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Punjab govt clears merger of DCCBs with Punjab State Coop Bank

Press Trust of India  |  Chandigarh 

The Cabinet Monday gave its approval to the merger of 20 district central banks (DCCBs) with the State (PSCB) with an aim to strengthen the state's rural credit system and facilitate farmers taking credit from banks.

With the Cabinet giving the green signal to change the state's three-tier Cooperative Credit into two-tier, by amalgamating the DCCBs with the PSCB, the latter has now become a larger entity

This has paved the way for PSCB to play a greater role in the area of rural credit, according to an official

The said the decision had been taken in view of RBI guidelines, which mandate that all DCCBs should have to Risk Weighted Assets Ratio (CRAR) of 9 per cent.

Although at present the DCCBs are adhering to the required CRAR of 9 per cent, there is hardly any space for majority of these DCCBs to enhance their business and to increase their profitability. Without further capital induction the CRAR stipulation given by the RBI cannot be met. Hence, Credit in the State is facing severe hardships.

To meet the CRAR stipulation mandated by the RBI for banks, the had to infuse capital amounting to Rs 307 crore in the past. With this merger, in the state will emerged a financially and structurally stronger entity.

After amalgamation, the single entity will have capital adequacy in the range of 13- 14 per cent, allowing to increase their business while meeting RBI's stipulation of capital adequacy.

It would increase the profitability of the bank and help it to adopt the latest technology and give better to its customers as well as the farmers of the state. There are around nine lakh farmers who are holding Kisan Credit Cards of the in the State and are dependent on credit in the prevalent Cooperative

Notably, the amalgamation of the DCCBs with the would be largely beneficial for ensuring maintenance of Capital to Risk Weighted Assets Ratio (CRAR) on regular basis, enhance the profitability of the Structure in the state, increase regular flow of credit to the farmers, curtail the cost of computerisation and other administrative expenses besides better tax compliance and

Meanwhile, the Cabinet also took a slew of decisions related to various cadres and servicemen in different departments, including approval for filling up of 185 vacant posts of doctors and staff in ESI hospitals and dispensaries.

The filling up the posts will help ensure the best to nearly 12.92 lakh insured persons covered under the (ESI) scheme across the state, said

The Cabinet has also accorded sanction for creation of four Dying cadre posts and inclusion of names of one and three Sub-Inspectors as Sports Persons, to ensure the overall efficacious administration of Punjab police, besides raising the morale of its force.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 22:15 IST