National Cooperative Policy Calls for Apex Bank to Enhance Collaboration and Credit Structure.

A new national policy on cooperatives in India calls for an apex cooperative bank to enhance collaboration among various tiers of cooperative financial institutions, preserving the three-tier credit structure of Primary Agricultural Cooperative Societies, District Credit Cooperative Banks, and state cooperative banks to provide affordable credit. The policy aims to harness the potential of cooperatives and provide support and capacity building for professionalism.

The Indian government has recently launched a new national policy on cooperatives, aimed at bolstering the cooperative financial sector and promoting financial inclusion. The policy emphasizes the establishment of an apex cooperative bank to enhance collaboration among various tiers of cooperative financial institutions while preserving the three-tier credit structure of Primary Agricultural Cooperative Societies (PACS), District Credit Cooperative Banks (DCCBs), and state cooperative banks [1].

The policy aims to provide affordable credit to rural and urban areas, particularly in uncovered regions. It proposes the establishment of one PACS in every panchayat, one DCCB in every district, and one Urban Cooperative Bank (UCB) in every urban centre, subject to viability. This initiative is expected to advance financial inclusion through cooperatives [1].

The new policy also seeks to strengthen the role of PACS by designating them as implementing agencies for various government schemes at the grassroots level. Incentives will be provided to well-performing PACS to encourage efficiency and accountability [1].

The policy further calls for an apex cooperative bank to support and provide capacity building for professionalism in the cooperative sector. This apex bank will work in tandem with the Reserve Bank of India (RBI) to enhance collaboration and support the growth of cooperative financial institutions [2].

The policy also mentions the formation of a task force to examine the challenges faced by cooperative credit institutions and suggest measures to address these challenges, including issues of long-term credit and recommending a roadmap to increase the deposits of DCCBs [3].

The new national policy on cooperatives is expected to benefit the cooperative sector, which has over 800,000 cooperative societies, comprising around 200,000 cooperatives and 600,000 non-credit cooperatives. PACS alone have more than 130 million members spread across the country [3].

References:

[1] https://www.indiancooperative.com/co-op-news-snippets/ncp-for-preserving-three-tier-co-op-credit-structure/
[2] https://www.business-standard.com/industry/banking/new-national-cooperative-policy-proposes-apex-bank-to-boost-rural-credit-125072501228_1.html
[3] https://www.business-standard.com/amp/industry/banking/new-national-cooperative-policy-proposes-apex-bank-to-boost-rural-credit-125072501228_1.html