The rural financial system in the country needs a strong and efficient credit delivery system, capable of taking care of the expanding and diverse credit needs for agriculture and rural development. Rural Cooperative Banks (RCBs) and Regional Rural Banks (RRBs) are 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 (RFIs) since the inception of NABARD. It has been initiating various projects and programmes to encourage development of a strong rural financial eco-system, in a sustainable manner. The Department undertakes these initiatives to improve the health of RCBs and RRBs in association with Government of India (GoI), Reserve Bank of India (RBI) and State Governments and Sponsor Banks for RRBs.
2. Core Functions of the Department
A. Development of RCBs:
- Policy support to GoI in matters relating to RCBs
- Review and monitoring of functioning of RCBs through systematic data collection, analysis of data and highlighting issues that require redressal through reforms
- Assisting GoI in taking remedial measures to improve the health of weak banks through various reform measures such as Recapitalisation / Restructuring and other reforms
- Preparation of Policy notes for GoI, RBI, Parliamentary Committees and various other agencies
- Review of operations of Short-term (ST) & Long-term (LT) rural cooperatives
- Support through Cooperative Development Fund (CDF) for RCBs, Cooperative Training Institutes (CTIs) for Capacity Building of Human Resources, Special package for development of Credit Cooperatives in North Eastern States, Sikkim and Andaman and Nicobar Islands; Infrastructure Support to Primary Agricultural Societies (PACS), Establishment of PACS Development Cells in RCBs, etc and conducting capacity building measures through NABARD’s training establishments at Lucknow, Mangalore and Bolpur and Centre for Professional Excellence for Cooperatives (CPEC).
- Scheme to support Fraud Risk Management Software through CDF in few StCBs/DCCBs is formulated for implementation on a pilot basis.
- Coordination with RCBs, State Governments, GoI and other stake holders on matters relating to Cooperatives
- Convening of periodical meets of Registrars of Cooperative Societies (RCS) and CEOs of State Cooperative Banks (StCBs) and State Cooperative Agriculture and Rural Development Banks (SCARDBs)
- Publication of statistical statements relating to performance of RCBs
- Support to RCBs in streamlining procedures, upgrading technology and human resource development
- Professionalization of senior and middle level executives
- Providing financial support for training institutes of Cooperative banks under the Scheme of Financial Assistance for Training of Cooperative Banks Personnel (SOFTCOB)
- Conduct of Organisation Development Intervention (ODI) programmes through reputed training institutes like Bankers Institute of Rural Development (BIRD), Lucknow / Mangalore / Bolpur, Regional Offices of NABARD, etc.
- Providing accreditation to CooperativeTraining Institutes through Centre for Professional Excellence in Co-operatives (C-PEC) established in BIRD, Lucknow
B. Development of Regional Rural Banks
- Review the performance of RRBs on half-yearly basis
- Dealing with matters relating to recapitalization of RRBs
- 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 statistical publications on RRBs and conduct of Studies
- Support to various Committees
- 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 and policy matters of RRBs
- Coordinating the recruitment process in RRBs through Institute of Banking Personnel Selection (IBPS) & Common Written Examination (CWE)
- Advising GoI on issues relating to amendment of Appointments and Promotional Rules (APPR) and Service Regulations.
- Monitoring implementation of Pension Scheme in RRBs as per directions of GOI.
- Conducting Joint Consultative Committee Meetings
3. Broad achievements of the Department at a national level
A. PACS Development Cell (PDC)
PACS Development Cells (PDCs) have been created in RCBs to support PACS in business diversification through guidance in preparing Business Development Plans, capacity building and develop new models of business for PACS. As on 31.03.2020, NABARD supported 94 PDCs involving 2,198 PACS operating in 21 States.
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, Long Term Structures of co-operative credit and RRBs 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 RBI.
C. Recapitalisation of RRBs
NABARD has made an assessment for recapitalisation of RRBs over a period of 5 years keeping in view the anticipated internal accrual to capital through profit/loss and amortisation of pension liability. Based on the assessment made by NABARD, the recapitalization assistance will be provided by GoI, State Govt. and Sponsor Banks to RRBs for meting out CRAR level at 9% stipulated by RBI.
D. 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 the Task Force 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. Common Accounting System (CAS) and Management Information System (MIS) was introduced in PACS as part of the package.
D. Monitoring of Progress & MIS
The department regularly monitors the health of RFIs through ENSURE, an online platform for submission of data by RCBs and RRBs.
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:
i. To support the efforts of the ground level cooperative credit institutions, viz, PACS and weak RCBs, on selective basis in mobilising resources
ii. 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
iii. Building up of better Management Information System (MIS)
iv. Conduct of special studies for improving functional efficiency
During the year 2019-20, Rs.17.90 crore has been disbursed under CDF (cumulatively, Rs. 210.78 crore) for various promotional programmes conducted by different tiers of both Short Term and Long Term Cooperative Credit Structure.
(B) Centre for Professional Excellence in Cooperatives (C-PEC)
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 in banking and delivery of financial services.
As on 31 March 2020, C-PEC has a total membership of 8,486 including 52 CTIs, 254 DCCBs, 28 StCBs, 5587 PACS and 2565 individuals.
Shri N. P. Mohpatra
Chief General Manager,
Institutional Development Department,
Plot No.C-24/'G', Bandra-Kurla Complex, Post Box 8121
Bandra (E), Mumbai-400 051