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 of the rural populace. Rural Cooperative Banks (RCBs) and Regional Rural Banks (RRBs) are the two important institutions involved in delivery of rural credit.

• The 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. However, purveying of credit, in an effective way, can happen only when institutions purveying credit are financially strong and stable. Therefore, it is the endeavour of IDD to focus on institutional strengthening of RCBs and RRBs.
• The department approaches the institutional strengthening in an integrated and holistic manner. It undertakes 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 of RRBs.

Functions of the Department

A. Institutional Strengthening of Rural Cooperative Banks (RCBs)

a. Development Initiatives:

• 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, J&K, Sikkim and Andaman & Nicobar Islands; CDF-Scheme to provide Stimulus Grant Support for PACS Computerisation.
• CDF-Support for setting up Business Diversification & Product Innovation (BDPI) Cells in Rural Cooperative Banks (RCBs).
• CDF Grant Support to undertake various promotional measures for transforming PACS as MSCs.
• CDF-Scheme on Extension of Grant Support for Publications to Rural Credit Cooperative Institutions.
• 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.

b. HR Initiatives:

• 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).
• Providing accreditation to Cooperative Training Institutes through Centre for Professional Excellence in Co-operatives (C-PEC) established in BIRD, Lucknow.
• Providing accreditation to Cooperative Training Institutes through Centre for Professional Excellence in Co-operatives (C-PEC) established in BIRD, Lucknow
• Developing and implementing Corporate Governance Index Return for putting-in place good governance in Rural Cooperative Banks (RCBs).
• Engagement of Cooperative Interns for strengthening and deepening the cooperative movement, thus, enabling professional graduates to understand cooperatives in a practical environment.
• Conduct of Organisation Development Intervention (ODI) programmes through reputed training institutes.

B. Institutional Strengthening of Regional Rural Banks (RRBs)

a. Development Initiatives:

• Review the performance of RRBs on half-yearly basis.
• Dealing with matters relating to recapitalization of RRBs.
• Providing Statutory Auditors panel to RRBs.
• Providing guidance to the Government on the matters relating to amendment of RRB Act, 1976.
• 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.

b. HR Initiatives:

• 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) and 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.

I. Programmes of the Department for RFIs

Cooperative Development Fund (CDF)

CDF was established following a decision taken by the Board of Directors of NABARD in its 69th meeting held on 02 February 1993 under the provisions of section 45 of NABARD Act, 1981 with an initial corpus of Rs10.00 crore. Thereafter, the corpus of the fund has been augmented through contribution from NABARD’s annual profit.

B. Central Sector Scheme for Computerisation of 63000 PACS

NABARD is the implementing agency of the centrally sponsored project of Ministry of Cooperation, GoI for computerization of 63000 functional PACS in the country. Its a Rs 2516 cr project spread over 5 years with the motive of having a ERP / a common national level software for PACS which is able to present the national level data for these PACS, which captures all the multi dimensional activities of PACS – credit or non credit and convert them into vibrant Multi purpose service centres.

Objectives:

• To support the efforts of the ground level cooperative credit institutions, viz., PACS and weak RCBs, 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 2023-24, Rs33.28 crore has been disbursed under CDF cumulative Rs326.93 crore as on 31.03.2024 for various promotional programmes conducted for different tiers of both Short Term and Long Term Cooperative Credit Structure.

a. Scheme of Financial Assistance for Training of Cooperative Banks Personnel (SOFTCOB)

A major portion of the assistance under CDF goes towards training related activities through SOFTCOB. During 2021-22, 2022-23 and 2023-24, the Cooperative Training Institutions (CTIs) have conducted more than 4000 programmes covering more than one lakh participants from different tiers of the cooperatives.

• Since 2020-21, conducting programmes through online mode has been continued.
• An amount of Rs14.80 crore was disbursed to CTIs across the country during the year 2023-24.

b. PACS as MSC

• The Department of Refinance, NABARD, introduced Special Refinance Facility for transforming all the potential PACS as Multi Service Centres (MSCs) over a period of 3 years commencing from FY 2020-21, by providing concessional refinance to StCBs at 3% to support PACS to create quality infrastructure (capital assets) and increase their business portfolio in tune with needs of members.
• Under this line of credit, NABARD has envisaged transformation of 35,000 PACS.

c. Business Diversification and Product Innovation Cells (BDPICs) in Rural Cooperative Banks (RCBs)

• NABARD introduced a scheme in the year 2020 to support, encourage and incentivize the efforts by RCBs for setting up Business Diversification & Product Innovation Cells (BDPICs) in StCBs for giving impetus for product innovation and business diversification.
• The cumulative assistance sanctioned as on 31.03.2024 under BDPIC stood at Rs1386.00 lakh.
• The disbursement made during the year 2023-24 was Rs145.92 lakh and cumulative disbursement as on 31.03.2024 stood at Rs328.35 lakh.

