Amit Shah Calls for Rural Banking Reform, PACS Strengthening

New Delhi, Nov 26 (PTI) Cooperation Minister Amit Shah on Tuesday directed the National Federation of State Co-operative Banks to prioritise making Primary Agricultural Credit Societies more viable, transparent, and modern.

Speaking at the National Federation of State Co-operative Banks Ltd (NAFSCOB)'s Diamond Jubilee Celebration, Shah expressed concern over the "dilution" of cooperative spirit in state and district-level cooperative institutions in many places.

"I believe this is a matter of concern. We need to strengthen the spirit of cooperation," he emphasised, underlining that true cooperation means collective prosperity and equal profit sharing.

"The NAFSCOB's work is not just about holding meetings and resolving problems with the RBI and government; its job is to make PACS viable, transparent and modern," Shah noted.

Highlighting the critical aspects of cooperative banking reforms, he pitched for strengthening Primary Agricultural Credit Societies (PACS), totalling 1.05 lakh, with only 65,000 functional.

He asked NAFSCOB to focus on implementing technological upgrades, creating opportunities for youth engagement, and focus on increasing low-cost deposits.

On expansion plans, Shah said the government aims to increase the number of district cooperative banks by 50 per cent from the current 300 in the coming years.

The minister urged NAFSCOB to conduct workshops to help PACS adapt to new technologies and recommended studying successful models like Ahmedabad District Cooperative Bank and Gujarat State Cooperative Bank.

The minister asked both state and cooperative banks to keep higher targets for deposits and annual profit from the current level by focusing on raising low-cost deposits in the local area.

Currently, district cooperative banks hold deposits of Rs 4.31 lakh crore, while state cooperative banks have Rs 2.42 lakh crore. The sector generates a combined profit of approximately Rs 4,281 crore.

Shah recommended studying successful models like Ahmedabad District Cooperative Bank and Gujarat State Cooperative Bank as benchmarks for improvement.

Outlining the Modi 3.0 government's approach, Shah stressed that the cooperative sector must "move ahead and work at full speed" while maintaining a balanced approach to structural and legal challenges.

A common software in eight languages has already been implemented to seamlessly link state and district cooperative banks with NABARD, signalling the government's commitment to technological transformation.

There are 34 state cooperative banks, 352 district cooperative banks and 1.05 lakh PACS in the country.