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CHAPTER III
ROLE OF PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL
DEVELOPMENT BANKS IN AGRICULTURE DEVELOPMENT IN
KARNATAKA AND PROFILE OF STUDY AREA
INTRODUCTION
In the early years, rural development was considered synonymous with
the growth of agriculture, allied sectors and infrastructural facilities. Over the
years, rural development has emerged as a strategy design to improve the
economic and social life of the rural poor. It involves extending the benefits of
development to the rural areas. The term rural development involves a
process in which the rural society, at large, moves from one step of the
economic ladder to the next, thereby enhancing its social and economic
status. According to S. Gariayappa, rural development involves developing
the rural economy, so as to raise the standard of living of those rural people
who are poor and require upliftment. Lele defines rural development as
“Improving the living standards of the mass of low income population residing
in rural areas and making the process self sustaining”. However rural
development is a process concerned with the improvement of economic,
social and political conditions of mass rural population particularly those who
are below the poverty line. The villages in India have to grow well because of
three reasons: a) About 70% of the population in India and 69% in Karnataka
live in villages and over 40% of them are below the poverty line, b) The most
valuable resources for countries and state economic development are
concentrated in villages but not in a few cities, and c) Each and every village
in the country and the state is a market for goods manufactured either in
urban or semi urban areas as well as agricultural commodities grown in rural
regions.
The role of banks in the process of development is absolute, because
of the fact that they provide one of the most essential inputs, namely credit. In
the process of growth finance is a crucial element. It requires not only
effective mobilization of public savings but also proper deployment of
available scarce resources so as to create conditions for further generation
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and mobilization of resources. It might be rather difficult in the absence of well
designed and integrated institutional apparatus. Thus development as Gurley
and Shaw assert involves finance as well as goods. Capital plays a significant
role in the theory of development. Capital plays a significant role in the theory
of development. Capital is regarded by Kindleberger not only as central to the
process of development but also as strategic. Economic development
requires and depends on inputs of capital. The process of development
involves savings to create a surplus for the capital investment. In the logistic
of growth mechanism, the role of banks was recognized long back as in an
under-developed economy. R.M. Saksena who recognized the importance of
bank finance for the economic development of a country, observes that the
banks are conceived as instrument for increasing the rate of growth of the
economy so fast that it surpasses the rate of growth of population, increase
per capita real income and help the economy leap forward into the phase of
self generating and self sustained growth. In the perspective of the history of
economic developed countries, banking was necessary for development of
developed countries, banking was necessary for development and not merely
a pre-requisite. Banking as a tool for development is a multipurpose tool and
depending upon the value system of the society, its uses are capable of vide
variations. In the modern economy bankers are to be considered not merely
as dealers in money but more realistically leaders in development. Similarly
banks are not just the store house of the country‟s wealth but are reservoirs of
resources necessary for economic development.
However in a developing country like India, scarcity of financial
resources is admittedly one of the constraints for accelerating the pace of
economic growth. Hence an efficient and responsive banking system is of
utmost importance. The contribution of banks to economic development is
remarkable in terms of mobilization of deposits, expansion of branches and
advancement of credit etc. in rural as well as urban areas.
In rural areas about 10% of the population has surplus savings, but
they are not prepared to save with banks as they do not have the knowledge
of banking and they are not convinced about the security of their deposits.
Thus the rural savings has to be collected tactfully and carefully. However, as
45
majority of the rural people are poor, it is not possible by them to save first a
certain amount of deposits and then undertake investment in land or allied
activities. Thus, it would be more appropriate first to help them with a loan and
invest in their familiar sector, so as to enable them to raise their productivity
and income. The bank then recover loan from the increased income. Any way
banks are to deploy credit mainly in productive fields so that income of
loaners will increase beyond subsistence level and contribute something more
to the savings. The additional income of households due to bank loan
investment may also improve the deposit potentially of the banks in rural
areas.
EVOLUTION OF AGRICULTURE AND RURAL DEVELOPMENT BANKS IN
INDIA
In India till the advent of 20th century there were no institutional agencies for
catering credit to agriculturist. Over 90% of farmers were mainly dependent on
private money lenders and other non–institutional agencies for capital for their
agricultural operations and social obligations. The non-institutional agencies
used to exploit the farmers in 3 ways namely – a) Charged exorbitant rate of
interest on loan amount, b) Forced the farmers to sell their produce at un
remunerative prices during harvest season for recovering loan and c) Forced
agriculturist to sell their land to them (money lenders) at lower prices for
recovering the loan. Then agriculture was not so profitable occupation to earn
and to liquidate old debts. The indebtedness of the farmers went on
increasing and reached an alarming level by the end of 19th century. The
establishment of regular law courts in the 19th century gave an easy handle to
creditors to pursue debtors to the bitterest end and exact the last pie. To help
the agriculturist under such circumstances several schemes for organizing
agricultural banks and similar institutions, the one by Sir William wedderburn
in 1882 were submitted to government. But none of them found acceptance at
the hand of the Government. Government, however, set up their own
machinery for advancing loans to agriculturist, and with that end in view the
Land Improvement Loans Act and the Agriculturists Loans Act were passed in
1883 and 1884 respectively. These were only enabling legislation and
empowered state Governments to advance loans from state funds and
46
invested them with powers to frame rules governing the issue of such loans.
Under the Land Improvement Loans Act, long-term loans for improvement
were granted, while under the Agriculturists Loans Act, short-term loans were
given for current agricultural needs. The actual working of the Acts shows that
loans under the Agriculturists Loans Act were advanced during times of
emergency only or on the occurrence of natural calamities like famine, flood,
etc., while the facilities offered under the Land Improvement Loans Act were
not availed by the agriculturists to any appreciable extent due to their
ignorance, dilatory way in which applications for loans were handled by the
Revenue Departments through which loans were administered and general
apathy of the farmers to deal with governmental agencies. Further, the loans
for redemption of prior debts for which long-term loans were largely required
by farmers were excluded from the purview of the Act in most of the states
under the rules framed by them.
With the introduction of the Co-operative Movement in 1904 it was felt
that it would be in a position to provide both the long-term and short-term
credit needs of the farmers. Credit societies were permitted to advance long
term loans along with short-term loans to the extent prescribed by the
Registrar for each society or class of societies. However, it was soon realized
that ordinary credit societies were entirely unsuited to undertake this type of
business. Primary societies depended for their working capital on central
banks, but these banks were able to attract short term deposits only. It was
not possible for societies to advance long- term loans with short term deposits
and whenever they did so, they courted only trouble and ruin. Moreover,
primary societies were not in a position to assess the values of real estate‟s
correctly or examine their titles and were not in a position to meet their outside
obligation when borrowers were unable to pay. Wholesale eviction of
borrowers from lands, forced sales, etc, brought only more troubles in their
train, as in a period of depression no buyers could be found for the properties
purchased by societies. Thoughtful co-operators and administrators,
therefore, came to the wise conclusion that separate institutions were
necessary for the dispensation of long- term credit.
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ALL INDIA RURAL CREDIT SURVEY REPORT (1954)
The All India Rural Credit Survey Committee (1954) appreciated the
role of land mortgage banks in the development of agriculture
The more important of the recommendations of the Committee in respect land
mortgage banks are summarized below:
(i) Each state should have a central mortgage bank. The state governments
should review their tenure and tenancy laws and take steps to eliminate such
features in them as, without being essential to policy, are hindrance to the
development of land mortgage banking. Where land reforms necessitate
restrictions on the mortgaging of title, the scope of such restrictions should be
the minimum necessary. Further, any special procedure for registration of
mortgages under the land reform acts (and the general procedure for
registration of mortgages of land) should be made simple, cheap and
expeditious. Similarly the provisions of the law should ensure that title passed
is as clear and as secure as possible.
(ii) Central land mortgage banks should issue debentures for varying periods
in conformity with the purpose of the loans. Further, to fit in with the
requirements of rural investment, central land mortgage banks should float
Rural Debentures. The Reserve Bank of India and the State Bank of India
should take positive steps for the creation of an effective market for the
debentures of the land mortgage banks. There should be provision for issue
of special development debentures which may be purchased in whole or part
by the Reserve Bank of India from out of its National Agricultural Credit (Long-
term Operations) Fund.
(iii) The government should contribute to the share capital of central land
mortgage banks at least up to 51 percent to enable them to borrow and to
lend adequately.
(iv) Land mortgage banks should orient their operations to production and
should give first priority to applications for loans for improvement, reclamation
and development of land, purchase of agricultural machinery and equipment
and other productive purposes. The banks should evolve a machinery for
achieving co-ordination of credit with planned agricultural development,
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assessment of technical soundness of projects and verification of use of
credit. There should be proper arrangements for supervision of the utilization
of the loans granted by the banks.
(v) Apart from the different forms of state assistance already mentioned, there
should be:
(a) provision of staff for valuation of land, examination of schemes for land
improvement, assessing technical soundness, etc.,
(b) provision of overdraft facilities,
(c) exemption of stamp duty, registration fee, etc.,
(d) special legislation for facilitating working of land mortgage banks and
(e) special assistance to land mortgage banks in the underdeveloped areas
with reference to their administrative costs in order to enable them to function
on economic basis.
SECOND STAGE: LAND DEVELOPMENT BANKING
The second stage began when the All India Rural credit Survey
Committee in 1954 recommended that the Banks should concentrate on
providing long – term loans for productive purposes in the farm sector in the
context of planned development envisaged under the five year plan beginning
from 1951.
In pursuance of the recommendations of the All India Rural Credit
survey Committee (1954), Central Land Development Banks were organized
in all the major states of the country and also in some of the smaller states
and union territories. As on 30-06-1973, there were central Land Development
Banks in 18 states and 1 union territory out of the total of 21 states and 9
union territories. In addition there were separate land development banking
sections in the state co-operative banks of 2 union territories. The number of
central land development banks increased from 10 in 1953-54 to 19 in 1972-
73. During the same period membership of CLDB increased from 30,000 to
18,40,000, owned funds from `103.40 lakhs to `9774.47 lakhs, deposits and
other borrowings from `144.13 lakhs to `3830.30 lakhs, debentures
outstanding from `1145.04 lakhs to `101504.15 lakhs, working capital from
49
`1392.66 lakhs to `120207.30 lakhs, fresh advances from `192.40 lakhs to
`17143.06 lakhs, recoveries from `99.49 lakhs to `4901.62 lakhs, loan
outstanding from `1035.16 lakhs to `84920.53 lakhs and over dues from
`31.46 to `4071.47 lakhs.