d. Strengthening of Complaint / Grievance Redressal Mechanism in Rural Cooperative Banks

• Keeping in view the need for time bound and speedy redressal of Complaints/Grievances, the existing mechanism for complaints/grievance redressal has been further strengthened by NABARD. A circular in this regard has been issued to all RCBs on 06 August 2024.
• The Turn Around Time (TAT) for redressal of complaints has been reduced in line with the extant TAT stipulated under CPGRAMS and Reserve Bank Integrated Ombudsman scheme 2021 (RB-IOS 2021). Accordingly, the no. of days for addressing/resolving the grievance/complaints is 30 days now.
• A portal for uploading complaints by RCBs is being developed internally, by the Software Factory situated in NABARD.

e. Centre for Professional Excellence in Cooperatives (C-PEC)

• NABARD, in collaboration with GIZ, established the ‘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.

f. Monitoring of Progress and MIS

The department regularly monitors the health of RFIs through ENSURE, an online platform for submission of data by RCBs and RRBs.

II. Major initiatives of the Department in association with the GoI

a. PACS as Common Service Centres (CSC)

• A Memorandum of Understanding (MoU) has been signed between Ministry of Cooperation, Ministry of Electronics and Information Technology, NABARD and CSC e-Governance Services India Limited for providing more than 300 e-services such as banking, insurance, Aadhar enrolment/ updation, health services, PAN card and IRCTC/ Bus/ Air ticket, etc. through PACS.

So far, over 35,000 PACS have started providing CSC services to rural citizens which will also result in increase in income of these PACS.

b. Engagement of Cooperative Interns for strengthening the Cooperatives

• NABARD is implementing a scheme to ensure that benefits of initiatives initiated by Ministry of Cooperation, Government of India reach the grass root level, strengthen cooperative based economic model and ensure necessary capacity building to the cooperatives. Therefore, it has been decided that all State Cooperative Banks (StCBs) and District Cooperative Central Banks (DCCBs) would hire young professionals, viz., ‘Cooperative Intern’, initially for three years, in which each intern will be hired for one year.

Objectives:

• i. To deepen the Cooperative Movement till grassroots level.
• ii. Enable the professional graduates to learn the context and practical working of cooperatives.
• iii. To expand pool of experienced cooperative professionals. Interns will be responsible for solving day to day problems faced by PACS in computerization, preparation of business plans, projects, financing issues, various approvals etc.

c. Central Sector Scheme for Computerisation of PACS

• NABARD is the implementing agency of the centrally sponsored project of Ministry of Cooperation, GoI for computerization of 63000 functional PACS in the country.
• It is a Rs2516 crore project spread over 5 years with the motive of having an ERP/a common national level software for PACS which is able to present the national level data for these PACS, which captures all the multi-dimensional activities of PACS – credit or non-credit and converts them into vibrant multipurpose service centres.

d. Project on Cooperation amongst Cooperatives

To promote the spirit of Cooperation among Cooperatives, a pilot project was launched by Hon’ble Union Minister for Home and Cooperation on the Foundation Day of NABARD, i.e. 12 July 2023.

• The pilot project was launched in Banaskantha and Panchmahal DCCBs of Gujarat to promote all the financial transactions of primary dairy cooperative societies and other cooperative bodies with cooperative banks to strengthen and make the cooperative sector self-reliant (Aatma Nirbhar).
• As part of the project, primary dairy societies were provided with micro ATMs for promoting digital transactions at doorstop, Rupay Kisan Credit Cards were issued to dairy farmers whose bank accounts were also opened with DCCBs and awareness about the movement was created through financial literacy camps.
• The pilot project is now being implemented in all districts of Gujarat from 15 January 2024 after it was launched by Hon’ble Chief Minister of Gujarat.
• The project is being scaled up and launched at a national level.

e. Formation of DCCBs in uncovered districts

• The Ministry of Cooperation has taken up an initiative to cover every district in the country with a viable DCCB and a viable District Milk Producers’ Union.
• NABARD has, therefore, prepared a scheme/action plan for opening of new DCCBs in uncovered districts for complete coverage by cooperative banks, keeping in view the legal/regulatory requirements.

f. Central Plan for Strengthening Cooperative movement in the country – Formation of 2.0 lakh new Multipurpose PACS/Dairy/Fishery Cooperative Societies in all the uncovered Panchayats/Villages

