The Hindu : Other States / Punjab News : Concern over declining recovery rates

Online edition of India's National Newspaper
Thursday, May 12, 2005

Other States

Other States - Punjab

Concern over declining recovery rates

Staff Correspondent

NABARD chief praises Punjab Government's fiscal reforms

CHANDIGARH: The chairperson of the NABARD, Ranjana Kumar, while appreciating the fiscal reforms undertaken by the Punjab government to revive the state economy, has stressed the need to re-organise the Punjab Agricultural Cooperative Societies (PACS), as they had shown a declining trend in recovery over the last three years.

Besides, she also raised the issue of frequent transfers of the Managing Director of Punjab State Cooperative Bank (PSCB) and Punjab State Cooperative Agriculture Development Bank (PSCADB), where an officer had been transferred five times during the last 5 years. This, she stressed, had hampered the efficiency of the organisations.

In a meeting with the Chief Minister, Amarinder Singh, she urged that loss making PACS be merged with the ones in profit, thereby bringing down their number to ensure efficient functioning. She pointed out that out of 4300 PACS, about 1600, which accounted for 37 per cent, were incurring loses, while the over all recovery rate has slipped from 85 to 82 percent during the last three years.

Referring to the financial position of District Central Cooperative Banks (DCCBs), Ms. Kumar said that all the 18 branches complied with statutory specifications, while 17 had received `A' grade audit classification, by returning recoveries at a rate of 90 per cent as on June 30, 2004. The accumulated losses of Rs.4.04 crores and imbalances of Rs.105.16 crores together formed 17.9 per cent of the total owned funds by the closing of the last fiscal on March 31, 2004.

Ms Kumar also urged the state government to recruit well-qualified and trained staff in the DCCBs to provide better services to the customers. She also offered to provide training for upgrading the professional skills of the staff managing these banks in the training cell of NABARD. The NABARD had sanctioned 3684 projects under Rural Infrastructure Development Fund (RIDF) involving financial assistance of Rs.1683.58 crores. Of this Rs.1110.45 crores, which worked to 71 per cent, had already been disbursed. Taking part in the deliberations, Capt. Singh pointed out that target set under the Common Minimum Programme of the United Progressive Alliance (UPA), to double agriculture credit over the next three years faced a major bottleneck of high rate of interest and meagre refinancing. Consequently, more than 50 per cent of the credit needs of the farmers were still met by moneylenders.

While impressing upon the NABARD to increase the quantum of refinance from 30 to 75 per cent, the Chief Minister suggested that it should consider reducing interest rates on all types of refinance so that agriculture loans were extended to the farmers at a lower rate of interest.

Printer friendly page
Send this article to Friends by E-Mail

Other States

News Update

Stories in this Section

Concern over declining recovery rates