(B) Long Term Credit Structure
Long Term Cooperative Credit Structure consists of Apex Bank viz., Tamil Nadu Cooperative State Agriculture and Rural Development Bank, Chennai and 180 Primary Cooperative Agriculture and Rural Development Banks at taluk / block levels. These credit institutions are providing investment credit to the members for activities like minor irrigation, horticulture, plantation crops and other agriculture and allied sectors.
(i) Tamil Nadu Cooperative State Agriculture & Rural Development Bank (TNCSARDB)
The Tamil Nadu Cooperative State Agriculture and Rural Development Bank raises the funds necessary for its lending by floating ordinary and special development debentures.
The Tamil Nadu Cooperative State Agriculture and Rural Development Bank is the apex institution for all primary agriculture and rural development banks constituted for issuing long term loans for the purpose of developing agriculture and allied activities. The bank organized in 1929 has now 20 regional offices each covering one or two districts. The primary agriculture and rural development banks located at taluk and block levels throughout the state are affiliated to the state agriculture and rural development bank.
The main objective of the Tamil Nadu Cooperative State Agriculture and Rural Development bank is to finance primary agriculture and rural development banks. The bank undertakes the following functions to achieve the above objectives:-
(a) Floatation of Debentures;
(b) Receiving Deposits;
(c) Grant of loans to primary cooperative agriculture and rural development banks for purposes approved by the National Bank for Agricultural and Rural Development and Registrar of Cooperative Societies;
(d) To function as the agent of any cooperative bank subject to such conditions as the Registrar may specify;
(e) To develop, assist and coordinate the work of affiliated primary cooperative agriculture and rural development banks.
The bank issues long term and medium term loans towards agricultural and allied activities like construction of godowns, cattle shed, farm house, purchase of lands etc., and for minor irrigation purposes like construction of new wells, deepening of existing wells etc., In addition, long term loans are also sanctioned for animal husbandry, fisheries, plantation, farm mechanization, non-farm sector and other non-minor irrigation schemes.
The state agriculture and rural development bank floats two types of debentures to raise funds required for issuing loans for developmental activities:
(i) Special development debentures subscribed to by National Bank for Agricultural and Rural Development and the Central and the State Government.
(ii) Ordinary debentures subscribed to by State Government, Government of India and other institutional investors.
(ii) Primary Cooperative Agriculture and Rural Development Banks (PCARDB)
There are 180 Primary Cooperative Agriculture and Rural Development Banks at taluk/block levels.The primary cooperative agriculture and rural development banks provide long term loan assistance to farmers with the period of repayment ranging from 5 to 15 years. They provide credit for developmental purposes like minor irrigation, cultivation of plantation crops and for diversified purposes like poultry, dairying and sericulture on schematic basis. They get requisite financial assistance from the Tamil Nadu Cooperative State Agriculture and Rural Development Bank. At present 181 primary cooperative agriculture and rural development banks are functioning in the state.
In order to widen their scope of lending to compete with other financial agencies, the primary cooperative agriculture and rural development banks have been permitted to finance artisans, craftmen and small scale entrepreneurs. They have also been permitted to issue loans to small road transport operators in rural areas for purchase of goods carriers and passenger vehicles. As a result, during 2007-08, the Primary Cooperative Agriculture and Rural Development Banks have again started lending for the Non-Farm Sector including Jewel Loans.
The Government will make all efforts to revive them by arranging refinance from National Bank for Agriculture and Rural Development during 2008-09. Activities like horticulture, organic farming, hi-tech farming, precision farming, micro irrigation project based activities like floriculture, cultivation of medicinal plants, plantations in waste land and farm mechanization will be given priority under agricultural investment credit during 2008-09.
The revival package for long term cooperative credit structure based on the recommendations of Prof. A. Vaidyanathan Committee is expected from Government of India soon. In principle, the Government has already agreed to implement the revival package. It is expected that the implementation of this package will help the long term lending structure to wipe out the accumulated loss and to regain its position as the pioneer of agricultural investment credit.
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