The number of primary Land Development Banks increased from 304
in 1953-54 to 855 in 1972-73. In the same period the membership increased
from 2,65,000 to 21,83,000, owned funds from `96.25 lakhs to `4259.32
lakhs, deposits and other borrowings from `851.20 lakhs to `43,980.35 lakhs,
working capital `955.26 lakhs to `51,976.47 lakhs, fresh advances `140.50
lakhs to `10,162.97 lakhs, recoveries `60.59 lakhs, to `4473.25 lakhs, loan
outstanding `878 to `44,681.89 lakhs, and over dues from `16.06 lakhs, to
`1751.71 lakhs.
AGRICULTURAL REFINANCE CORPORATION AND LAND
DEVELOPMENT BANKS
All India Rural credit Survey Committee (1954), the committee on Co-
operative Credit (1960) and RBI‟s erstwhile standing Advisory Committee on
Agricultural Credit (1961) stressed the Central Government and RBI for the
establishment of an institution for stimulating long term investment in irrigated
belts and community development project area. They felt that the existing
institutions could not provide finance for schemes of land development under
the Command Areas of Major and Minor Irrigation projects and Schemes. As
a result of it the Government of India and RBI took initiative and a bill was
placed and passed in the Parliament to that effect and institution came into
existence on lst July 1963. This Corporation gave a fillip to the financing
operations of LDBS as it was the major beneficiary.
NABARD
National Bank for Agriculture and Rural Development (NABARD) is an
apex development bank in India having headquarters based in
Mumbai (Maharashtra) and other branches are all over the country. The
Committee to Review Arrangements for Institutional Credit for Agriculture and
Rural Development (CRAFICARD), set up by the Reserve Bank of India (RBI)
under the Chairmanship of Shri B. Sivaraman, conceived and recommended
50
the establishment of the National Bank for Agriculture and Rural Development
(NABARD). It was established on 12 July 1982 by a special act by the
parliament and its main focus was to uplift rural India by increasing the credit
flow for elevation of agriculture & rural nonfarm sector and completed its 25
years on 12 July 2007. It has been accredited with "matters concerning
policy, planning and operations in the field of credit for agriculture and other
economic activities in rural areas in India". RBI sold its stake in NABARD to
the Government of India, which now holds 99% stake. NABARD is active in
developing financial inclusion policy and is a member of the Alliance for
Financial Inclusion.
HISTORY OF NABARD
NABARD was established on the recommendations of Shivaraman
Committee, by an act of Parliament on 12 July 1982 to implement the National
Bank for Agriculture and Rural Development Act 1981. It replaced the
Agricultural Credit Department (ACD) and Rural Planning and Credit Cell
(RPCC) of Reserve Bank of India, and Agricultural Refinance and
Development Corporation (ARDC). It is one of the premier agencies to
provide credit in rural areas. Nabard is India's specialised bank.
ROLE OF NABARD
NABARD is the apex institution in the country which looks after the
development of the cottage industry, small industry and village industry, and
other rural industries. NABARD also reaches out to allied economies and
supports and promotes integrated development. And to help NABARD
discharge its duty, it has been given certain roles as follows:
Serves as an apex financing agency for the institutions providing
investment and production credit for promoting the various
developmental activities in rural areas
Takes measures towards institution building for improving absorptive
capacity of the credit delivery system, including monitoring, formulation
of rehabilitation schemes, restructuring of credit institutions, training of
personnel, etc.
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Co-ordinates the rural financing activities of all institutions engaged in
developmental work at the field level and maintains liaison
with Government of India, State Governments, Reserve Bank of
India (RBI) and other national level institutions concerned with policy
formulation
Undertakes monitoring and evaluation of projects refinanced by it.
NABARD refinances the financial institutions which finances the rural
sector.
The institutions which help the rural economy, NABARD helps develop.
NABARD also keeps a check on its client institutes.
It regulates the institution which provides financial help to the rural
economy.
It provides training facilities to the institutions working the field of rural
upliftment.
It regulates the cooperative banks and the RRB‟s, and manages talent
acquisition through IBPS CWE.
NABARD's refinance is available to State Co-operative Agriculture and
Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs),
Regional Rural Banks (RRBs), Commercial Banks (CBs) and other financial
institutions approved by RBI. While the ultimate beneficiaries of investment
credit can be individuals, partnership concerns, companies, State-owned
corporations or co-operative societies, production credit is generally given to
individuals. NABARD has its head office at Mumbai, India.
NABARD operates throughout the country through its 28 Regional Offices
and one Sub-office, located in the capitals of all the states/union territories.
Each Regional Office [RO] has a Chief General Manager [CGMs] as its head,
and the Head office has several Top executives like the Executive
Directors[ED], Managing Directors[MD], and the Chairperson.It has 336
District Offices across the country, one Sub-office at Port Blair and one
special cell at Srinagar. It also has 6 training establishments.
NABARD is also known for its 'SHG Bank Linkage Programme' which
encourages India's banks to lend to self-help groups (SHGs). Because SHGs
are composed mainly of poor women, this has evolved into an important
52
Indian tool for microfinance. As of March 2006 22 lakh SHGs representing 3.3
crore members had to been linked to credit through this programme.
NABARD also has a portfolio of Natural Resource Management
Programmes involving diverse fields like Watershed Development, Tribal
Development and Farm Innovation through dedicated funds set up for the
purpose.
THE THIRD STAGE: AGRICULTURE AND RURAL DEVELOPMENT
BANKING (PCARD Banks)
The third stage Commenced when CRAFICARD recommended in1980
that Agriculture and Rural Development Banks should broad base their
operations and extend Investment Credit for rural development in all its
aspects including non-land based and non-agricultural activities and the
banks in the subsequent years diversified their activities including non-farm
sector financing. As on 31-3-1993 there were 20 Central Agricultural and
Rural Development Banks in the country. Table No.3.1 indicates the progress
made by primary co-operative agriculture and rural development banks in the
country
At the time of independence i.e. on 15th August 1947 there were two
Land Mortgage Banks in West Bengal, viz. Birbhum Land Mortgage Bank and
Burdwan Land Mortgage Bank. With these two Long Term Coop. Credit
Institutions West Bengal started its journey in the long term cooperative credit
sector. The West Bengal Land Mortgage Bank, which is presently called
„The West Bengal State Cooperative Agriculture & Rural Development Bank
Ltd.‟ (WBSCARDB Ltd.) is the Apex Long Term Coop Credit Institution. It
was registered on 07.01.1958 having the Registration No. 1 of 1958. The
Bank started its operation in the same year. The Bank was engaged in
providing long term and medium term credit under farm, non-farm and
housing sector. Gradually, 22 Land Mortgage Banks were established in
different districts / sub-divisions enhancing the total no. to 24. In two districts
viz. Darjeeling and Purulia no Land Mortgage Banks were set up and long
term cooperative credit was routed through the branches of the Apex Bank in
those two districts. The Land Mortgage Bank with the change of time and
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need mutated twice. The first mutation took place during mid-seventies and
Land Mortgage Banks were renamed as „Land Development Banks‟ and
thereafter, during mid-nineties they were again renamed as Cooperative
Agriculture & Rural Development Banks.
Table 3.1
NUMBER OF SOCIETIES AND MEMBERSHIP OF PCARD BANKS
Year Societies Membership (`000 no.)
2000 – 01 754 7269
2001 – 02 770 7254
2002 – 03 765 7443
2003 – 04 729 7334
2004 – 05 758 8377
Source: National Bank for Agriculture and Rural Development
ORGANISATION NETWORK
The organizational structure of the Agricultural and Rural Development
Banks is not uniform throughout the country. Out of the 19 ARDBS, 8 are
purely federal in nature with the state level bank at the apex and affiliated
primary agriculture and rural development banks at the lower level. A similar
number were functioning as unitary model. Of the remaining, three had
adopted a mixed pattern by directly financing their members through branches
in certain areas while in other areas loans were routed through ARDBS. In the
case of one state namely A.P. in pursuance of the Government‟s policy to
have an integrated rural co-operative credit structure, the SCARDBS loans
were issued through the short-term co-operative credit network following the
merger of PCARD Banks with it.
FINANCES OF PCARD BANKS
The major sources of funds for the PCARD Banks for lending are as follows:-
SPECIAL DEVELOPMENT DEBENTURES
These debentures are subscribed to by the NABARD to a major extent
and the central and state government to a lesser extent. These funds
54
raised from this source are used for financing schemes, projects in the
farm/non farm sector approved by the NABARD.
ORDINARY DEBENTURES
These debentures are subscribed to by commercial banks, financial
institutions as well as sister ARDBS. The funds raised are used for
financing projects/schemes in the farm sector.
SPECIAL RURAL HOUSING DEBENTURES
These debentures are subscribed to by the National Housing Bank
exclusively. These are used for advancing loans to farm-members for
construction of houses.
N.C.D.C. BORROWINGS
These funds raised in the form of loans from the National Co-operative
Development Corporation. Funds raised from this source are used for
financing construction of rural godowns, market yard etc.
In addition, the banks generate internal resources to a certain extent in
the form of share capital and reserves which help them to strengthen their
reserves base.
LOAN OPERATION OF PCARD BANKS
The main function of PCARD Banks is to grant loans on the security of
agricultural properties:
Since they grant loans which run for several years, strict rules are laid
down with regard to the security against which they can advance loans.
Generally, these banks restrict their loans to first mortgage of agriculture
property, though in a few cases they may advance loans against the
security of second mortgage as well.