• On 15 February 2023, the Union Cabinet approved a central plan for strengthening cooperative movement in the country and deepening its reach up to the grassroots.
• Under the plan, it is envisaged to establish 2.0 lakh new Multipurpose PACS/ Dairy/ Fishery Cooperative Societies in five years in all the uncovered and under-served Panchayats/Villages in the country to strengthen the cooperative movement and deepen its reach to the grassroots.
• NABARD, NDDB, NFDB will be implementing formation of M-PACS, Dairy and Fisheries’ societies respectively. They would be assisted by State Co-operation Dept., StCBs, DCCBs, PACS, State Agencies, Federations etc. The overall direction and guidance would be provided by Ministry of Cooperation, Govt. of India.
• NABARD will be responsible for setting up new M-PACS in 17300 uncovered GPs and formation of more than 5000 new M-PACS in the place of existing dormant PACS. Based on identification of underserved Gram Panchayats (GPs), three times of the above target will be allocated to StCBs and DCCBs by NABARD in coordination with State Governments. Further, NDDB will setup 1,03,000 Multi-purpose Primary Dairy Co-operative Societies (PDCS)/M-PACS wherein it will form 53000 new M-PDCS/M-PACS and strengthen 50000 existing M-PDCS. Also, NFDB will be setting up 11,500 Fishery Co-operative Societies including 6000 new cooperatives and strengthening of 5500 existing fishery societies. National Cooperative Federations and State /UT Governments would also take steps for formation of new M-PACS.
• NABARD has prepared an Action Plan for formation of approx. 70,000 new M-PACS (in uncovered GPs + in place of dormant PACS).
• The Action plan would be implemented in two phases, viz., Phase I to cover 23,400 M-PACS in FY 24 and FY 25 and Phase II to cover 47,000 M-PACS in next 3 years.

h. Study on ‘Reforms, Restructuring and Innovations in ARDBs

• The Ministry of Cooperation, Government of India requested NABARD to conduct a Study on ‘Reforms, Restructuring and Innovations in ARDBs’.
• NABARD has engaged NABCONS to conduct the study and the report has been submitted to MoC.

i. Recapitalisation of RRBs

• NABARD makes an assessment for recapitalisation of RRBs annually for those RRBs which do not comply with mandatory requirement of 9% CRAR, keeping in view the anticipated internal accrual to capital through profit/loss.
• Based on the assessment made by NABARD, the recapitalization assistance is provided by GoI, State Govt. and Sponsor Banks to RRBs for meting out CRAR level at 9% stipulated by RBI. Rs10,890 crore capital infusion has been sanctioned to 22 RRBs to be infused in 2 years viz. during FY 2021-22 and FY 2022-23, shared by the Central Government, State Government, and the Sponsor Banks in the proportion of 50%, 15% and 35% respectively.
• While approving the first dose of capital infusion for RRBs during FY 2021-22, the Government of India had indicated that subsequent recapitalisation support of 25% would be provided to the RRBs by 31 March 2023, upon demonstrable improvement in the operational and governance reforms as per the Viability Plans.
• The viability plan aims to implement comprehensive reforms in functioning of RRBs in spheres of business diversification, NPA management, cost rationalisation, technology adoption, corporate governance, HR development, etc. NABARD will be playing an anchor role in turning around the RRBs by providing centralised services in the fields of technology adoption, capacity building, product innovation etc.
• All 43 RRBs, including the recapitalized RRBs, are implementing their Viability Plans, for improving their financial strength and operational efficiency, including technology adoption.
• The impact of the recapitalization is visible in the financial results of the banks.
• RRBs have posted the highest ever consolidated net profit of Rs7,571 crore during FY 2023-24 and
• their consolidated CRAR was at an all-time high of 14.2% as on 31 March 2024.
• The asset quality measured by GNPA (Gross Non-Performing Assets) at 6.1% was the lowest in the previous 10 years.
• Credit expansion led to an increase in consolidated CD ratio to 71.4%, which was the highest in 33 years.
• The pace of technology adoption has increased as more RRBs have started rolling out digital services to their customers. Also, RRBs have shown renewed interest in financial inclusion activities as their share in the implementation of flagship schemes has increased during the year.
• A dashboard, ‘RRB, has been developed by NABARD jointly with the DFS, GoI, through an external agency for a continuous on-line monitoring of the financial performance of the RRBs under the ‘Viability Plans’ and a comprehensive monitoring of their overall financial performance under different parameters.

Contact Information

Shri Subrat K Nanda


Chief General Manager
Institutional Development Department,
NABARD
Plot No.C-24/'G', Bandra-Kurla Complex, Post Box 8121
Bandra (E), Mumbai-400 051
Tel: 022-68120044

E-mail Address: idd@nabard.org

 

Information under RTI - Section 4(1)(b)