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Cooperative Banking

Long-term finance should exceed short-term finance to develop coop sector: Amit Shah

The need of the hour is to provide adequate institutional coverage for the cooperative sector. Long term (LT) finance should always be more than the short term (ST) finance; only then will the cooperative sector thrive. The higher the LT finance, the better the system, and the ST finance will automatically increase. NABARD should create an extension and expansion wing so that farmers seeking medium and long-term financing can obtain it, said Union Home and Cooperation Minister Amit Shah. He was speaking as the chief guest at the national conference of Agriculture and Rural Development Banks (ARDBs) in New Delhi.

The country has become somewhat paralysed in agriculture finance, whether short-term (ST) or long-term (LT). The activity is flourishing in many places, but it is scattered in many states. We must revive it, and the helpless farmer who has become a victim of inadequacy must be taken on the path of economic development through proper handholding by the cooperative sector. There is no dearth of capital, but our financing system and infrastructure have collapsed; they should be revitalised, and banks must identify such areas in their respective states. The entire infrastructure in Assam, Maharashtra, Madhya Pradesh, and Orissa has collapsed. At present, only 13 states have ARDBs that are performing reasonably well in line with the government’s expectations. The government, NABARD, and the Federation should work together to revive ARDBs. In the coming days, I will also convene a joint meeting to discuss how to build a strong LT finance system in each state, the minister said.

Shah added that by creating new cooperative societies, medium-term and long-term loans have to be provided to farmers. Speedy loans will also have to be provided as well as recovery of loans. Services must also be expanded, and dialogue must be initiated in order to increase the percentage of irrigated land, yield, production, make farmers prosperous, and raise farmer awareness. These banks have financed over 3 lakh tractors, but the country has over 8 crore tractors. We have given medium-term and long-term finance to about 5.2 lakh farmers out of 13 crore farmers. Reforms must not be bank-specific, they should be for the entire sector. The ministry of cooperation has taken many steps. We want to make PACS multi-functional, he explained.

Union Minister of State for Cooperation and North-eastern Affairs BL Verma, Cooperation Secretary Gyanesh Kumar, NCUI President and IFFCO Chairman Dileep Sanghani, President of International Cooperative Alliance – Asia-Pacific Region and Chairman of KRIBHCO Dr. Chandra Pal Singh Yadav were present.

PR Newswire

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