They generally lend up to 50 percent of the value of the security. In order to
assess the value of land against which they lend employ experts who
assess the value of land and are conversant with local conditions. In
assessing the value of land such factors as the amount of land tax paid, the
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rental value of land, gross and net income from the land, sale value of the
land etc., are taken into account.
While granting loans the banks consider not only the value of the security
offered but also examine the repaying capacity of the applicants.
Finally, they are able to lend at fairly low rates of interest and enable the
needy famer to secure funds for long periods.
PCARD Banks provides credit for a variety of purposes such as redemption
of old debts, improvement of land, purchase if costly agriculture equipment,
construction of wells and erection of pumps and so on. At one time, the
redemption of old debts was the most important and, in a sense, the only
purpose for which the farmers approached the land development banks. In
recent years, however, farmers have borrowing from CARDBs mainly for the
purpose of land improvement and development including sinking of wells
(56percent) and purchase of agricultural machinery (30 percent)
IMPORTANCE OF PCARD BANKS
PCARD Banks, originally called Land Mortgage banks under the co-
operative field played a decisive role in the early sixties, seventies and
eighties in helping farmers to acquire capital or productive assets such as
tractors, tillers, pump sets, open wells, lift irrigation and in transforming the
cropping pattern from food to cash crops. Land development banks in the
villages were instrumental in converting agriculture into agri – business.
PCARD Banks have also given loans for non-land based activities subsidiary
to agriculture Viz., poultry, sheep – rearing, dairy, piggery, sericulture, cattle
shed etc.
Finance is one of the most important constraints in the growth of
agriculture. Credit is an essential and important input for development and
production. Agriculture like any other industry also needs capital investment
for development and for realizing higher production. Agriculture being the
most important occupation of the majority of our people, investment in it
assumes more importance in India where 40% of the national income is
derived from agriculture. A dynamic programme of agricultural credit is,
therefore essential for higher level production. For stimulating the tempo of
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agricultural production, it is imperative that farmers must be given all essential
requirements – the modern implements, fertilizers, improved seeds, irrigation
facilities, marketing facilities, etc. and all these things require adequate and
timely credit facilities. Timely availability of credit facilities to the cultivators is
of utmost significance for agricultural development especially in an economy
where majority of the cultivators belong to the category of small/marginal
farmers. In the words of prof. john D. Black of Harvard University, “If we are all
concerned about increasing total agricultural output in shorter term we must
provide credit first and foremost. It will enable them to buy more labour saving
equipment, more seeds and fertilizers.
In developing countries like India the need for credit is more pressing
where farmers are almost without liquid resources, credit on reasonable term
is needed to finance the preparation for their next crop, to enable them to
make a modest start in adopting improved methods of farming, and often to
enable them to avoid selling at a very low prices ruling immediately after the
harvest. One of the very important reasons as to why agricultural productivity
is low in developing countries like India, is that average farmers have hardly
any finance to effect improvement in land. Therefore, these farmers need
capital in right quantity, at right time and at reasonable rate of interest from
financial institutions for improving their agricultural production, income and
social status. However, the technological breakthrough (i.e. Green revolution)
which took place in Indian agriculture during 60s, demanded more credit for
agricultural inputs like fertilizers high yielding variety of seeds, pesticides,
irrigation and other modern implements. Drought in several blocks of the
country over the years has also created heavy demand for credit for the
development of minor irrigation. Since 1969, government has also realized the
significance of credit and began to provide adequate attention to the farmers
through its various credit agencies.
Farmers need short, medium and also long term credit for permanent
agricultural implements. The short and medium term requirements are met by
the commercial banks and other agencies like the co-operatives. In order to
meet the long term needs of the farmers, land development banks were
established all over the country. The LDBS provide long term loans to the
57
farmers on the basis of the security of land. Formerly the banks were meant to
provide long term loans for unproductive purposes like debt redemption but at
the seminar of the chief executive officers of the central Land Development
Banks held in 1969 it was decided that LDBS should advance 90% of the
loans for productive purposes, of which at least 70 percent should be for
easily identifiable productive purposes.
During pre – multiagency approach to rural credit land development
banks played a decisive role in providing long term loans for agricultural
development. Even during the post – multiagency period also the PCARD
Banks as exclusive rural investment banks have played a vital role in
advancing funds to agricultural and other rural economic activities. The long
term loan meant for acquiring or creating capital assets is to assure and
stabilize agricultural production and give the farmers a better sense of security
than he had before he made such investments. The creation of capital assets
either by installation of pump sets, sinking of bore wells or acquisition of
tractor/tiller is to raise the level of this agricultural practices resulting in better
production. Such farm investment further enables the cultivator to practice
extensive as well as intensive farming, example, if a pump set has been
installed he may bring additional area in the ambit of his cultivation.
Availability of water enables him to conduct more intensive farming and
produce two or three crops than he did before. Availability of water also
enables him to grow certain crops which need heavy water such as
sugarcane, paddy, areca, etc. The intensive farming and raising of two or
three crops in a year increases farm activities and ultimately increase more
employment for his family as well as wage - labour. It may also generate other
secondary activities.
PCARD BANKS IN KARNATAKA
The primary Co-Operative Agriculture and Rural development Banks
which are functioning in Karnataka are individual autonomous bodies and
members of the Karnataka State Co-Operative Agriculture and Rural
Development Bank. These banks borrow funds from KSCARD Bank and
lends directly to the agriculturist. The first PCARD Banks was come into
58
existence on 10th July 1930, at Bhimana Khone in shimoga District. At present
there are 177 PCARD Banks spread over all the 177 taluks in the state of
which two PCARD Banks are under liquidation. PCARD Banks provides
investment credit for activities such as minor irrigation, farm mechanization,
horticulture and plantation, land development, animal husbandry, fishery, farm
forestry and Non-Farm sector. The loans are provided for different periods
ranging between 3-16 Years according to types of investment, life of assets
and repaying capacity of the borrowers at administered interest rates
determined by the RBI/National Bank. The present interest rate is in the range
of 3 to 10 percent.
The PCARD Banks finance primarily farmers for development of
agriculture. However, these Banks have diversified their activities to non-farm
lending since 1986. This would mainly provide employment opportunities for
rural and others to earn an additional income. There are 177 PCARD Banks
functioning in Karnataka
CONSTITUTION AND MANAGEMENT
The membership of PCARD Banks is confined to farmers, agricultural
laborers, rural artisans and small rural entrepreneurs. As PCARD Banks are
voluntary form of associations, there is no compulsion on anybody to become
the member of the Bank. The PCARD Banks keep their doors open for the
admission of farmers, agricultural laborers, rural artisans and small rural
entrepreneurs.
Management of PCARD Banks consists of a) The General Body and b)
The Board of Directors.
THE GENERAL BODY
The ultimate authority of the administration of the PCARD Banks lies in
the General Body which comprises the members of PCARD Banks. The
meeting of the General Body is generally held once in a year, under the
direction of the Board, the manger of the bank convenes this meeting.
Generally in that meeting the progress of the bank, suitable solutions to the
existing problems, amendment of bye -laws and other issues are discussed
and take decisions.
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Each member of the General body has one vote. The General Body is
empowered to elect the Board members in accordance with rules. The elected
members of the Board, among themselves. elect the President and vice-
President
The main functions of the Board are appointing executive committee
and look after the management of the Bank. The executive committee has
power to admit members, sanction of loans, investments, borrowing, taking
steps in case of defaults, etc., The organizational structure of PCARD Banks
is depicted in the following chart:
Chart 3.1 ORGANIZATION CHART
Chart 3.2 OFFICE ADMINISTRATION CHART
Source: Branch Office of Jagalur, Davangere Dist.
General Body
Board of Directors
President
Vice-President
Vice-President
Manager
Accountant
Field Officers
Assistants
„D‟ Group Workers
60
SOURCE OF FINANCE
The resources of finance of PCARD Banks comprise the owned and
the borrowed funds. The components of the farmers are a) share capital b)
Reserve fund and other reserves and c) Membership and other fees. The
latter consists of a) Deposits b) Borrowings from the state Co-Operative
Agriculture and Rural Development Bank. C) State Government share
contribution d) Grants and subsidies and e) Cash credit.
Share capital
Reserve fund and other reserves
Membership and other fees
Deposits
Borrowings from the KSCARD bank
Grants and subsidies
Cash credit
Interest income
Credit deployment
A sound agricultural credit policy strengthen the farm economy. In other
words, the modern commercial farm enterprise is hinged on the sound credit
policy in the sense adequate wherewithal in right time for right purpose in
easy terms of repayment. The provision of agricultural credit should be aimed
at:
To improve the living standard of the farmers;
To augment the famers to adopt agricultural production and thereby
strengthening farm economy;
To encourage the farmers to adopt new agricultural techniques;
To develop the resourcefulness of farmers.
CREDIT POLICY
To fulfill the above said aim of the agricultural credit, an efficient credit
policy corresponds to the basic postulates of rural credit. In other words, the
credit policy should have facility and safety. Facility means the credit is ready
to provide against proper security, timely and adequately. Safety means the
61
credit should assist and not endanger the borrowers stability and productive
power. And this phenomena guides discipline and the borrower with which
minimize, if not possible to eliminate completely, the evasion of lone amount.
Thus, the cycle of lending and recovery enables the financing institutions in
reloaning program.
1. Viewing the postulates of credit the Reserve Bank of India in its circular
letters asked the cooperative banks financing agriculture to follow the
production-oriented system. The features of the production-oriented system
are:
Fixing of the scale of financing adequately to meet the cost of project for
different purposes
Proposed production of the project on which credits to be advanced
becomes security
Assessing the repayment capacity of borrowers based on the cropping
pattern of their farms
Determining the eligibility of loans with reference to repaying capacity.
Repaying capacity is calculated out of the incremental income
Fixing of the period of the loan with reference to the repaying capacity of
loanee but does not exceed the life of asset created out of the loan.
