In order to strengthen Co-operative Credit Institutions both in Short Term and Long Term Structures as viable units on a sustainable basis, NABARD had introduced a mechanism of DAP/MoU aiming at institution specific measures in 1994-95. The performance obligations arising out of DAP formed the basis of the Memorandum of Understanding (MoU) between stake holders. While the State level MoUs are executed among the Apex Banks, State Government and NABARD, district-level MoUs are entered into between the Apex Banks and District level DCCBs/PCARDBs. The co-operative banks, throughout the country had prepared the base DAPs and executed the base level MoUs for 5 years terminating March 2000. The second round of DAPs, and MoUs covered the period 2000-01 to 2002-03 which was extended by one more year i.e. up to March 2004. Since then the base-level DAP/MoU covered a larger period of 3 to 5 years. The third phase of DAP/MoU started from the year 2004-05 for a period of 3 years. During the third phase of DAP/MoU covering the period 2004-05 - 2006-07 for the first time PACS have been introduced to planning process. They are required to prepare DAP and enter into an understanding with the branch of DCCB.
Based on the feedback received from the constituent co-operative banks, it was decided to extend the exercise to its fourth phase covering the period from 2007 to 2012 so as to co-terminate with XIth five-year plan.
The mechanism of DAP/MoU has helped in building appreciation and awareness for strategic planning facilitating, in turn, sustainable viability at all levels. The feedback received indicates that there was positive impact on the performance of banks as a result of introduction of DAP/MoU through reduction of CoM and cost of resources. The DAP planning process, as an internal strategy for corporate planning, had facilitated in creating an awareness in the cooperative banking structure and RRBs about the need for strategic planning for corporate success.