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Primary Agricultural Credit Societies (PACS)

Gs Paper-3

Syllabus: Agriculture



Cabinet approves digitisation of 63,000 Primary Agricultural Credit Societies.

PACS: It is a village-level institution that works directly with rural residents. It encourages agriculturists to save, accepts deposits from them, makes loans to deserving borrowers, and collects repayments.

PACS are the lowest unit in a three-tier structure: The other two tiers — State Cooperative Banks (StCB) and District Central Cooperative Banks (DCCB) — have already been automated by the NABARD and brought on the Common Banking Software (CBS).



  • Computerisation will bring transparency and link all credit societies to a common accounting system
  • Each PACS will get around ₹4 lakh to upgrade its capacity and even old accounting records will be digitised and linked to cloud-based software.
  • Service delivery: Direct Benefit Transfer (DBT), Interest Subvention Scheme (ISS), Crop Insurance Scheme (PMFBY), and inputs like fertilizers and seeds
  • A government statement said that PACS account for 41% (3.01 crore farmers) of the Kisan Credit Card (KCC) loans given by all entities in the country


In the pipeline:

  • Amendments to the model bylaws that would govern the PACS will be placed in the public domain soon (‘Cooperative is a state subject)
  • Amendments to the Multi-State Cooperative Societies Amendment Act, 2002 will also be effected soon
  • Plans to set up a National Cooperative University
  • Pan India legislation to govern the credit societies.



Current Affairs


Inst Links

Practice Questions

Q. Analyse the role of Cooperative societies as an economic driver toward national development. (10M)


Q. With reference to ‘Urban Cooperative Banks’ in India, consider the following statements: (UPSC CSE 2021)

1. They are supervised and regulated by local boards set up by the State Governments.

2. They can issue equity shares and preference shares.

3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d)1, 2 and 3

Answer: B


Q. Consider the following statements: (UPSC CSE 2020)

  1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison of Scheduled Commercial Banks are Regional Rural Banks
  2. One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer: B


 Q. In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities? (UPSC CSE 2011)

(a) Commercial Banks

(b) Cooperative Banks

(c) Regional Rural Banks

(d) Microfinance Institutions

Answer: A

Commercial banks: around  60%

Cooperative banks: 30%


Source: The Hindu