2. At the instant of the Reserve Bank of India the representatives of the
central cooperative agricultural development banks meeting held in
Bombay on 8th February, 1973 had agreed that from the year 1973-74
onwards, the loans to small farmers should not be less than 20.00 per cent
of total loans.To this effects the Reserve Bank of India issued a circular. In
1975 the National Cooperative Land Development Banks Federation
advised the central cooperative agricultural development banks that the
loans to small farmers should provide 50 per cent of total disbursements.
3. Post-sanction follow-up measures should be taken up to ensure that the
provided credit is:
Not misutilised ;
62
Fully utilized ; and
Recovered by persuasion.
4. Credit is made available to the farmers for agricultural purposes which are
classified into:
Identifiable productive purposes (loans to purposes which are directly
linked with increase in production) ;
Non-identifiable productive purposes (loans for purposes which are
productive but not directly connected with increase in production. Say,
land levelling, bunding, embankment, soil conservation, etc.) ;
Non-productive purposes (loans for repayment of old debts, purchase of
ownership rights etc.).
The non-identifiable productive purposes were to be allowed as identifiable
productive purposes were to be allowed as identifiable productive
purposes from 1st November, 1972 if loans for them provided under the
schematic basis and executed by the State Government or the technical
agency. As consequent the distribution of 90.00 per cent of loan should
go for productive purposes of which at least 70.00 per cent for
identifiable purposes. The loans are made available to following
purposes. They are:
Land improvement ;
Conversion of dry land into wet land ;
Digging and repairs of wells inclusive of tube wells ;
Purchase of oil engines, electric motors, pump sets ;
Purchase of tractors and their accessories ;
Purchase of power tillers, sprayers and other farm machinery ;
Purchase of milch cattle ;
Subsidiary occupations namely sheep and goat rearing, poultry, piggery,
pisciculture ;
Construction of farm houses, cattle shed ; and
63
Horticulture, sericulture, gobar gas plants.
5. To rectify the imbalances between the rich and the poor, it has been
decided that 60.00 per cent of total loans should be advanced to the small
and weaker section farmers of which 15.00 per cent and 6.00 per cent
should necessarily go to scheduled castes and scheduled tribes.
6. The financial discipline is being imposed on primary cooperative banks. If
the primary cooperative banks non-overdue-cover, which means dues by
primaries to the central cooperative banks does not exceed 25.00 per cent.
Then only the former is eligible to get cent per cent reimbursement from the
latter. Overdues arise due to natural calamities. The cooperative bank is to
be permitted to segregate overdues of five years and more into a separate
account called „blaked account‟ and excluded the same from demand. But,
to the extent of 20.00 per cent of this blacked account is to be treated as
demand for the year.
Rescheduling of loans is another method which may be adopted by the
cooperative bank as an alternative to the above. In calculation of
rescheduling of loans, over dues rose due to natural calamities other than
the farmers‟ over dues which mentioned below, are taken into account:
Those farmers who perennial source of irrigation ;
Those who pay income tax ; and
Those who borrowed loans for tractors.
7. Credit Dimensions
The measures which are related to the credit policy and which make it more
effective are discussed hereunder:
Security: Agricultural land is the main security for advances by the
primary cooperative agricultural development banks. The primary co-
operative agricultural development bank accepts the below mentioned
properties as advance loans. The property mortgaged in favour of the
primary cooperative agricultural development bank is assigned to the
apex bank
64
Lands having well irrigation;
Wet land with permanent irrigation;
Dry land;
Garden land.
Loan sanctioning power: The PCARD Banks do not have any
sanctioning power. KSCARD Bank and its district branchs are
empowered to sanction loan. up to `10 lakhs, the branchs sanction and
if, the loan amount is above 10.00 lakhs, the head office sanctions. All
the loan applications essentially pass through two levels. In the first
level, loan applications received by the PCARD Banks are verified,
scrutinized and appraised the PCARD Banks and in the second level
PCARD Banks with its recommendation refers to either apex bank or
district branches for sanction. To avoid delay at primary level, the power
of recommending loan is delegated to executive committee, consisted of
president, secretary, directors and manger of the PCARD Banks.
Down Payment: The concept of down payment was introduced by
PCARD Banks since 1971, for getting the borrower involved in the
project. At present down payment amount ranges between10% to 20%
of the project cost.
Loan disbursement: The sanctioned loan amount is disbursed either in
one lump sum or in installment depending upon the purposes for which
loans are sanction. In case of loans for the purchase of tractors, Power
tillers, Electric motors and Pump sets, Diesel engines and any other
agricultural equipments the disbursement is made directly to the dealer
in one lump sum against the invoice and delivery note.
In case of loans for development purpose the disbursement is
made in three installments representing 30%, 40% and 30% of the loan
amount. Subsequent installments are disbursed only after receiving
utilization certificate issued by authorized officers.
65
Documental Requirement: For getting loan, the applicant has to submit
legal and technical documents and certificates issued by competent
authorities.
LEGAL DOCUMENTS AND CERTIFICATES
Title deeds of land offered for security,
Records of rights and possession certificate for 3 years.
Genealogical tree certificate,
Twelve years encumbrance certificate,
Payment of land revenue receipts and
Latest mutation registers extract.
TECHNICAL DOCUMENTS
Spot selection letter for well and tube well,
Electricity boards sanction letter for supply of power,
Technical feasibility report,
Registration certificate issued by industrial center,
Map and estimation documents,
Bills, quotations, technical appraisal report and proposed map and
Soil and water testing reports
Loan Eligibility and Repaying capacity: In case of loan for development
purpose, fifty percent of the assessed value of land is granted as loan, and
in case of loan for purchase of tractors, power tillers, and other agricultural
equipments, the value of land and cost of equipments are taken together
for calculation of eligible amount of loan. However, the loan amount should
not exceed the value of land. In case of loan sanctioned under NABARD
assisted Schemes, the Government has agreed to guarantee the deficit in
security.
66
The repaying capacity of the borrower is determined at 90% of the net
incremental income. In respect of loans for the purchase of the tractors,
and other equipments the incremental income is determined at 30% of the
existing net income and in cases of loan for construction of farm house,
etc., The repaying capacity is fixed by calculating the surplus income
available after meeting family and other expenditure out of his total income.
Time Limit for Utilization of Loan: The KSCA&RD Bank Ltd. has
prescribed time limits for utilization of loans for different purpose. Loans for
the purposes of sinking of wells, installation of pump sets and for
reclamation of lands should be utilized within three months of the
disbursement of each installment. In the case of plantations, one year has
been fixed as time limit for the utilization of the loan installments from their
respective dates of disbursement.
Seasonality in Lending: In order to prevent the borrower from diverting
the loan amount for unproductive purposes, the PCARD Banks have been
strictly instructed by Karnataka State Co-operative Agriculture and Rural
Development Bank not to disburse the loan amount to a borrower when the
possibility of its utilization does not exist. In other words, the PCARD Banks
are required to observe the seasonality in lending in closed periods. The
Regional Joint Registers of Co-operative societies have fixed such closed
periods for different areas during which the banks are not permitted to
disburse loans.
Annual lending Programmes of PCARD Banks: The annual lending
Programmes of the PCARD Banks are fixed by the KSCA&RDB on the
basis of their actual lending performance and their Non-performing Assets
(NPAs) position at the close of preceding co-operative year. This means
that unless the PCARD Banks are successful in the recovery of loans
already granted their NPAs are within manageable limits, they cannot
embark upon any ambitious lending programme during any current year.
Therefore, the power of the PCARD Banks to entertain fresh applications
for loans is irrevocably linked to their NPAs position.
67
PURPOSE SHIFT-WISE FLOW OF CREDIT
The purposes for which loans issued by PCARD Banks are as given under:
I) Minor irrigation/Land Development
Sinking of new wells.
Construction of new tanks to conserve water for wet cultivation.
Boring and Deeping, reconstructions or repairs to old wells and Deeping,
reconstruction or repairs to tanks.
Purchase and installation of pump sets (Electrical, Diesel, Kerosene),
construction of pump houses.
Lying pipe line.
Installing sprinklers.
Drip irrigation.
Land leveling and fencing.
Banding and reclamation of lands.
Preparation of land for plantation etc.,
II) Sericulture Development
Karnataka, Sericulture Project.
Purchase of sericulture equipment.
Construction of Raring house.
III) Horticulture/Plantation
Coconut development scheme.
For growing mango.
For growing Areca nut.
For Saputo, pomegranate, Pineapple, Leman, grape, cashew, cardamom
cocoa, orange, oil palm, Rubber, Vanilla, coffee, currileaf, Jasmine, and
Rose etc.,
68
IV) Diversified Activities
For running poultry farm.
For Sheep rearing.
For Pig rearing.
For fish rearing.
Dairy development scheme.
Purchase of Bullock and Bullock cart.
V) Non-Farm Sector Activities
United Schemes-Handicrafts, Rural Industry, Leather Industry, Pottery
Paper Products, Printing Products, Glass Products, Rubber Products,
Wooden items, Chemical Products, Plastic Products, Simple carving,
Electrical and Mechanical carving, Sports Materials, etc.,
Integrated scheme-For running flour mill, T.V. cap Cable operation, T.V.
repair, Saw mill, Xerox etc.,
For minor transport vehicle.
VI) Rural Housing
For new house construction.
For house repairs/renovation.
II) General Schemes
For construction of cattle sheds, godowns, etc.,
For putting stone fencing.
For installing gober gas plant. Etc.,
The details of scale of finance, repayment period and minimum
development area are stated in the following table 3.2
69
Table 3.2
DETAILS OF PURPOSE-WISE SCALE OF FINANCE AND REPAYMENT
PERIOD OF PCARD BANKS
Sl No
Project/ Purpose Scale of Finance
Rs.
