PRIMARY AGRICULTURAL CREDIT SOCIETIES (Syllabus: GS Paper 3 - Agriculture)

Context:  Union cooperation minister said that 17,176 primary agricultural credit societies (PACS) have been registered to function as common service centres (CSC) for helping the rural population with services including banking, insurance and Aadhaar enrolment.

• The PACS will offer more than 300 services such as health services, legal services and Pradhan Mantri Welfare Schemes to the rural citizens, including 130 million farmers in India, said Shah. He also emphasised that out of 100,000 existing PACS, 17,000 have already registered themselves as CSCs.

Primary Agricultural Credit Societies (PACS)

• PACS is a basic unit and smallest co-operative credit institutions in India.
• It provide short-term, and medium-term agricultural loans to the farmers for the various agricultural and farming activities.
• It works at the grassroots gram Panchayat and village level.
• The first Primary Agricultural Credit Society (PACS) was formed in the year 1904.
• The PACS functioning at the base of the co-operative banking system constitute the major retail outlets of short term and medium term credit to the rural sector.
• PACS are registered under the Co-operative Societies Act and also regulated by the RBI.
• They are governed by the “Banking regulation Act-1949” and Banking Laws (Co-operative societies) Act 1965.
• PACS is the final link between the ultimate borrowers, i.e., rural people, on the one hand, and the higher agencies, i.e., Central cooperative bank, state cooperative bank, and Reserve Bank of India, on the other.