Q. With reference to the Primary Agricultural Credit Societies (PACS), consider the following statements:
1.These are government-controlled banks that provide loans to farmers at subsidized interest rates.
2.They provide short-term and medium-term agricultural loans to the farmers.
3.PACS have the capacity to extend agricultural credit with minimal paperwork within a short time.
Which of the statements given above are correct?
Explanation –
Statement 1 is incorrect. PACS are not government-controlled banks. They are member-owned, cooperative societies that operate at the village or Gram Panchayat level. They are part of the Short-Term Cooperative Credit Structure and function under the supervision of respective state governments and the National Bank for Agriculture and Rural Development (NABARD).
Statements 2 and 3 are correct. PACS provide short-term and medium-term agricultural loans to farmers to meet their cultivation expenses, working capital needs, and other agricultural requirements. One of the advantages of PACS is their ability to extend agricultural credit with minimal paperwork and within a relatively short time. Their grassroots presence allows them to have a better understanding of the local needs and to process loan applications more quickly compared to traditional banks.
Source: Forum IAS