Minimum Development
area
Grace Period
Repayment Period
Small Farmers
Big Farmers
I Minor Irrigation
Open well 37000-
75000 2-3 acre 23 Months 15 Yrs 9 Yrs
Bore Well 36000 4 acre 11 Months 9 Yrs 9 Yrs
Water storage tank (3.5X3.5X2.5 meters)
29000 2 acre 11 Months 5 yrs 5 Yrs
Pump House (2.5X2.5X2.1 meters)
14000 2-4 acre 11 Months 9 Yrs 9 Yrs
Submergible Irrigation
1 H P 9400 1-2 acre 11 Months 9 Yrs 9 Yrs
2 H P 12000 1-2 acre 11 Months 9 Yrs 9 Yrs
3 H P 16300 1-2 acre 11 Months 9 Yrs 9 Yrs
5 H P 18800 1-2 acre 11 Months 9 Yrs 9 Yrs
7.5 H P 24200 1-2 acre 11 Months 9 Yrs 9 Yrs
Diesel Pump Set
3 H P 18300 1-2 acre 11 Months 9 Yrs 9 Yrs
5 H P 22500 1-2 acre 11 Months 9 Yrs 9 Yrs
Kerosene Pump set 11 Months 9 Yrs 9 Yrs
a) 1.9 H P 13900 1 acre 11 Months 9 Yrs 9 Yrs
b) 3 H P 18600 1 acre 11 Months 9 Yrs 9 Yrs
Pipe line (63 meters) 4400 1-10 acre 11 Months 9 Yrs 9 Yrs
Sprinkler
a) Field Crops 50000-
73900 2.5 acre 11 Months 9 Yrs 9 Yrs
b) Coffee Plantation 26000-
88300 2.5-10 acre 11 Months 9 Yrs 9 Yrs
c) Areca plantation 18000-
68000 1-4 acre 11 Months 9 Yrs 9 Yrs
Drip Irrigation 9900-
183400 1-10 acre 11 Months 14 Yrs 9 Yrs
II Land development scheme
CADA area 3760 1 acre 12 Months 12 Yrs 12 Yrs
Fencing
a) Dry land Rs. 75/-
per meter 2.5 acre 11 Months 9 Yrs 9 Yrs
b) Wet land Rs. 75/-
per meter 1 acre 11 Months 9 Yrs 9 Yrs
Electrical Fencing 18800-
35100 2.5-7.5 acre No 7 Yrs 7 Yrs
Rain Harvesting storage pond
a) 10x10x3 meter 30700 2.5 acre 23 Months 7 Yrs 7 Yrs
b) 8x8x3 meter 24800 2 acre 23 Months 7 Yrs 7 Yrs
Farm pond (Areca 31000- 10 acre No 4 Yrs 6 Yrs
70
plantation) 145000
III Horticulture per acre
Coconut 20750 1 acre 8 Yrs 12 Yrs 12 Yrs
Areca nut 20750 1 acre 8 Yrs 12 Yrs 12 Yrs
Coffee 25000 1 acre 7 Yrs 10 Yrs 10 Yrs
Oil palm 40000 1 acre 6 Yrs 9 Yrs 9 Yrs
Rubber 38800 1 acre 10 Yrs 14 Yrs 14 Yrs
cashew 10400 1 acre 7 Yrs 12 Yrs 12 Yrs
Cardamom 51000 1 acre 4 Yrs 9 Yrs 9 Yrs
Pepper 8500 1 acre 3 Yrs 9 Yrs 9 Yrs
Cocoa 18600 1 acre 6 Yrs 10 Yrs 10 Yrs
Grope 12000-
200000 1 acre 3 Yrs 8 Yrs 8 Yrs
Mango 14500 1 acre 6 Yrs 11 Yrs 11 Yrs
Pomegranate 30000 1 acre 4 Yrs 7 Yrs 7 Yrs
Vanilla 55000 1 acre 1 Yrs 6 Yrs 6 Yrs
Rose 145000 1 acre 1 Yrs 6 Yrs 6 Yrs
Jasmine 49100 1 acre 3 Yrs 10 Yrs 10 Yrs
IV Sericulture development
Karnataka sericulture Project
10200 1-2 acre 1 Yrs 4 Yrs 4 Yrs
Equipment 8000 1-2 acre 1 Yrs 3 Yrs 3 Yrs
Rearing house 49200-
67500 1 acre 1 Yrs 6 Yrs 5 Yrs
Shoot feeding 108000-
180000 2 acre 1 Yrs 8 Yrs 6 Yrs
V Diversified (Animal husbandry)
Dairy Cow 10000-
15000 1 acre dry/1/2 acre wet
6 Months 5 Yrs 5 Yrs
Sheep raring
a) 10+1 23600 1 acre dry/1/2
acre wet 1 Year 5 Yrs 5 Yrs
b) 20+1 44000 1 acre dry/1/2
acre wet 1 Year 5 Yrs 5 Yrs
Piggery 3+1 34800 Suff. Security 1 Year 5 Yrs 5 Yrs
Goat raring
a) 10+1 23100 1 acre dry/1/2
acre wet 1 Year 5 Yrs 5 Yrs
b) 20+1 44000 1 acre dry/1/2
acre wet 1 Year 5 Yrs 5 Yrs
Pair Bullock 22000 1 acre
irrigated No 4 Yrs 4 Yrs
Pair of the Buffalo 6000 1 acre
irrigated No 4 Yrs 4 Yrs
Bullock Cart (Wooden)
15000 1 acre irrigated
No 4 Yrs 4 Yrs
Tire Cart 18000 1 acre
irrigated No 4 Yrs 4 Yrs
VI Goober Gas plant 12500-
32650 No 4-7 Yrs 4-7 Yrs
71
VII Fishery
a) Fish pond 59000-
74200 1-2.5 acre 1 Yrs 4 Yrs 4 Yrs
b) Boat & Net
with engine 4000-60000
1 Yrs 4 Yrs 4 Yrs
VIII Agriculture mechanization
Tractor 95%
Estimated Cost
20 acre dry or 10 acre irrigated
9 Yrs 9 Yrs
Power tiller 90%
Estimated Cost
10 acre dry or 4 acre irrigated
7 Yrs 7 Yrs
Tractor repair 50000 5 Yrs 5 Yrs
Two wheeler 75%
Estimated Cost
5 Yrs 5 Yrs
IX Rural housing
House construction 10 Lac 1 Years 12 Yrs 12 Yrs
House repair/renovation
2.5 Lac 7 Yrs 7 Yrs
X General Schemes
United scheme 10 Lac 3-12 Months
10 Yrs 10 Yrs
Integrated scheme 50 Lac 3-12 Months
10 Yrs 10 Yrs
Small transport service.
10 Lac 6 Months 5 Yrs 5 Yrs
Source: KSCARD Bank Bangalore. Circular No, 5, Dated 17-6-2009. BPD/Unit cost/61/2009-10.PP:1-15.
72
Table 3.3
TRENDS IN SHARE CAPITAL OF PCARD BANKS IN KARNATAKA
(` IN LAKHS)
SHARE
CAPITAL
MEMBERS STATE TOTAL
2001-02 8234.63 676.97 8911.6
2002-03 8387.28 696.25 9083.53
2003-04 8406.29 703.38 9109.67
2004-05 8559.69 706.19 9265.88
2005-06 7991.56 719.83 8711.39
2006-07 8769.99 708.36 9478.35
2007-08 9389.15 706.03 10095.18
2008-09 10005.72 695.52 10701.24
2009-10 10661.67 697.23 11358.9
2010-11 10923.36 681.76 11605.12
CGR % 3.366877 0.00022571 3.367103
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
73
Table 3.4
TRENDS IN MEMBERSHIP OF PCARD BANKS IN KARNATAKA
MEMBERS BORROWERS NON-BORROWERS
TOTAL PERCENTAGE OF
BORROWERS TO TOTAL MEMBERS
2001-02 7,00,656 3,49,423 10,50,079 66.72
2002-03 7,01,237 3,48,737 10,49,974 66.79
2003-04 6,82,480 3,22,342 10,04,822 67.93
2004-05 6,89,418 3,45,095 10,34,513 66.64
2005-06 6,79,105 3,58,530 10,37,635 65.45
2006-07 6,61,326 3,89,431 10,50,757 62.94
2007-08 6,67,930 4,14,902 10,82,832 61.68
2008-09 6,86,703 4,13,671 11,00,374 62.41
2009-10 6,66,340 3,95,758 10,62,098 62.74
2010-11 6,56,409 4,23,430 10,79,839 64.51
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
74
Table 3.5
TRENDS IN LOAN ISSUES DURING THE YEAR OF PCARD BANKS IN
KARNATAKA
(` in Lakhs)
PURPOSE WISE AGRI NON-AGRI DEP. LOANS
TOTAL
2001-02 10301.01 1315.69 6633.80 18250.50
2002-03 10445.51 1676.69 5433.34 17555.54
2003-04 7493.50 982.53 4333.48 12809.51
2004-05 9865.07 1897.31 4240.37 16002.75
2005-06 15257.41 2502.67 4893.09 22653.17
2006-07 23118.12 1717.05 4531.31 29366.48
2007-08 20058.74 1151.79 4556.59 25767.12
2008-09 17362.22 370.71 4978.14 22711.07
2009-10 18447.74 307.45 6068.58 24823.77
2010-11 18996.14 396.89 7021.88 26414.91
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
75
Table 3.6
TRENDS IN DEMAND, COLLECTION AND BALANCE (TOTAL ONLY) OF
PCARD BANKS IN KARNATAKA
(` in Lakhs)
DEMAND COLLECTION BALANCE PERCENTAGE OF
COLLECTION TO DEMAND
2001-02 68,484.58 18,588.69 49,895.89 27.14
2002-03 73,551.05 17,977.18 55,573.8 24.44
2003-04 76,247.15 16,809.02 59,438.13 22.05
2004-05 81,248.04 11,750.91 69,497.13 14.46
2005-06 1,05,161.36 66,717.00 38,444.36 63.44
2006-07 64,185.55 30,215.42 33,970.13 47.08
2007-08 62,459.17 24,029.30 38,429.87 38.47
2008-09 68,819.82 29,934.19 38,885.63 43.50
2009-10 67,888.22 26,765.76 41,122.46 39.43
2010-11 72,858.23 38,248.45 34,609.78 52.50
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
76
Table 3.7
TRENDS IN OVERDUE (AGE-WISE) (TOTAL ONLY) OF PCARD BANKS IN KARNATAKA
(` IN LAKHS)
Sl No
AGE - WISE
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-
11
1 1 YEAR 8,862.96 9,377.63 7,944.76 7,637.21 7,876.40 8,992.24 10,709.58 9,564.35 6,775.29 4857.12
2 2 YEAR 6,858.08 7,658.61 7,021.60 7,830.93 4,252.57 3,883.58 8,294.45 9,210.93 8,683.66 4846.93
3 3 YEAR 6,393.47 7,079.22 6,705.40 7,415.81 3,410.51 2,772.72 3,071.99 4,847.79 7,618.70 9556.77
4 4 YEAR 6,084.23 6,610.52 5,607.55 6,519.38 3,096.92 2,676.49 1,846.46 2,076.74 4,646.00 5473.25
5 5 YEAR 6,915.70 7,407.68 6,147.94 7,254.89 3,315.00 3,123.94 2,053.82 1,800.97 2,034.67 3287.20
6 Above 5YEAR
14,781.44 17,440.21 26,010.88 32,838.91 16,492.96 12,521.16 12,453.57 11,384.85 11,364.14 10188.78
Total 49,895.88 55,573.87 59,438.13 69,497.13 38,444.36 33,970.13 38,429.87 38,885.63 41,122.46 34609.78
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
77
Table 3.8
TRENDS IN OVERDUE (SECTOR WISE) OF PCARD BANKS IN KARNATAKA
(` IN LAKHS)
Sl No
SECTOR WISE
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
1 MI 20,864.79 22,388.58 23,622.52 26,312.69 13,238.52 10,895.06 11,766.55 10,779.14 11,078.65 9053.91
2 FM 5,651.20 6,582.63 7,478.29 9,536.11 4,738.44 4,667.75 4,897.15 4,874.67 4,027.31 2972.08
3 SERI 2,440.84 2,897.79 3,028.24 3,306.12 1,340.89 1,328.13 1,472.80 1,575.79 1,612.00 1334.96
4 HORT 4,862.12 6,193.31 6,585.01 8,975.19 5,358.38 4,675.37 6,607.86 6,750.94 8,294.26 6514.19
5 DIV 5,262.05 5,685.02 5,772.82 6,249.24 3,642.10 2,988.12 3,372.29 3,209.34 3,653.62 3602.40
