HR Policy For PACS-Draft Report

NAFSCOB: HR Policy for PACS
Report of
THE COMMITTEE TO FORMULATE
HUMAN RESOURCE POLICY FOR PACS
October, 2018
NATIONAL FEDERATION OF STATE COOPERATIVE BANKS

(NAFSCOB)
J.K. CHAMBERS, PLOT NO. 76, SECTOR-17, VASHI,
NAVI MUMBAI – 400 703, INDIA
Phone: 91-22-27892741/27892697/27892738. Fax: 91-22-27892604
E-mail: nafscob@nafscob.org
Website:http://www.nafscob.org
CONTENTS
Sl. Particulars Page Nos.

No.
Acknowledgements
1 Introduction 1-6
2 Methodology 7-11
3 Status of Primary Agricultural Credit Societies (PACS) in 12-44
the States visited by the Committee
4 Human Resource (HR) Policy: Recommendations 45-67
5 Mechanism for Implementation 68-70
6 HR Policy as applicable to states with 2-tier Structure 71-76
7 Computerization of PACS 77-82
8 Epilogue 83-90
ACKNOWLEDGMENTS
The Primary Agricultural Credit Societies (PACS) have been in existence for more
than a century in our country. The daily affairs/ operations of PACS were managed, in the
early years, by persons on voluntary basis – mostly the persons holding office in the
management committees of PACS. They were called Secretaries. Later the concept of Paid
Secretary came into existence with persons being hired and paid to run the day to day affairs
of the PACS. The first ever systematized recruitment to the post of Paid Secretary came in
the wake of “Half a million job scheme” implemented in the seventies.
Pursuant to the suggestion made by National Federation of State Cooperative Banks

