Govt launches Rs 198-cr plan to computerise credit societies

The government has started work on its ambitious Rs 198-crore plan to streamline the finances of cooperative lending institutions that cater to farmers at the grassroots level.

But, authorities say bringing them all under one technology platform is easier said than done.

In his 2021-22 Budget speech, Chief Minister B S Yediyurappa said 5,500 Primary Agricultural Credit Cooperative Societies (PACS) would be computerized to increase their efficiency.

"There are many schemes whose money, for short-term loans running into thousands of crores, goes to the Apex Bank and then the District Central Cooperative Banks and then to the PACS. The PACS will then disburse the loans to farmers. Now, the farmer can have more than one account in the PACS, which is against the rules. Computerization can help prevent such frauds," Principal Secretary (Cooperation) Tushar Girinath told DH, on the benefit of computerizing the PACS.

"Since they are not computerized, reconciliation of accounts is a problem," he added.

Farmers largely depend on cooperative institutions for their credit needs. Karnataka has 21 District Cooperative Central (DCC) Banks and there is the Karnataka State Co-Operative Apex Bank. The state government is looking at ways in which a common technology interface can be provided for DCC banks and the PACS.

"The problem is that the software is not uniform across DCC banks," Girinath said. "There are 3-4 different systems running across all DCC banks. We can't seem to have one uniform system now," he added.

Girinath said the government will first get a consultant onboard to identify the requirements. "Then comes computerization," he said. "We're in the consulting process now."