6 NFS 5,546.01 5,617.04 5,937.81 6,590.86 4,737.92 3,962.05 3,861.76 3,383.53 2,755.49 2011.57
7 RHS 1,464.08 1,696.08 2,159.59 2,444.26 2,436.32 2,872.55 2,879.16 4,038.68 4,486.26 4240.10
8 GS 3,277.92 3,531.02 3,889.68 4,656.79 2,055.07 1,421.00 1,549.49 1,904.31 1,730.43 1432.40
9 OTH 526.87 982.40 964.17 1,425.87 896.72 1,160.10 2,022.81 2,369.23 3,484.44 3448.17
Total 49,895.88 55,573.87 59,438.13 69,497.13 38,444.36 33,970.13 38,429.87 38,885.63 41,122.46 34609.78
Source: Statistical Report of KSCARD Bank Ltd., Bangalore. (MI-Minor irrigation, FM-Farm Mechanization, SERI-Sericulture, HORT- Horticulture, DIV-Diversified activities, NFS-Non Farm Sector, RHS-Rural Housing Scheme, GS-General Scheme, OTH-Others)
78
Table 3.9
TRENDS IN BAD ASSETS OF PCARD BANKS IN KARNATAKA
(` in Lakhs)
BAD ASSETS
2001-02 12455.71
2002-03 14170.90
2003-04 17081.73
2004-05 18099.74
2005-06 11441.98
2006-07 10162.92
2007-08 10391.59
2008-09 10764.90
2009-10 10644.71
2010-11 10685.91
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
79
Table 3.10
TRENDS IN WORKING RESULTS OF PCARD BANKS IN KARNATAKA
(` in Lakhs)
ACCUMULATED LOSS
2001-02 41161.48
2002-03 48670.21
2003-04 59187.91
2004-05 69731.70
2005-06 43774.03
2006-07 40295.55
2007-08 43450.04
2008-09 46699.45
2009-10 49521.90
2010-11 49865.12
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
80
Table 3.11
NUMBER OF PCARD BANKS IN KARNATAKA UNDER PROFIT OR LOSS
Year Profit Loss Total
2001-02 18 159 177
2002-03 21 156 177
2003-04 22 155 177
2004-05 6 171 177
2005-06 169 8 177
2006-07 104 73 177
2007-08 80 97 177
2008-09 79 98 177
2009-10 56 121 177
2010-11 95 82 177
Source: Statistical Report of KSCARD Bank Ltd., Bangalore.
81
A PROFILE OF DAVANGERE DISTRICT
Davangere distict is one of the 30 districts of Karnataka state. The
district came into existance on 15th august 1997.This has been carved out
from three districts namely: chitradurga (davangere, harihar and jagalur
blocks), shimoga (channagiri and honnali blocks) and bellary (harapanahalli
block) by the state government, when the creation of new districts was taken
up to facilitate rapid development and speedy administration by creating new
compact district units. Incidentally this has become one of the highly potential
districts with the combinations of six blocks of distinct geo-climatic features
endowed with significant natural infrastructure and inherent agra-industrial
potential yet to be exploited.
SITUATION AND EXTENT
Davangere district is almost centrally located in Karnataka. The
district is surrounded by bellary district in the north,chitradurga and shimoga
district in the south ,bellary and chitradurga districts in the east and haveri and
shimoga districts in the west.
Zilla panchayat is situated at the district head quarters. The six taluks
channagiri, Davanagere, Harapanahalli, Harihar,Honnali and jagalur are
divided into Two sub divisons for administrative pupose.The districts has
5924sq.km of geographical area consisting of 24 hoblies,93 vollages(810 are
Inhabited and 113 un Inhabited)distributed among 6 taluks and 230 village
panchayats.
TO POGRAPHY
Out of 59,7597 hectares of geographical area, 38,9771 hectares are
cultivable area,89918 hectares are under forest,25,394 hectares are fallow
land, 8525 hectares are cultivable waste land,4955 hectares are trees and
groves 19,538 hectares are permanent pasture land,38963 hectares are non-
agricultural land and 20,533 hectares are barren land.
CLIMATE
Out of 6 blocks, channagiri and honnalli blocks come under
malnad area have hot summer, pleasant vintner and a good Manson
82
davangere and harihar blocks also have hot summer pleasant winter
and considerable rait all harapanahalli and jagalur blocks have very
low raint all and a pleasant winter however the district receives on
an average 623mm of rain per annum , and normal rain day sare are
43.
DEMOGRAPHY
The degree of development of agricultural industrial or commercial
depends upon demographic features of particular region or a district. The total
population of the district is 17.90.952 (2001 cesus) (projeetes population on
2010 is 20.32.446) of this rural population is 12.47.954 and urban and semi-
urban population is 5.42998. out of the total population 9.177.5, population is
male and the 8.73.1247 population is female. The Weaker Section
Community consisting of the Scheduled castes and Schedled frones-
constitute 30.32% of the total population (scheduled caste-333227, and
schedtribes-209701) The densit of population is 302 per sg, km, which is
more than the state average 276 per sg km. 65.30% of the total working
Population is dependent on agricnlture. There ase 7.83781 workers,
2.41058 are cultivators, 30.233 are tlousehold industry workers, and 2.41.787
are other workers. Highest population is found in davangere blok and the
lowest in jagalur block .
EDUCATION AND LITERACY
The progress of a nation a state or a district is dependent to education
of inhabitants. Knowledge acquired through proper education enables people
to take up modern methods of cultivation, industries, business etc, for
improving their socio- economic conditions. In fact Knowledge is a permanent,
powerful and precious asset. In urban areas education facilities are good but
in rural areas they are inadequate and not upto the work in quality. The more
the literacy rate the higher will be the level of economic achievement because
the approach of the people will be rational and result- oriented. The state has
made good progress in this field. The average literacy rate in the district is
67.40% which is more than the state average i.e.66.60% and our country i.e.
83
65.38% The rate of of literacy is more among males i.e. 76.40% than female
i.e. 58% (as per 2001 census)
WATER RESOURCES
Water plays an important role in the development of agricnture and in
the generation of power, which in turn is used in industries, agriculture,
households, transport etc. Rivers, welk, ponds lokes and rain are the sources
of water in the district.
RIVERS
The Tungha Bhadra perennial river is the main river of the dietrict.
Tungha of the Bhadra river flows on the western boundary of the district, while
croseing the tlonnali block with full force adjacent to harihar block .Bhadra is
another river that provides irrigation facility to four blocks
namely:honnali,channagiri,harihar and davanagere in the district there is a big
natural lake shanthisagar which has also become a major source of irrigation
to the new district.
OCCUPATION
Agriculture
Plantation and horticulture:
Sericulture:
Animal husbandry:
Industries and tertiary sector:
LAND HOLDING PATTERN
The smalls and marginal farms constituting around 87% of holding
haring 59% are whereas the other farms constitating 13 % are holding 41 % of
the area. However 62321 hectare of land is in the holding of 120074
farmers with less than one hectare of land 113.072 hectare of land is in the
holding of 80428 farmers with less than two hectare and above one hectare
122825 hectare of land is in the holding of 45593 farmers with less than Four
hectare and above two hectare 94999 hectare of land is in the holding of
16931 farmers with less than ten hectare and above four hectare and 23048
hectare of land is in the holding of 1694 farmers with more than ten hectare
84
FACTORS AFFECTING DEVELOPMENT OF RURAL ECONOMY
The various factors affecting the district rural economy and
development of various sectors are presented in the form of SWOT analysis
STRENGTH
Blessed with fertile
Healthy mix of all types of banking financial institutions with a wide net work
Four blocks having irrigation facility and assured rainfall
Enthusiastic district administration and local self-governments
Sample scope for development of all the sectors
District head quarter is strategically located and potentially blessed growth
centre.