(NAFSCOB), National Bank for Agriculture and Rural Development (NABARD) constituted
a Committee for Assessment of Human Resources for Short Term Cooperative Credit
Structure (STCCS) in the Post CBS Environment in July 2016 under the Chairmanship of
Shri Amalorpavanathan, Deputy Managing Director, NABARD. The Committee submitted
its report on 10-10-2017, but the Terms of Reference was limited to assessing the human
resource requirement of State Cooperative Banks (SCBs)/District Central Cooperative Banks
(DCCBs) in the changing banking scenario, with special reference to post Core Banking
Solutions (CBS) banking operations but not the requirement of PACS.
With a view to professionalizing the PACS staff to meet the challenges in the rural
credit scenario and to meet the expectations of the community and the sector, pursuant to the
decision taken by the Board of Directors, NAFSCOB, constituted a Committee to formulate
“Human Resource Policy” and suggest guidelines for PACS. NAFSCOB being the provider
of a national level platform to the SCBs and through them to the STCCIs, is in a unique
position to provide a frame work to these institutions to work with. Indeed, it is the mandate
of NAFSCOB to strengthen the STCCS in the country. Introducing HR Policy in the most
vital link of STCCS network at PACS level will be a major initiative to strengthen PACS
structure and in turn the entire STCCS. The Committee is grateful to Shri Dileep Sanghani,
Ex.M.P./Ex. Minister, Gujarat, Chairman, NAFSCOB, Shri Bhima Subrahmanyam,
Managing Director, NAFSCOB and entire Board of NAFSCOB for taking very important
step of forming of the Committee for preparation of HR Policy for PACS n India. The
Committee is indebted to NAFSCOB for entrusting task of preparation of HR Policy for
PACS.
The Committee and NAFSCOB sincerely thank Dr. Harsh Kumar Bhanwala,
Chairman, NABARD for encouraging to take up the study to formulate HR Policy for PACS.
Further, the Committee also acknowledges with thanks for finanacial support extended by
NABARD, Head Office under Cooperative Development Fund (CDF).
The Committee extends heartfelt thanks to special invitees Shri Tusharkanti Panda,
former Managing Director of Odisha SCB and Dr. Nethi Muralidhar, Managing Director,
Telangana SCB for their excellent contribution to the present report.
The Committee conveys its gratitude to the State Governments of Andhra Pradesh,
Assam, Jharkhand, Kerala, Maharashtra, Meghalaya, Odisha, Telangana and Uttar Pradesh
(UP) who have participated in the consultative meetings held in the states. The Committee
also thanks the managements and the staff of all the State Cooperative Banks, DCC Banks,
PACS, Large Size Agricultural Multi-Purpose Cooperative Societies (LAMPCS) of Andhra
Pradesh, Assam, Odisha, UP, Meghalaya, Kerala, Maharashtra, Jharkhand and Telangana for
their support in organizing the consultative meets and active participation in the deliberations
and for providing information and inputs which has helped the Committee in drafting the
report.
The Committee conveys its special thanks to Shri Mukut Bihari Verma, Hon’ble
Minister for Cooperation, Govt. of UP, Sri Narendra Kumar Singh, IAS, Registrar of
Cooperative Societies, UP, Sri V.V. Anaskar, Chairman, Board of Administrators,
Maharashtra SCB, who have interacted with the Committee Members and provided their
valuable suggestions. The Committee records its appreciation and thanks to all the
Employees Unions, Associations of PACS, DCCBs and SCBs in different states, individuals
and cooperators for their valuable inputs. The Committee thanks Bankers Institute of Rural
Development (BIRD), Lucknow and Manpower Development & Management Institute
(MDMI), Shillong, Managing Director, DCCBs Association of Andhra Pradesh and
Telangana States, Hyderabad whose functionaries have participated in the consultative
meetings and provided their suggestions and views.
The Committee acknowledges and conveys gratitude for giving their valuable
comments, suggestions and views on ToR, to the Directors of various training institutes viz.,
Dr. T. Paranjothi, Director, ACSTI, Kerala, SHIKHAR Training and Research Institute,
Maharashtra State Cooperative Bank Ltd., Vashi, Navi Mumbai and Sri B. K. Thadani
Director, MDMI, Guwahati, Sri S.S. Brar, Punjab ACSTI, Jullundur, Ms. Rajeshwari,
Director, APCOB-CTI, Hyderabad, Sri P. Ramanjaneyulu, CEO, Kurnool DCCB, AP. The
Committee thanks Sri Tapan Kumar Bose, General Secretary, All India Cooperative Bank
Employees Federation (AICBEF) who has communicated his views on the ToR.
Similarly, the Committee is grateful to Sri PVA Ramarao, Ex. MD, NABARD, Dr.
J.B. Dutta, Former MD, Meghalaya CAB, Sri B.K. Swamy, Ex. MD, APCOB, Hyderabad,
Sri K.R. Sahu, Retd., CGM, Madhya Pradesh SCB Ltd., Sri S.K. Gupta, Former General
Manager, Madhya Pradesh, SCB, Sri Rajiv Padia, R. Padia Associates, Ahmedabad, Smt.
Usha P.T, DGM, NABARD-RO, Kerala, Shri J C Mahanta. GM/OIC and Shri B. K Dash,
GM, NABARD, RO, Ranchi, Jharkhand who have given their views and suggestions to the
Committee. Committee places on record its thanks to Sri Balasubramanyan G. Iyer, Regional
Director, International Cooperative Alliance Asia Pacific for his inputs. Committee also
extends its gratitude to all those who have responded their views and suggestions to
committee email nafscob.pacshrpolicycom@gmail.com.
The Committee extends its thanks to Dr. N. Muralidhar, Managing Director, TSCAB,
staff of TSCAB, Head Office, Hyderabad, Sri M.R. Srinivasa Rao, Director and the staff of
TSCAB-CTI, Rajendranagar, Hyderabad who have extended their cooperation and provided
infrastructure support to the Committee and facilitated drafting the report.
Committee thanks Sri Ch. Siva Koteswara Rao, Rapporteur for the metriculuous
classification and recording of the information received from various quarters and in helping
draft report preparation. Committee also thanks Sri V. Sai Arun, Hyderabad who has
provided Secretarial support to the Committee. The Committee thanks Dr. J S Hanamashetti,
Dy. Director, NAFSCOB, Convener for the excellent coordination and support rendered.
Once again committee place on record and convey its thanks to Sri Bhima
Subramanyam, Managing Director, NAFSCOB for the excellent support and cooperation
extended right from the formation of the committee to finalization of the committee report.
“The Cooperative movement is such a model which can provide a

