Cooperative banks major lender to agri sector in Odisha

They provide 70% of short-term crop loans and have over 55% share in total farm credit

State-run cooperative banks are far ahead of nationalised and commercial banks in providing credit to agriculture sector in Odisha, the state government said today in the assembly.

“Cooperative banks provide 70 per cent of total short term crop loan and have more than 55 per cent share in all of agriculture credit,” said cooperatives minister, Damodar Rout, while answering a question asked by MLA, Dilip Ray.

The Bharatiya Janata Party (BJP) member had asked about the total credit disbursed by banks in Odisha since 2010-11 financial year to the farm sector.

Between 2010-11 and 2014-15 (upto December 2014), the cooperatives banks disbursed Rs 26,662.23 crore as crop loan and agricultural term loan meant for buying equipment or creating infrastructure for farm produce. In the same period, nationalised and privatised banks lent Rs 22,243 crore to the farmers in the state.

Despite higher advances, the cash deposited with cooperative banks are mere four per cent of total deposits of all banks in the state, the minister said in his reply. These banks are lending more than the deposits, he added.

The Rourkela MLA had sought the reply of the state government regarding parking of government fund at co-operative banks and permitting them for pension and other treasury transactions since they are pioneer in lending credit to the farm sector.

The minister said, the government has already ordered the departments to deposit their cash money with the cooperative banks. However, there are still some stumbling hurdles due to which the order cannot be implemented.

“The additional chief secretary of state finance department has already asked the departments to deposit funds with cooperative banks since they are major lender to the agriculture sector. But the cooperative banks are not functioning as per the treasury code issued by the finance department. They will be allowed to make pension payments and conduct treasury transactions once they comply with the code,” said Rout in his reply.

There are two major players in cooperative banking in the state — Odisha State Cooperative Bank (OSCB) and Odisha State Cooperative Agriculture and Rural Development Bank (OSCARD). Besides, around a dozen district cooperative banks operate at district and small town level to provide lending facility to farmers.