Good network of roads and railways
Good network of educational institutions.
WEAKNESS
Two blocks are dependent on rainfall
40% of the target group are under DPAP needing special attention
Depletion of water resources in 2 blocks which are about to turn grey jaglur
and davanagere
Poor recovery of bank loans especially under government sponsored
programmes which dampen banks involvement
Aversion to adopt modern technology and farm mechanization
Inadequate power supply /erratic
Lock of infrastructural facilities like roads marketing facilities et
Lock of drive will to take up risk/ face challenges in rural areas and
Lock of enter perneurship
85
OPPORTUNITIES
Ample scope for developing farm practice such as horticulture/ animal
husbandry/floriculture etc.
opportunities and scope for high- technology projects to develop in arid
climate blocks
Scope for innovative scheme like vermiculture plastic mulching medicinal
and aromatic herbs modern nurseries.
Davangere could be developed as a technology centre and fast growing
urban conglomerate in northern Karnataka
scope for formation of SHGS in which the district is yet to take initiative
Ample scope for development of agro-based industries.
THREATS
Large scale miss – utilization of bank loans / lack of repayment ethics.
Fast depletion of ground water sources.
STRATEGIES TO OVERCOME WEAKNESSES OR THREATS:
Encouraging farmers to adopt improved modern agricultural technology
Improving of irrigation facilities through construction of new tanks or
deepening existing tanks by removing silt and irrigation dams harnessing
lift irrigation potential digging new bore – wells where ground water
potential is rich
Discouraging miss utilization of loan and encouraging repayment of loan
on time through moral suasion and some times severe action
Providing adequate and timely loan to new customers or new members and
to prompt repayers of lone.
strengthening the loan recovery machinery
Providing sufficient power to agriculture industries either by improving the
power supply or by installing generators.
Improving rural roads and increasing the frequency of bus trips
Improving the quality of education heath and sanitation and telephone
facilities in rural areas
86
PROFILE OF PCARD BANKS OF DAVANAGERE DISTRICT
ORIGIN
PCARD Banks Originally called Land mortgage banks, because these
banks were advancing long term credit to farmers on the mortgage of land.
Subsequently the objectives of these banks widened to include agricultural
and total developmental activities of farmers and rural people. Therefore,
PLDBs have been rechristened as primary co-operative Agriculture and Rural
Development Banks.
ESTABLISHMENT AND AREA OF OPERATION
1. The PCARD Banks of Channagiri Taluk:
In the channagiri taluk the PCARD Banks was registered on 10th Sept
1941 under the Mysore state co-operative societies Act of 1918, No RCS
1562. This bank covers six revenue blocks (Hoblies) viz, Basavapatna-1,
Basavapatna-2, Channagiri, Santhebennuru-1, Santhebennuru-2 and
Ubrani.
The area of operation of this bank is 1209.76 square kilometers with
total population, of 2,92,507 (2001 census) and it has to provide loans to
209 villages.
2. The PCARD Banks of Davanagere Taluk:
The PCARD Banks in Davanagere taluk was established on 29th
June 1938, (No RCS 1533, under Mysore state co-operative societies Act
of 1918.) the area of operation of the banks spread over three revenue
blocks, viz., Anagodu, Davangere and Mayakonda and covers 153 villages.
The bank serves a population of 6,02,523 (2001 census) in 994.10 square
kilometers.
3. The PCARD Banks of Harapanahalli Taluk:
This PCARD Banks was registered under co-operative societies Act
of 1918 on 31st Oct 1956. No RCS 1622. This bank covers the area of
1430.24 square kilometers having four revenue blocks namely Arasikere,
Chitgateri, Harapanahalli and Telagi. These blocks have a population of
2,68,793 (2001 census ). This bank extand credit to 80 villages.
87
4. The PCARD Banks of Harihara Taluk:
The Harihara Bank was established on 27th May 1941. Under
Mysore state co-operative societies Act 1918 NO.R.C.S. 1559. 75 villages
of this taluks are spread over two revenue blocks namely Harihara and
Malebennuru with a population of 2,45,654 (2001 census) the operational
jurisdiction of this bank is 498.66 square kilometers.
5. The PCARD Banks of Honnali Taluk:
The Honnali taluk PCARD Banks was started on 20th Oct 1938. RCS
No.1534. This bank covers six revenue blocks viz, Belaguthi, Govina Kovi-
1, Govina Kovi-2, Hoannli, Saswehalli-1 and Saswehalli-2 with an area of
887.94 square kilometers. The operational area of this bank is spread over
153 villages with a population of 2,22,592 (2001 census).
6. The PCARD Banks of Jagalur:
This bank was established on 17th Sept 1941. RCS No. 1563. This
bank provides credit to 140 villages in three blocks namely, Bilachodu,
Jagalur and Sokke with a total area of 955.27 Square Kilometers. The
Population of the taluk is 1,58,883 (2001 census).
88
Table 3.12
MEMBERSHIP OF PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
PCARD Banks
Channagiri 6130 6617 6471 6586 6766 6880 6963 7120 7182 7225
PCARD Banks
Davanagere 9282 9423 9537 9753 10249 10481 10581 10663 10753 10832
PCARD Banks Jagalur
6088 6185 6284 6402 6580 6802 7129 7129 5731 5828
PCARD Banks
Harihara 8051 9076 9238 9271 9309 9461 9542 9676 9750 9898
PCARD Banks
Harpanahalli 7628 7981 8009 8261 8729 9099 9272 9481 9681 9898
PCARD Banks
Honnali 9240 9546 10068 10297 10597 10781 10917 11197 11382 11505
Source: Audit report of concerned PCARD Banks
89
Table 3.13
TALUK AND YEAR WISE BORROWING MEMBERS OF DAVANAGERE DISTRICT PCARD Banks
(` in Lakhs)
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
PCARD Banks Channagiri
3654 3758 3885 3990 3677 3932 4747 4564 4261 3867
PCARD Banks Davanagere
3722 3624 3934 4751 3144 3234 3138 3901 3518 3010
PCARD Banks Jagalur
4219 4316 4415 4533 4711 4933 5260 5260 3861 3958
PCARD Banks Harihara
5923 6009 6153 6179 6206 6351 6413 6547 6621 6780
PCARD Banks Harpanahalli
4502 4755 4883 5135 5603 5973 6146 6355 6555 6772
PCARD Banks Honnali
7034 7326 7523 7752 8052 8236 8372 8652 8837 8960
Source: Audit report of concerned PCARD Banks
90
Table 3.14
PAID UP SHARE CAPITAL OF PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
PCARD Banks Channagiri
151.18 160.37 162.64 163.43 151.28 151.50 147.61 145.61 135.43 121.54
PCARD Banks Davanagere
129.31 132.56 134.81 138.64 126.24 126.51 123.80 121.55 113.04 101.27
PCARD Banks Jagalur
42.56 39.91 39.04 39.84 35.13 37.77 39.68 37.91 36.76 34.48
PCARD Banks Harihara
107.35 102.71 100.33 102.59 87.88 89.57 87.85 89.20 95.08 95.74
PCARD Banks Harpanahalli
44.58 42.09 39.55 42.22 37.13 45.52 48.33 54.73 59.78 64.76
PCARD Banks Honnali
122.06 135.43 138.88 146.33 143.32 142.80 135.12 133.50 122.31 111.70
Source: Audit report of concerned PCARD Banks
91
Table 3.15
RESERVE FUND OF PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
PCARD Banks Channagiri
83.31 84.74 86.56 88.18 158.98 227.74 262.90 241.68 252.69 257.36
PCARD Banks Davanagere
13.06 13.24 13.75 14.47 15.17 15.75 15.79 16.05 16.11 16.11
PCARD Banks Jagalur
113.51 125.68 129.72 144.17 115.30 88.45 90.89 73.60 77.67 62.70
PCARD Banks Harihara
107.35 108.37 131.79 192.78 68.66 226.63 228.36 224.66 216.23 223.87
PCARD Banks Harpanahalli
91.67 103.75 148.90 152.90 57.22 58.16 48.33 62.52 64.64 29.45
PCARD Banks Honnali
85.60 67.19 110.61 187.59 250.56 207.34 206.75 186.19 207.37 200.15
Source: Audit report of concerned PCARD Banks
92
Table 3.16
DEPOSITS OF PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
PCARD Banks Channagiri
25.25 25.59 20.42 13.90 4.19 0.26 0.74 0.11 0.10 0.10
PCARD Banks Davanagere
73.63 56.01 25.05 17.38 8.48 3.66 2.36 1.30 1.30 1.30
PCARD Banks Jagalur
3.54 3.44 2.50 1.60 1.49 1.48 1.48 1.28 0.10 0.10
PCARD Banks Harihara
48.32 53.87 45.79 47.91 39.48 40.20 25.68 18.09 8.44 3.36
PCARD Banks Harpanahalli
81.45 84.81 84.85 77.59 92.47 95.51 105.15 145.43 235.54 337.97
PCARD Banks Honnali
121.01 130.00 118.59 126.85 123.40 67.62 52.98 45.26 46.86 20.31
Source: Audit report of concerned PCARD Banks
