Cabinet approves Computerization of Primary Agriculture Credit Societies(PACS)

What is the News?

Cabinet Committee on Economic Affairs has approved the Computerization of Primary Agricultural Credit Societies (PACS).

The objective behind this is to increase the efficiency of PACS, bring transparency and accountability to their operations; facilitate PACS to diversify their business and undertake multiple activities/services.

What are Primary Agricultural Credit Societies (PACS)?

Primary Agricultural Cooperative credit societies (PACS) constitute the lowest tier of the three-tier Short-term cooperative credit(STCC) in the country.

Note: The other two tiers are: State Cooperative Banks(StCBs) and District Central Cooperative Banks (DCCBs).

Controlled by: At present, PACS fall within the jurisdiction of state governments. 

Currently, there are 63,000 PACS in the country and the Centre has a target to scale them up to 3 lakh by 2025.

Importance of PACs: PACs comprises approximately 13 Cr. farmers as its members.PACS also account for 41 % of the Kisan Credit Card(KCC) loans given by all entities in the Country and 95% of these KCC loans (2.95 Cr. farmers) through PACS are to the Small and Marginal farmers. 

Why are PACs computerized?

PACS are still functioning manually resulting in inefficiency and trust deficit. In some of the states, stand-alone and partial computerization of PACS has been done.

There is also no uniformity in the software being used by them and they are not interconnected with the DCCBs and StCBs.

Hence, the computerisation of all the PACS is being done.

Note: The other two tiers viz.StCBs and DCCBs have already been automated by the NABARD and brought on Common Banking Software (CBS).

What are the benefits of the computerisation of PACs?

Firstly, it will help in bringing PACs on a common platform at the National level and have a Common Accounting System(CAS) for their day-to-day business.

Secondly, it will also help in improving the outreach of the PACS as outlets for banking activities as well as non-Banking activities apart from improving digitalisation in rural areas.

Source: The post is based on the article “Cabinet approves Computerization of Primary Agriculture Credit Societies(PACS)” published in PIB on 29th June 2022