The rural financial system in the country calls for a strong and efficient credit delivery system, capable of taking care of the expanding and diverse credit needs of agriculture and rural development. Rural Cooperative Banks and Regional Rural banks are the two important institutions involved in delivery of rural credit.
Institutional Development Department (IDD) has been at the forefront in this direction, engaging directly and indirectly with rural financial institutions since inception of NABARD. It has been initiating projects and other programs which encourage development of a strong rural financial eco-system in a sustainable manner. The Department undertakes these initiatives to improve the health of Co-operative banks and Regional Rural Banks in association with Government of India, RBI and State Governments.
2. Core Functions of the Department
A. Development of Co-Operative Banks:
- Assisting GoI in policy matters relating to Rural Cooperatives
- Monitoring the viability of the Cooperative Banks through systematic data collection and analysis of the same for policy inputs to GoI and RBI
- Assisting GoI in taking remedial measures to improve the health of weak banks through recapitalisation / restructuring and other reform measures
- Preparation of various policy notes for Govt. of India, RBI, Parliamentary Committees and various other agencies
- Review of functioning of Short-term (ST) & Long-term (LT) cooperatives
- Implementation of GOI’s Revival Package for Short-term Rural Cooperative Credit Structure (STCCS)
- Management of Cooperative Development Fund (CDF) and provision of support to cooperatives under CDF for infrastructure development and various other approved activities including assistance to Coop. Training Institutions for training of Coop. Banks & PACS personnel
- Coordination with apex Cooperative Credit Institutions and also State Governments and Govt. of India on matters relating to cooperatives
- Convening of periodical meets of Registrars of Cooperative Societies and CEOs of State Cooperative Banks (StCBs) and State Land Development Banks (SLDBs)
- Publication of statistical statements relating to Cooperative movement in India
- Conduct various special studies relating to Cooperative credit structure
B. Development of Regional Rural Banks
- Help Cooperative Banks in streamlining procedures, upgrading technology and human resource development
- Professionalization of senior and middle level executives of Cooperative banks
- Providing financial support for training institutes of Cooperative banks under the Scheme of Financial Assistance for Training of Cooperative Banks Personnel (SOFTCOB)
- Provide Organisation Development Intervention (ODI) through reputed training institutes like Bankers Institute of Rural Development (BIRD), Lucknow, Regional Offices of NABARD, etc.
- Monitor implementation of Development Action Plans (DAPs) of banks and their fulfilment of obligations under MoUs
- Provide financial assistance to cooperative banks for building improved management information systems, computerisation of operations, development of human resources, etc.
- PACS development by various programmes, formation of PACS Development Cells at CCBs/StCBs and extending financial assistance for HR and Management Development
- Providing support to Centre for Professional Excellence in Co-operatives (C-PEC) established in BIRD, Lucknow
- Review the performance of RRBs on half yearly basis
- Dealing with matters relating to recapitalization of RRBs and raising capital from market
- Providing Statutory Auditors panel to RRBs after GOI approval for conduct of Statutory Audit
- Providing guidance to the Government on the matters relating to amendment of RRB Act
- Dealing with matters relating to Parliamentary Committee and Standing Advisory Committee legislation on HR matters
- Bringing out publication on RRBs
- Monitoring Business Advisory Committee constituted by RRBs
3. Broad achievements of the Department at a national level
A. PACS Development Cell (PDC)
- Committee based appointment of RRB Chairmen
- Appointment and monitoring of Nominee Directors of NABARD on the Board of RRBs
- Guiding the Government on matters relating to recruitment
- Managing the recruitment process in RRBs - Institute of Banking Personnel Selection (IBPS) & Common Written Examination (CWE)
- Dealing with issues relating to amendment of Appointments and Promotional Rules (APPR) and Service Regulations.
- Dealing with Legal cases of HR issues in RRBs
- Dealing with RTI, PQs and VIP references in connection with the staff regulation, APPR etc.
