CHENNAI: Stepping in to address the severe cash crunch due to demonetisation, the state has asked district central cooperative banks (DCCBs) to disburse agriculture loans to farmers. This would be attached to the primacy agricultural cooperative credit societies (PACCS). A new KYC compliant account will be opened at DCCBs for each of them.
The amount will be credited into this account, from which the PACCS can debit appropriate amounts for supplying fertilisers, seeds and also to make available farm equipment and crop insurance premium. In effect, the DCCBs and the PACCS under them will jointly work on digitising much of the financial transactions on behalf of the farmers. Being non-banking entities, PACCS have not been allowed to exchange the demonetised notes.
Due to this, the functioning of the societies across the state came to a standstill, said the registrar in the report to the government, explaining how the issue of crop loans during the peak agricultural season was stopped as they did not have the required currency for payment.
The registrar had requested the state to facilitate disbursing crop loans and supply of inputs through these societies so that farmers can take up agricultural operations for the on-going Samba crop season. Accepting the proposal, the food and consumer protection department of Tamil Nadu issued the GO.
The bank will bear all expenses for this instead of charging farmers any fee. However, the societies will continue to be the sanctioning authority for loans. Farmers can withdraw the amount permitted by the RBI—`25,000 is the limit now ever since demonetisation—from the respective DCCB branch.