PCARD Bank Ltd.

PCardbl means :

Primary Co-operative Agriculture and Rural Development Bank Ltd.,

Karnataka State Co-operative, Agriculture and Rural Development Bank.

Statement showing the Districts, No. of Branches, Membership and Share Capital of PCARDBs in Karnataka.

Karnataka State (Branches)

Sl. No.	Districts	No. of Branches	Membership	Share Capital
I)	Bangalore Divn.
1.	Bangalore City	03	17000	24.71
2.	Bangalore Rural	08	77000	98.92
3.	Chitradurga	09	68000	297.73
4.	Kolar	11	96000	160.46
5.	Shimoga	10	59000	86.37
6.	Tumkur	10	87000	143.17
	Total	51	404000	811.36
II)	Belgaum Divn.
7.	Belgaum	10	61000	127.83
8.	Bijapur	11	81000	174.56
9.	Dharwar	17	74000	153.27
10.	Karwar	11	41000	94.53
	Total	49	257000	550.19
III)	Mysore Divn.
11.	Chikamagalore	08	39000	127.80
12.	Mangalore	08	60000	125.19
13.	Hassan	08	58000	105.91
14.	Coorg	03	13000	49.61
15.	Mandya	07	62000	89.83
16.	Mysore	11	90000	88.35
	Total	45	322000	586.69
IV)	Gulbarga Divn.
17.	Bellary	08	32000	65.76
18.	Bidar	05	20000	59.40
19.	Gulbarga	10	76986 46000	359.60 101.06
20.	Raichur	09	64000	157.36
	Total	32	162000	383.58
	Grand Total	177	1145000	2331.82

Table-3: Showing Number of Branches PCARDB, Gulbarga Division

Branch	Members	Share Capital
Afzalpur	8871	39.48
Yadgir	9975	38.57
Shorapur	7964	26.65
Sedam	5627	21.46
Shahapur	6035	36.18
Jewargi	7820	34.13
Gulbarga	10623	38.08
Chittapur	6452	30.84
Chincholi	7312	40.53
Aland	6307	52.68

Primary Co-operative Agriculture and Rural

Development Bank Ltd., Gulbarga:

The bank under study i.e., PCA&RD Bank Ltd., Gulbarga (PCARDB) has been established on 6^th of August 1960 under Sec. 7 of the Karnataka State Co-operative Act-1959, initially the name of the bank was Primary co-operative and land development bank Ltd., Gulbarga.  Subsequently, according, bearing No. R.N.5.R/45/ K.M.A./1984-85 dtd:25^th of July 1984, the name of the bank has been changed to Primary Co-operative Agriculture and Rural Development Bank Ltd., Gulbarga.

Gulbarga taluka consisting of 144 villages, since inception, the bank is extending credit to its members residing in different villages of the taluka under different schemes.  The amount of loan given by the bank stood at Rs.185.36 lakhs during the year 1985-86.  Now it is increasing and has reached to Rs.349.17 lakhs by the end of 1989-90 at present.

Objectives of Agriculture and Rural Development Bank:

The main objectives of the central land development bank is to provide long term credit either to the primary LOB’s affiliated to them or to finance directly through their branches.  These banks also undertake the following functions.

1)                 They grant to primary LDBs or to Individuals through their branches on the mortgage of un-encumbered property to which the borrower member has a clear title.

2)                 They float debentures for raising necessary funds for which the state government guarantees for the repayment of principal and interest.

3)                 They establish branches / sub-offices or new primary LDBs to facilitate its business.

4)                 They acquire immovable properties and construct buildings.

5)                 They encourage the spirit and practice of co-operative firms, mutual help and self-help groups in the members.

6)                 They act as a link between the long term banking institution, NABARD and the government.

7)                 They mobilize savings and stimulate capital formation in the agricultural sector by issue of debentures.

8)                 They perfect the farmers from the clutches of money lenders and from the alienation of land to help them in effecting permanent improvement on their lands.

9)                 They supervise, inspect and guide the primary LDB’s and verify utilisation of loans.

10)            They perform all such functions as may be conducive to the fulfillment of the above objectives.

Limitations of PCARDBs:

Though the PCARDBs have made considerable progress in recent years in this country, it has not really contributed much to the improvement of financial position of the farmers through the provision of long term credit.  These banks have their problems.  If the Problems given below are considered and solved, these banks will have much more role to play in the development of agriculture in the country.

