Pre-implementation (31-03-2010) (1-4-2009 to 31-3-2010) 

post-implementation (31-03-2014) (1-4-2013 to 31-3-2014) 

1

No of PACS in the state

4613

5270

2

No Of PACS Selected for BDP

4403

4535

3

No of Societies which have attained current viability

1877

4372

4

No of Societies which have attained Sustainable viability

1097

1495

5

Total Deposits mobilised by PACS

1869.89 crores

5019.31 crores(+313.65 cr)

6

Total Credit Business of PACS

4305.98 crores

9516.57crores(+188.70cr)

7

Non Credit Business of PACS

668.58 crores

1551.44crores(-8.28cr)

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