successful alternative to socialism and capitalism”
- Narendra Modi
Hon‟ble Prime Minister of India
1. INTRODUCTION
“There is a common perception around the world that the original rationale for
cooperatives has ebbed away, and that in today’s complex, globalizing world,
there is no meaningful role for cooperatives. That is clearly a misconception.
Indeed, I will argue to the contrary – that precisely because today’s world is
complex and globalizing, there is a more meaningful role for cooperatives to
play ….”
– Dr. Duvvuri Subbarao, Former Governor, RBI.
1.1. With an extensive network of nearly one-lakh outlets and with an unmatched
outreach of 12 crore plus members, touching the live of most of the farm
households spread across the length and breadth of the country, the Primary
Agriculture Credit Societies (PACS) have an important place in the comity of
rural financial institutions. With an annual disbursement of ₹2 lakh crore short
term agricultural credit, PACS play an important role not only in the
development of the agriculture sector but also in the economic development
of the country. PACS facilitate financial inclusion in a big way as they serve a
vast majority of small and marginal farmers. They are the first and last resort
for many a poor farmer in rural areas.
1.2. The PACS have been in existence for more than a century in India. The
operations of PACS were managed, in the early years, by persons on a
voluntary basis – mostly the persons holding office in the management
committees of PACS, called Secretaries. Later the concept of Paid Secretary
came into existence with persons being hired and paid to run the day-to-day
affairs of PACS. The first ever comprehensive and systematized recruitment
to the post of Paid Secretary came in the wake of “Half a Million Job Scheme”
implemented by the Government of India in the seventies.
1.3. PACS have made a significant contribution to the growth story of the country,
particularly to the green revolution by extending necessary credit support to
small and marginal farmers and weaning them away from the clutches of
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informal sources of credit and money lenders. Over the last decade and a
half, the loan disbursement by PACS has recorded an exponential growth.
While the loan disbursement at the turn of the 21st century in 2000-01 was
₹25,698.31 cr., it had gone upto ₹2,00,678.39 lakh cr. during 2016-17. In
other words, loan disbursement by PACS has increased by almost 8 times,
though their market share has seen a decline. It is however, needs to be
appreciated that a vast majority of farmers particularly small and marginal
farmers depend on PACS for their credit needs. PACS have also raised
significant amount of deposits from their members. Professionalization and
adoption of technology in their operations would have accelerated their
progress. The outstanding deposits of PACS as at the end of FY 2016-17
were ₹1,15,884.20 lakh cr. It should however, be noted that PACS in Kerala
alone accounted for bulk of these deposits. Considering the vast network and
very large outreach PACS could be considered as a sleeping giant with a
huge potential and lot of opportunities if the issues which are impeding their
growth are addressed effectively without further loss of time.
1.4. The “Revival Package” formulated and implemented on the basis of

recommendations of the Prof. Vaidyanathan Committee Report (2005),
among others suggested several measures for strengthening of Short-Term
Cooperative Credit Structure (STCCS) including professionalization of Human
Resources (HR). Accordingly, NABARD took a pro-active initiative and
constituted a Working Group under the Chairmanship of Shri S.K. Mitra, the
then Executive Director, NABARD to formulate and suggest Human Resource
Policy for State Cooperative Banks (SCBs) and District Central Cooperative
Banks (DCCBs). Based on the recommendations of Mitra Committee Report
(2009), NABARD issued guidelines to SCBs and DCCBs on the H R policy
including, linking of business levels with staff strength, prescribing
qualifications and other eligibility criteria for staff at various levels, transparent
process for recruitment, promotion, transfers etc.
1.5. Further, pursuant to the suggestion made by NAFSCOB, NABARD

constituted a Committee for Assessment of Human Resources for Short Term
Cooperative Credit Structure (STCCS) in the Post CBS Environment in July
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2016 under the Chairmanship of Shri R. Amalorpavanathan, Deputy

Managing Director, NABARD. The Committee submitted its report in October,
2017. The Terms of Reference of the Committee was to assessing the
human resource requirement of only SCBs/DCCBs in the changing banking
scenario, with special reference to the post CBS banking operations.
1.6. The scope of the Mitra Committee and Amalorpavanathan Committee,