Inadequacy of Funds:

The PCARDBs are suffering from inadequacy of funds.  More than 80% of the working capital of these banks consists of borrowed funds.  Because of this, the loaning operation of the banks have remained at a low level.  This problem is further aggravated by mounting overdues which are increasing year after years.

Lack of proper supervision

The machinery for supervision is not only inadequate, but also in many branches, even the secretaries and managers are generally untrained and the directors do not possess required experience and ability to manage and guide the affairs of the bank effectively.  Granting o loans involves a number of technicalities such as, ascertaining the quality of soil or land to be mortgaged, repaying capacity of the borrower proper valuation of crop’s generally grown on lands and so on.  There is an utter lack of administrative and supervision staff of right type and on requisite scale and therefore, a full check on the utilisation of loans is rather difficult.

Improper Functioning:

The functioning of the PCARDBs sounds non-co-operative and undemocratic.  This is because of the following reason.

a)                 The amount of loan to be given usually depends upon the security of land.  This means, those who have productive capacity and skills, but not land and other security to offer that is acceptable by the bank are not in a position to get the loan from the bank.

b)                 There is no localized arrangement for assessing the need of the local people.  The field officer, being an outsider with no touch of and knowledge about local conditions, works according to the guidelines given to him by the higher authority.

Faulty learning operations:

The procedure of determining the loan eligibility of a farmer is still ‘security-oriented’ rather than production – oriented.  There is no uniform policy for assessing the repaying capacity of the borrower and the value of land.  In most of the cases, the incremental income due to the proposed improvements are not taken into account and whenever it is considered, there is no systematized procedure of cost benefit analysis.

Delay in sanctioning and disbursement of loans:

There is a great delay in both sanctioning and disbursement of loans.  This result and mainly from delay at the stages of examining the titles of intending borrowers to the lands offered by them as security.  The cause of delay at the sanctioning stages are;

a)                 The ignorance of the borrower in respect of submission of relevant documents along with loan application.

b)                 Lengthy and time consuming process that is taken for scrutiny of titles.

c)                 Lack of frequent meetings of the management and lack of full authority with the managing committee to sanction loan.

Some times the loan sanctioned may be delayed for payment, the cause of such delay may be non compliance of conditions in the loan sanction orders.

Non-viable Branches:

A large number of PCARDBs are non-viable units, the reasons for no-viability may be because of mounting overdues which locks up the funds available with the bank, low mobilidation of deposits by the member lack of funds, etc., As per the committee on co-operative land development bank.  In order to be a viable unit, each PCARDB or a branch of Central LDB should have a minimum loan business of Rs.35 Lakhs.

Management of PCARDB Ltd., Gulbarga:

The management of the PCARDB vests with the board of directions.  The board comprises of selected directors, directors nominated by the registrar of co-operative societies and central level development bank.  For the purpose of electing directors, the members of the bank are divided into two groups, namely borrowed and non-borrowed members.  Among nine directors, seven are elected from the borrowed group and two from non-borrowed group.  There is a reservation for a lady candidate and for a schedule caste or schedule tribe candidate.  The President of the board is elected by the board members in the presence of secretary.

The board is generally expected to by down the broad framework of policies, while execution is entrusted to the Chief Executive who is also called as Secretary and Administrative Officer.  For the better and smooth functioning of the bank, the following authorities give the directives and help in collecting loans and advances given by the bank to its members.

1.                  Deputy Commissioner.

2.                  Special Deputy Commissioner.

3.                  Assistant Deputy Commissioner.

4.                  Registrar of Co-operative Dept.

5.                  Joint Registrar of Co-operative Dept.

6.                  Deputy Registrar of Co-operative Dept.

7.                  Assistant Registrar of Co-operative Dept.

8.                  Managing Director of Karnataka State Agriculture and Rural Development Bank Ltd., Bangalore.

9.                  Tahasildar of Gulbarga Taluka.

10.             Sericulture Department of Gulbarga Taluka.

11.             Horticulture Department of Gulbarga Taluka.

At present, bank consists of a Secretary, an accountant, an accounts assistant, a land development inspector a first divisional clerk and typist.  There are six supervisors to help the staff in collecting the loans and advances and to help the bank in its functioning. Training will be given to the staff for making them aware of the principles of co-operation.  This training is given for a period of six months to the newly appointed staff.  sometimes NABARD also arranges such a training at its own cost to impart training to the staff of primary LDBs, central LDBs and state LDBs.