93
Table 3.17
LOAN AVAILED BY PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
PCARD Banks
Channagiri
From KSARDB 2173.19 2314.83 2397.82 2347.20 2029.75 1811.06 1956.49 1755.24 1568.10 1293.57
From SC/ST Board
18.94 19.92 19.92 19.92 19.33 14.07 19.33 14.07 14.07 11.60
Total 2192.13 2334.75 2417.74 2367.12 2049.08 1825.13 1975.82 1769.31 1582.17 1305.17
PCARD Banks
Davanagere
From KSARDB 1746.51 1846.88 1937.38 2091.92 1414.17 1381.90 1320.71 1222.32 1031.15 862.78
From SC/ST Board
8.84 5.54 5.54 6.45 5.56 5.06 5.06 5.06 5.06 3.70
Total 1755.35 1852.42 1942.92 2098.37 1419.73 1386.96 1325.77 1227.38 1036.21 866.48
PCARD Banks Jagalur
From KSARDB 776.06 796.97 810.86 844.88 695.00 718.40 650.69 636.38 316.56 586.62
From SC/ST Board
2.45 2.45 2.45 2.45 2.45 2.06 1.26 1.26 1.26 1.26
Total 778.51 799.42 813.31 847.33 697.45 720.46 651.95 637.64 317.82 587.88
94
PCARD Banks
Harihara
From KSARDB 1188.52 1102.93 1101.84 1215.14 828.62 853.14 838.85 851.54 983.27 1069.14
From SC/ST Board
2.49 2.49 2.05 2.05 1.10 1.10 0.70 0.70 0.70 0.70
Total 1191.01 1105.42 1103.89 1217.19 829.72 854.24 839.55 852.24 983.97 1069.84
PCARD Banks
Harpanahalli
From KSARDB 720.06 703.09 699.57 781.77 485.07 609.56 587.82 623.75 688.03 606.80
From SC/ST Board
4.52 5.64 6.06 5.80 5.64 5.64 5.64 5.64 5.54 5.54
Total 724.58 708.73 705.63 787.57 490.71 615.2 593.46 629.39 693.57 612.34
PCARD Banks
Honnali
From KSARDB 1489.17 1561.28 1663.45 1459.43 1657.61 1603.73 1445.82 1482.66 1286.71 1004.23
From SC/ST Board
7.87 9.16 9.75 9.39 8.32 8.15 7.76 7.76 7.76 5.63
Total 1497.04 1570.44 1673.2 1468.82 1665.93 1611.88 1453.58 1490.42 1294.47 1009.86
Source: Audit report of concerned PCARD Banks
95
Table 3.18
LOAN GRANTED TO BORROWING MEMBERS BY PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
Taluk PCARD Banks Channagiri
PCARD Banks Davanagere
PCARD Banks Jagalur
PCARD Banks Harihara
PCARD Banks Harpanahalli
PCARD Banks Honnali
Year LOAN GRANTED
2001-02 425.62 304.33 17.04 113.89 14.82 325.94
2002-03 326.52 241.33 39.92 82.06 22.97 5657.79
2003-04 153.1 134.64 22.71 83.19 14.87 169.38
2004-05 170.89 192.63 37.66 169.24 4443.74 251.74
2005-06 313.83 209.86 44.5 246.52 101.66 307.06
2006-07 246.73 199.33 107.88 225.38 171.58 263.49
2007-08 145.32 51.56 54.94 172.99 89.74 121.23
2008-09 170.44 188.94 83.17 259.86 140.05 200.61
2009-10 152.39 126.04 36.3 346.49 102.28 154.67
2010-11 63.81 54.89 57.74 254.45 124.63 109.98
Source: Audit report of concerned PCARD Banks
96
Loan collected from borrowing members:
The collection of loan in time is a primary factor of the bank in planning the loaning system. If the loan instalments become
overdue, the entire loaning structure gets diluted and weak, and it will have a harmful effect on the growth, profitability and stability
of the bank. Loan granting and collection represents two sides of the same coin. Loan granting without collection bear no fruits,
collection without granting has no seeds. These two aspects are interlinked interdependent and inseparable. The following table
gives the details of loan collected from borrowing members of PCARD Banks of Davanagere District.
Table 3.19
LOAN DEMAND, COLLECTION AND PERCENTAGE OF COLLECTION TO DEMAND BY PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
Taluk PCARD Banks Channagiri
PCARD Banks Davanagere
PCARD Banks Jagalur
PCARD Banks Harihara
PCARD Banks Harpanahalli
PCARD Banks Honnali
Year LOAN GRANTED
2001-02
DEMAND 708.67 917.88 439.62 790.16 415.31 602.13
COLLECTION 368.31 385.90 109.34 371.47 142.15 315.70
PERCENTAGE 51.97 42.04 24.87 47.01 34.23 52.43
2002-03
DEMAND 906.15 923.99 452.68 805.37 389.54 62.79
COLLECTION 373.60 281.53 100.60 291.36 109.17 27.01
PERCENTAGE 41.23 30.47 22.22 36.18 28.03 43.02
2003-04
DEMAND 972.07 1004.47 440.47 803.65 375.27 767.59
COLLECTION 303.29 214.15 75.40 209.97 74.60 254.88
PERCENTAGE 31.20 21.32 17.12 26.13 19.88 33.21
2004-05
DEMAND 1156.14 1139.97 453.92 909.58 425.16 905.77
COLLECTION 223.36 153.10 35.49 134.32 52.24 224.97
PERCENTAGE 19.32 13.43 7.82 14.77 12.29 24.84
97
2005-06
DEMAND 1656.61 1640.07 590.76 1169.13 592.82 1224.60
COLLECTION 1088.46 1128.34 356.56 878.01 483.26 693.18
PERCENTAGE 65.70 68.80 60.38 75.10 81.52 56.60
2006-07
DEMAND 1161.94 970.99 367.06 595.61 216.89 1044.75
COLLECTION 386.69 301.54 103.81 188.53 72.07 328.47
PERCENTAGE 33.28 31.05 28.28 31.65 33.23 31.44
2007-08
DEMAND 1350.70 1038.56 357.51 704.56 286.15 1184.86
COLLECTION 551.25 266.89 114.00 275.65 151.29 502.18
PERCENTAGE 40.81 25.70 31.89 39.12 52.87 42.38
2008-09
DEMAND 1323.93 1139.55 323.35 653.56 256.01 1121.77
COLLECTION 503.87 370.06 68.32 327.80 121.19 420.08
PERCENTAGE 38.06 32.47 21.13 50.16 47.34 37.45
2009-10
DEMAND 1320.91 1088.04 340.88 636.29 277.58 1167.53
COLLECTION 491.64 356.44 90.12 298.29 168.82 494.67
PERCENTAGE 37.22 32.76 26.44 46.88 60.82 42.37
2010-11
DEMAND 1282.16 1053.96 326.60 647.65 267.29 1041.71
COLLECTION 517.65 430.83 136.29 339.28 188.71 526.41
PERCENTAGE 40.37 40.88 41.73 52.39 70.60 50.53
Source: Audit report of concerned PCARD Banks
98
Table 3.20
LOAN DUE FROM MEMBERS OF PCARD BANKS DAVANAGERE DISTRICT
(` in Lakhs)
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
PCARD Banks
Channagiri 2213.18 2355.23 2376.91 2380.59 2097.57 2111.64 1967.52 1846.40 1700.91 1449.82
PCARD Banks
Davanagere 1756.81 1831.89 1871.57 1931.09 1589.92 1614.30 1524.82 1404.58 1230.81 1041.67
PCARD Banks Jagalur
578.84 546.45 524.40 540.24 416.02 459.16 443.32 421.00 401.73 369.43
PCARD Banks
Harihara 1292.33 1248.71 1194.80 1266.80 1020.29 1113.92 1103.89 1086.36 1187.66 1239.99
PCARD Banks
Harpanahalli 628.53 576.15 551.36 501.76 375.07 494.69 510.68 544.20 506.33 516.47
PCARD Banks
Honnali 1663.44 1714.60 1771.94 2037.31 1889.82 1781.85 1714.76 1645.74 1439.52 1416.02
Source: Audit report of concerned PCARD Banks
99
Table 3.21
LOSS INCURRED BY PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
PCARD Banks Channagiri
PCARD Banks Davanagere
PCARD Banks Jagalur
PCARD Banks Harihara
PCARD Banks Harpanahalli
PCARD Banks Honnali
ACCUMULATED LOSS
2001-02 -25.00 -262.65 -330.60 -20.12 -232.11 +0.54
2002-03 -203.48 -262.65 -388.06 -56.03 -282.22 -45.02
2003-04 -205.10 -344.70 -436.39 -124.91 -376.27 -126.29
2004-05 -340.26 -470.65 -514.94 -259.88 -426.93 -338.62
2005-06 +5.37 -660.96 -391.18 +180.34 -149.79 -48.84
2006-07 -267.88 -36.52 -384.34 +96.07 -176.89 -154.19
2007-08 -263.66 -177.97 -380.69 +151.71 -163.25 -87.68
2008-09 -219.48 -232.76 -381.12 +197.66 -155.45 -69.16
2009-10 -207-74 -197.72 -402.31 +225.16 -149.64 -51.01
2010-11 -163.14 -168.28 -380.20 +258.43 -111.37 +42.97
Source: Audit report of concerned PCARD Banks
100
Non-Performing Assets of PCARD Banks in Davanagere District:
The Non-performing assets one of the most important problem faced by Primary Co-operative Agriculture and Rural
Development Banks. There are so many factors which contribute for increasing NPA in PCARD Banks as, fault credit appraisal,
lack of effective supervision, improper selection of borrowers and Government sponsored schemes are also responsible for
increasing over dues in PCARD Banks.
Table 3.22 NON-PERFORMING ASSETS OF PCARD BANKS IN DAVANAGERE DISTRICT
(` in Lakhs)
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
PCARD Banks Channagiri
145.10 179.09 183.54 514.61 277.95 224.21 360.12 340.20 508.01 608.75
PCARD Banks Davanagere
270.20 314.48 317.80 719.61 217.11 225.08 241.77 380.88 349.34 448.96
PCARD Banks Harihara
192.80 215.52 247.54 335.40 78.05 123.44 83.96 124.64 132.65 193.80
PCARD Banks Harapanahalli
102.03 117.17 262.14 179.16 73.71 42.11 39.20 63.13 56.89 35.16
PCARD Banks Honnali
201.05 196.51 253.87 374.84 264.02 223.88 190.43 233.48 432.96 398.24
PCARD Banks Jagajur
230.28 287.24 273.44 221.59 203.80 250.12 107.68 131.97 135.87 108.62
Source: Audit report of concerned PCARD Banks
During the year 2005-06 state government has waived interest on loan and loan Principal amount up to `25000 hence in that
year percentage of collection is more than the other years and also it is caused for decreased in NPA amount.