however, did not include PACS. As such, save for a few sporadic initiatives in
certain states discussed later in the report, there are no guidelines till date to
PACS in the country on HR policy frame work, though huge amount of credit
with refinance support from NABARD/SCBs/DCCBs is provided to farmer
members through them. This remains a major lacuna in the system, even a
century after their emergency in the rural credit scenario.
1.7. The Unique Selling Point (USP) of PACS is that, while PACS can do all the
things that a regular bank branch can do but, bank branches cannot provide
all services that a PACS can provide to their customers. Members of PACS
can avail services right from purchase of seeds, fertilizers, pesticides, access
technology, credit, post-harvest support, marketing of produce and so on. By
virtue of being a member owned and member-controlled institutions, PACS
understand the needs of their members better than any other institutions.
They have the potential to be the hub of all economic activities in rural areas.
PACS can also be a link between rural and urban markets and bridge the
divide between these two entities.
1.8. PACS can be an effective mechanism for securing true financial inclusion by
providing all services to their members and reach the unreached effectively
with their extensive network. Similarly, the primary cooperatives could be
effective agencies for channelizing programs of Central and State
Governments, NABARD, Cooperative Banks etc., as they are rooted in the
remote areas of the country serving the community. Nearly 77% of the PACS
members include small and marginal farmers and other weaker sections.
Hence, PACS could and should play an active role in doubling farmers‟
income as envisioned by the Government of India.
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1.9. It is in this context, the National Federation of State Cooperative Banks

(NAFSCOB), in pursuance of its mandate of strengthening of the STCCS in
the country, deliberated on the issue in the Board Meeting held on 13th March,
2018 and decided to setup a Committee to suggest HR policy for PACS in the
country so as to address the felt need and the primaries effectively. Further,
NAFSCOB has also consulted NABARD for guidance and support in the
matter. Based on the deliberations of the Board Meeting and factoring in the
suggestions received from NABARD, NAFSCOB has constituted the
Committee to formulate “Human Resource Policy” for PACS in the country,
drawing expertize from the sector across different regions of the country. The
notification dated 16-03-2018 issued in this regard is given as Annexure-I.
The composition of the Committee is as under:
1. Shri Konduru Ravinder Rao : Chairman

Director, NAFSCOB &
President, Telangana SCB
2. Shri P. Mohanaiah : Member
Former Chief General Manager, NABARD
3. Smt. Ranjana Chopra, IAS : Member
Commissioner-cum-Secretary
Cooperation Department,
Government of Odisha
4. Thiru R Palaniswamy
Registrar of Cooperative Societies : Member
Tamil Nadu
5. Shri Rabi Kant Singh : Member
Managing Director, Uttar Pradesh SCB
6. Dr. S. K. Batish : Member
Managing Director, Punjab SCB
7. Shri O.E.J. Nongbri
Managing Director, Meghalaya SCB : Member
8. Shri.R.L.Bayas
Managing Director,Maharashtra SCB
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9. Shri D Ramesh Sinha : Member

Former Chief General Manager
Erstwhile APCOB
10. Shri Bhima Subrahmanyam
Managing Director,NAFSCOB :Permanent Invitee
1.10. Terms of Reference of the Committee:

The Committee has been given specific ToR as indicated below to address
the HR needs of PACS comprehensively:
i. To study the existing Act provisions, instructions, guidelines and orders of the
State Governments, including the report submitted by the committee
appointed by Govt. of Andhra Pradesh, NABARD, RBI on Recruitment,
Promotion, Transfer etc. of staff in PACS in different states and suggest a
rationalized policy framework for the same including study of cadre system in
PACS (requisite qualifications at different cadres), pay structure etc.
ii. To suggest norms for staff strength in different categories of PACS vis-a-vis
volume of credit business and other services being offered, profitability,
operating expenses etc. The on-going initiative of NABARD for converting
PACS into Multi Service Centers may also be factored in while suggesting the
HR Policy for PACS.
iii. To study the existing Special Bye-laws and suggest uniform service rules for
all the cadres in consonance with the Act provisions, NABARD guidelines etc.
iv. To study the present status of Computerization, scope and the need for
computerization in PACS and likely impact of it on the staff strength.
v. To suggest a well-defined career path for the PACS staff.
vi. To study the training systems obtaining for PACS staff and suggest a well-
defined training policy to meet the emerging business needs of PACS and to
take care of the career progression of the staff.
vii. To study the need and options for outsourcing and identify the activities which
could be outsourced.
viii. To suggest an appropriate mechanism for implementing the suggested HR
Policy for PACS and ensure its compliance on an on-going basis.
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ix. Study the best practices adopted by the PACS in the following States and
suggest measures for strengthening of PACS:
(a) Central - Uttar Pradesh; (b) North - Jharkhand; (c) North East- Meghalaya;
(d) West- Maharashtra; (e) East- Odisha; (f) South- Kerala.
1.11. The Committee, accordingly, held consultation meetings with all-important

