As shown in the chart above, three main cooperative organizations provide short term credit to rural sector. These are:
1. State Cooperative Banks (SCB)
2. District Central Cooperative Banks (DCCB)
3. Primary Agriculture Credit Societies (PACS)
Main features of these cooperative banks are:
Long Term Credit by Cooperative Societies
• All Primary Cooperative Agriculture and Rural Development Banks (PCARDB) and State Cooperative Agriculture and Rural Development Banks (SCARDB) provide long term credit to members of the cooperative bank. These banks are also named as Land Development Banks in many States.
• These banks provide short term, medium term and long term financial support to needed members.
• Mostly these loans are given against the security of immovable property, mainly land.
• Common activities for which loans are given are reclamation of saline and alkaline lands, sinking of wells, other development works etc.
• The repayment period is long, varying from 5 to 10 years or more in deserving cases.
• The main purpose of such banks was to avoid farmers etc. to go to private money lenders who used to charge exorbitant rate of interest.