Agriculture Credit

System in India

Sources of Agriculture Credit

Agriculture
Non-institutional
Credit
or unorganized agencies

Non-institutional or
unorganized agencies

Institutional or organized
agencies

1. Government
The Government provides both direct and
indirect finance to farming sector.
Direct Finance Taccavi loan
Indirect finance
Subsidized fertilizer
Price stabilization schemes
Government prescribes the rates of interest
Contributes to the share capital and
debentures of co-operatives

2. Cooperatives
A financial organization owned and controlled by
its members, who can borrow at low interest rates
from an amount of money they have saved as a
group.

Member-owned financialcooperative
Democratically controlled by its members
Providingcreditat competitive rates and
Providing other financial services to its members.

CO-OPERATIVE BANKING
STRUCTURE IN INDIA
CO-OPERATIVE
Short
BANKING

Short Term Cooperative Bank

Structure
Works at state level
State Cooperative Bank Apex Level

Long Term Cooperative Bank

Structure

State Cooperative Agriculture and Rural Development Banks (S

Works at apex level

Co-operative
banks in India
finance rural
areas under:

Farming
Cattle
Milk
Hatchery
Personal
finance

Co-operative
banks in India
finance urban
areas under:

Self-employment
Industries
Small scale units
Home finance
Consumer finance
Personal finance

3. Commercial Banks
1.Public Sector Banks: This includes
SBI & Associates (5)
Nationalized Banks (19)
Other Public Sector Banks (IDBI & Bhartiya
Mahila
Bank.)

2. Private Banks
3. Regional Rural Banks
4. Foreign Banks

Commercial Banks - Functions

Deposits
Saving account deposits
Current account deposits
Recurring account deposits, and
Fixed deposits.
Loans and advances: various forms
Anoverdraftfacility
Cash credit
Bill discounting
Money at call etc.
They also give demand andterm loansto all types of
clients against proper security.

4. Regional Rural Banks

Deficiencies in the functioning of cooperatives and commercial banks
Chairmanship of Narasimhan
Established in 1976
State-sponsored, regionally based and
rural oriented banks are called RRB.
Short, medium and long term loans
Rural and Urban
Agriculture and also for non agricultural sectors
(SSI)

5. RBI-NARARD
Shivaraman Committee
Established 1982
NABARD refinances the financial
institutions which finances the rural sector.