BUT COOPERATIVES MUST SUCCEED

Basic challenge to the present century-old cooperative financial institutions in our country, as rightly indicated in one of the study reports, is to strike a balance between attaining profitability by running their business on commercial lines on one hand and carrying out their service-oriented activities under the well-conceived principles of coveted 'co-operative movement', on the other. Probably, this inherent conflict in their functions puts pressure on their efficiency and profitability.

- S Satyanaryana

There lies the prudence on the part of the management to draw a line of equilibrium and take up such activities which are beneficial to members and profitable to the Societies at the same time. There are good number of good working societies despite so many odds in their credit and other spheres of their activities. It has been time and again emphasized in many a forum as also in many study reports that co-operatives should play a pivotal role in rural agricultural scenario and should be part of rural development process.

Contrary to this fond hope, most of these ground-level Societies are casting shadows about their financial viability in the long run. Major weaknesses and financial debilities are still persisting, which need to be addressed particularly, in the backdrop of present scenario where the entire banking industry is running through hard times, in the backdrop heavy overdue.

Key summary statistics on PACS

(for three years as on 31 March 2019)

PACS must be rejuvenated

With the advent of the recent technological developments in banking industry, many innovations in services and products are witnessed. It would be stupendous task for PACS to cope with the present trend unless there is a sea change in their approach and mindset. A few remedial measures, though not new and which were already suggested in various committees in the past are furnished in the following paragraphs, though repetitive in nature.

Reorganisation of PACS