stakeholders in different states, received suggestions from unions,
associations, and individuals regarding the proposed HR Policy, which is
discussed in detail under Chapter-2. Status of PACS in the states visited by
the committee is presented in Chapter-3. Further, factoring in the
deliberations of the consultation meetings and the feedback received from
different stakeholders. The Committee formulated the HR Policy for PACS
and the same is presented in the Chapter-4. Some of the smaller states and
also states of North Eastern Region (NER) have the 2-tier STCCS. In some
states like Himachal Pradesh it‟s a mixed structure. Taking cognizance of the
structure, the Committee customized its recommendations to suit the 2-tier
STCCS and the same is presented in Chapter-6.
1.12. Howsoever noble or howsoever good the recommendations may be, what is
crucial is their successful implementation. Accordingly, the Committee
suggested the implementation mechanism in Chapter-5 to ensure that
recommendations are implemented properly and taken to the logical end so
as to realize the objectives of the Committee and the larger mandate of PACS
and STCCS.
1.13. One of the important reasons for the decline of importance of PACS during
the last couple of decades was non-adoption of technology. The issues
relating to computerization of PACS has been briefly examined by the
Committee and the same are presented in Chapter-7.
1.14. Though ToR of the Committee are quite comprehensive touching different
aspects of PACS‟ functioning, the Committee felt that there is a need to
examine a few other, important and complementary issues which need to be
addressed simultaneously for making the PACS viable and vibrant community
owned financial institutions. Some of these issues are discussed in the
Chapter-8 entitled Epilogue.
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2. METHODOLOGY
2.1. As observed in the introduction, with nearly one lakh PACS spread across 29
States and 3 Union Territories with regional variations, it was rather difficult for
the Committee to decide on the methodology to identify the states for study
and consultations. However, while finalizing the Terms of Reference (ToR)
(Annexure-I) of the Committee itself the issue was elaborately deliberated.
Based on these deliberations and suggestions received it was decided that
the Committee should visit Uttar Pradesh in the North, Meghalaya in the North
Eastern Region, Odisha in the East, Kerala in the South, Jharkhand in the
Central Region and Maharashtra in the West to have a fair and proper
representation of geographical mix of the societies in the country. In each of
these states, it was decided that, the Committee would hold consultations with
the major stakeholders including the State Governments, NABARD, State
Cooperative Banks, District Central Cooperative Banks, PACS and
representatives of Unions and Associations of employees at various levels.
Further, it was also decided that the Committee should visit a few societies in
these states to have a firsthand feel of the ground level situation of functioning
of PACS.
2.2. State Level Consultative Meets:

Accordingly, in order to elicit the opinions and suggestions of the
stakeholders, consultative meetings were held in various states as per the
ToR. The States selected for field visits/studies and consultative meetings
are representative of different regions of the country. The STCCS selected
represent a combination of very strong and advanced states and STCCS; to
moderately strong and; weak STCCS. Keeping in view the peculiar
circumstances of the North Eastern Region and being a 2-tier STCCS,
Meghalaya was visited for study and consultation. Further, to have a better
understanding of the region, discussions were held with the CEOs of Assam
SCB and Arunachal Pradesh SCB on the position of PACS obtaining in these
states. Stakeholders from Andaman & Nicobar, Andhra Pradesh, Chattisgarh,
Delhi, Haryana, Kerala, Karnataka, Madhya Pradesh, Odisha, Punjab,
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Telangana, Uttarakhand and Uttar Pradesh were also invited to the committee
meeting at Odisha State Cooperative Bank (OSCB), Bhubaneshwar whose
opinions and inputs were elicited. The first meeting of the committee was
held at Telangana State Cooperate Apex Bank (TSCAB), Hyderabad on 11-
04-2018 to discuss the methodology and other details of the study.
The details of the State Level Consultative Meetings in different regions of the
country are as indicated below:
Table No. 2.1. The schedule of Consultation Meets

Sl. No. Region State Date
1 East Odisha 27-04-2018
2 Central Uttar Pradesh 16-05-2018
3 North East Meghalaya 23-05-2018
4 South Kerala 11-06-2018
5 West Maharashtra 15-06-2018
6 North Jharkhand 18-06-2018
In addition, the Committee also had a special consultation meet for the states
of Andhra Pradesh and Telangana during June, 2018.
2.3. The Consultation Meetings were attended by the Presidents, Directors, CEOs
and Staff of the State Cooperative Banks; DCC Banks, PACS, FSCS,
LAMPCS etc. Officials of the Cooperative Departments of the respective
State Governments, RCS, officials of NABARD; officials from Training
Institutions of STCCS; representatives of Staff Unions and Associations who
took part in these deliberations and presented their views and suggestions on
the ToR of the Committee. The list of participants and proceedings of all the 8
consultative meetings are furnished in the Annexures - 2.1 to 2.8.
2.4. Visits to Primary Societies:

The Committee visited DCCBs, PACS, FSCS, LAMPCS in different states as
part of field studies to obtain the firsthand information about functioning of
PACS in these states. While selecting the primary societies for field visits,
care was taken to visit some of the societies which were computerized so as
to assess their HR requirements and also capacity building requirements in
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the post computerized environment. (In the report the word „socities‟ refers to
PACS, LAMPCS, FSCS, GPCS and other primary societies). The findings of
these visits have been incorporated appropriately in the report. The details of
PACS and other societies visited are as under:
a. Odisha: Kandarpur FSCS, Cuttak District, Sisupalgarh SCS, Khorda
District.
b. Uttar Pradesh: Barabanki DCCB, Faizabad DCCB, Jeyoli PACS,
Nawabgunj PACS, Barabanki District and Kisan Seva Sahakari, Samiti,
Pilkhawa, Faizabad District.
c. Assam: Champaknagar GPSS Ltd., Kamrup District.
d. Meghalaya: Mylliem Service Cooperative Society.
e. Kerala: Ernakulam DCCB, Mookkannoor Service Cooperative Bank
Ltd., and Palliyakkal Service Cooperative Bank Ltd, Ernakulam District.
f. Jharkhand: Namkum LAMPCS, Ranchi District and Tatisilwai
LAMPCS, Ranchi District.
2.5. Feedback from major stakeholders:

To elicit feedback, suggestions and opinions from various stakeholders on the
ToR of the Committee, the ToR was placed in the public domain on the
websites of NAFSCOB and various State Cooperative Banks. In addition, the
Committee has also sought structured information on the STCCS from State
Cooperative Banks, District Central Cooperative Banks etc., (Annexure-3).
Information relating to PACS visited was collected through pro-forma
circulated to all the concerned (Annexure-4). NAFSCOB has also invited
suggestions and views from all the stakeholders to be sent to a specially
created eMail I.D for the purpose (nafscob.pacshrpolicycom@gmail.com).
Information and suggestions received from different stakeholders have been

analyzed critically and incorporated in the report suitably. A table showing the
receipt of information from different stakeholders is placed as Annexure-5.
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2.6. Secondary Data:

The Committee made use of the secondary data available in the published
reports and websites of RBI, NABARD, NAFSCOB, SCBs etc. The statistics
on STCCS being published by NAFSCOB happens to be the only source of
information on PACS in the country, which is being relied upon by the
governments, and also NABARD. While NAFSCOB publishes the statistical
information furnished by the different SCBs, the integrity of the information
cannot be crosschecked or authenticated in the absence of any other source
of verifiable information on PACS. Information on PACS was available only
upto 2015-16 in NAFSCOB website. (NAFSCOB, however, published
information on PACS for the year 2016-17, recently in August, 2018). No
information was available in respect of PACS in Jharkhand as the Jharkhand
State Cooperative Bank was yet to become a member of NAFSCOB. Further,
important information on governance, capital adequacy, NPAs etc., was not
available in respect of any of the states.
The non-availability of reliable data on PACS in the country is a matter of

major concern. There seems to be no improvement in the situation even 13
years after publication of the report of the Task Force on Revival of Rural
Cooperative Credit Institutions in the year 2005 (Prof. Vaidyanathan
Committee). The Committee is tempted to quote from the Report of the Task
Force verbatim. “…..The Task Force noted that NABARD does not
maintain any data base on PACS. The only source is the NAFSCOB
compilation, based on information provided by the State Governments
and the CCS. Hence, the Task Force has used the data published by
NAFSCOB as far as PACS are concerned. There are, however,
considerable doubts about how complete their coverage is, whether the
data are up-to-date and whether there is any attempt at validating the
data. The data on PACS, therefore, need to be used with caution and
then too should be limited to getting a broad picture of their
characteristics” *. The Committee was constrained to use the secondary
data on PACS, as available in the NAFSCOB website for want of any other
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reliable source of information. The need for developing a comprehensive,

authentic and reliable data base on PACS requires hardly any emphasis.
* Report of the Task Force on Revival of Rural Cooperative Credit Institutions – 2005
(3.08 of pages 14 & 15).
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3. Status of Primary Agricultural Credit Societies (PACS) in the