- Conducting Joint Consultative Committee Meetings
PACS Development Cells (PDCs) have been created in DCCBs/StCBs to undertake capacity building and strengthening of PACS. As on 31.03.2016, PDCs functioning in 94 DCCBs have identified 2,198 PACS operating in 20 states to strengthen them through training, handholding, guiding, exposure visits and other suitable interventions. With the help of PDCs, 1,328 PACS have prepared business development plan.
B. Development Action Plan (DAP) / Memorandum of Understanding (MoU)
NABARD had introduced a mechanism of DAP/MoU aiming at institution-specific measures in 1994-95 in order to strengthen Short Term and Long Term Structures of co-operative credit institutions as viable units on a sustainable basis.
In the year 2014-15, new guidelines were issued to all StCBs to reintroduce the preparation of a time-bound and monitorable DAP by all Cooperative Banks for a period of 2 years i.e. 2015-16 and 2016-17. This was also to enable all Cooperative Banks to attain and sustain Capital to Risk Asset Ratio (CRAR) of 7% and 9% by 31 March, 2015 and 31 March, 2017 respectively, as stipulated by the Reserve Bank of India.
At present DAP has been prepared for two years for 2015-16 and 2016-17 by all StCBs and CCBs.
C. GOI's Revival Package for STCCS- Cooperative Revival and Reforms
The Government of India (GoI) appointed a Task Force under the Chairmanship of Prof. A Vaidyanathan in 2004 to analyse the problems faced by the rural cooperative institutions and to suggest an action plan for their revival.
Based on VC-I recommendation, a revival package was announced, by GOI in January 2006 which encompassed:
a. Legal and institutional reforms
b. Measures to improve the quality of management
c. Financial assistance to bring the system to an acceptable level of health.
NABARD was designated as the Implementing Agency for implementing the Revival package recommended by the Task Force in all the states and provided dedicated manpower at the National, State and District level for implementing the Package.
The package had a financial outlay of Rs. 13,596 crore with GoI share of Rs. 9,245.28 crore.
25 States signed the MOU with GOI and NABARD and 23 States implemented the Revival Package.
D. Monitoring of Progress & MIS
The department regularly monitors the health of Rural Financial Institutions (RFIs) through ENSURE, an online platform for submission of data by banks in the Cooperative credit Structure.
4. Ongoing Projects/Schemes:
(A) Cooperative Development Fund (CDF)
CDF was established on the basis of a decision taken by the Board of Directors in its 69th meeting held on 2 February 1993 under the provisions of section 45 of NABARD Act, 1981 with an initial corpus of Rs. 10 crore. Thereafter, the corpus of the fund has been augmented through contribution from NABARD’s annual profit.
The objectives of the CDF are:
(B) Centre for Professional Excellence in Cooperatives (C-PEC)
- To support the efforts of the ground level cooperative credit institutions, viz, Primary Agricultural Credit Society (PACS) and weak District Central Cooperative Banks (DCCB), on selective basis in mobilising resources
- Human Resource Development for achieving better working results and improvement in viability as well as introduction of and improvements in systems and procedures in cooperative credit institutions
- Building up of better Management Information System (MIS)
- Conduct of special studies for improving functional efficiency
- During the year 2015-16, Rs.15.40 crore has been disbursed under CDF (cumulatively, Rs140.66 crore) for various promotional programmes conducted by different tiers of both Short Term and Long Term Coop Credit Structure.
NABARD, in collaboration with GIZ, has established “Centre for Professional Excellence in Cooperatives (C-PEC), in BIRD, Lucknow in the year 2009 for supporting Cooperative Training Institutes (CTIs) in STCCS to impart quality training.
As on 31.03.2016, C-PEC has a total membership of 5,605 including 41 CTIs, 162 DCCBs, 18 StCBs, 4862 PACS and 522 individuals with a total corpus of Rs. 2.18 cr.
Dr U S Saha
Chief General Manager,
Institutional Development Department,
Plot No.C-24/'G', Bandra-Kurla Complex, Post Box 8121
Bandra (E), Mumbai-400 051