Chandigarh, May 24: After waiving Rs 970 crore of loan taken by around 1.78 lakh farmers from cooperative banks in the state, the Punjab government has now decided to strengthen the Punjab State Cooperative Bank by shifting/placing deposits/business of government departments with its more than 802 branches across the state.
A letter in this regard has been sent by Department of Finance to departments rural development, agriculture, water supply and sanitation, power, including Punjab State Power Corporation Limited and Punjab State Transmission Corporation Limited, asking them to shift/place their business henceforth with the Punjab State Cooperative Bank only.
The letter (a copy is with The Indian Express) says these guidelines would be reviewed after six months based on performance of these banks.
A senior official in the finance department said the since state government was going to waive off loans of around 10.25 lakh small and marginal farmers taken from state cooperative banks, these banks needed to be strengthened to tide over the loss and hence the directive to government departments to shift their deposits and businesses to these banks instead of other commercial banks.
Around 80% of the customers of the Punjab State Cooperative Bank are from rural areas. In all, there are 30 lakh account holders, 40 per cent of whom are farmers accounts.
Farmers take two types of loans from these banks. One is short-term agriculture loan of up to Rs 3 lakh for six months on 7% annual rate of interest while the second is in the form of agriculture cash credit limit.
Farmers return their loans during two recovery seasons of bank, from September 30 to January 31 and March 31 to June 30 every year when they sell their Kharif and Rabi crops. During the same period, they are also supposed to deposit the amount in their CCLs.
Source The India Express
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