States visited by the Committee
“You will learn more about a road by travelling it rather than by

consulting all the maps in the world” - Anonymous
3.1. As discussed earlier in Chapter-2, on methodology the Committee held

consultative meetings in six states covering different regions of the country.
The Committee made detailed presentations on the ToRs in these meets and
sought information and suggestions from participants on each of the ToRs.
The status of PACS in each of the states visited under different parameters
vis-à-vis the total number of PACS in the country and other related issues
obtaining in these states are furnished in the ensuing paragraphs:
3.2.1. Odisha: The status of PACS in the state under some of the important
parameters and vis-à-vis the all India position is given below:
Table No. 3.1. (FY 2015-16)
Sl. No. Particulars Pan India Odisha As Percentage
of Pan India
1 No of PACS 93,367 2,701 2.89

2 Membership 12.73 cr 65.62 lakh 5.18
3 Borrowing Members 4.62 cr 29.37 lakh 6.35
4 Share Cap (₹) 12,280 cr 534.9 cr 4.34
5 Deposits (₹) 1.01 lakh cr 1531.8 cr 1.53
6 Borrowings (₹) 1.12 lakh cr 16605.8 cr 14.8
7 Loans Disbursed (₹) 1.80 lakh cr 5696.9 cr 3.16
8 Loans O/S (₹) 1.58 lakh cr 5387.0 cr 3.40
9 Staff Strength 1.17 lakh 7021 6.0
10 PACS in Profits 45,522 739 1.60
11 PACS in Losses 37,112 1861 5.01
12 Loans O/S/ per PACS (₹) 1.69 cr 1.83 cr 108.28
13 Loans O/S/ per Employee (₹) 1.35 cr 0.77 cr 57.04
14 Average Loan Size (₹) 0.34 lakh 0.18 lakh 52.94
Source: NAFSCOB
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 It may be observed from the above that PACS in Odisha constituted 2.89% of
the total number of PACS in the country with 5.18% of total membership of
the country and 6.35% of borrowing members indicating better member
coverage in the state.
 The average membership per PACS in Odisha was 2429 as against the all
India average of 1363. Similarly, average borrowing members per PACS in
Odisha was 1087 as against the all India average of 495.
 While borrowings constituted 14.8% of the total borrowings of the STCCS in
the country, loans outstanding constituted only 3.40% of the total loans
Outstanding of the STCCS in the country indicating the need for augmenting
own resources.
 The per employee loans outstanding at ₹0.77 cr was 57% of the per
employee loan outstanding at ₹1.35 cr. at the all India level.
 While the average staff strength per PACS at 2.59 in the state was higher
than all India average of 1.25, there were instances of CEO of a PACS
handling the affairs of more than one PACS.
 As against the all India average of 48.75% of profit making PACS, in Odisha,
the profit making PACS accounted for only 27.36% of total PACS in the state.
3.2.2. Initiative on HR Policy for PACS: The state of Odisha has adopted HR
Policy for Primary Societies with effect from February, 2011 vide Memo No.
XX-3/03(Pt.)-2858 /Bank-10/Dt: 07-02-2011 of Registrar of Cooperative
Societies, Government of Odisha.
3.2.3. Salient features of the HR Policy were as under:
 PACS, Service Cooperative Societeis, FSCS have been categorized into 4
categories based on their business turnover and determined approved staff
strength accordingly.
 Staff of primaries has been categorized into 5 Grades: Grade-I –
Secretary/CEO; Grade-II – Asst. Secretary; Grade-III -
Accountant/cashier/Collection Supervisor/Ledger Clerk/salesman-1; Grade-IV
– Peon; Grade-V – Watchman.
 Different staff strengths have been fixed for each business category.
13 | P a g e
3.2.4. The details of category of societies and sanctioned staff strength were
as under:
Table No. 3.2
Sl. Business Level Category Staff Total
No. of Society Grade-I Grade-II Grade-III Grade-IV Grade-V
1 6.00 cr or above A 1 1 1 1 1 5
2 4.00 Cr or above B 1 0 1** 0 1** 3
less than 6.00 Cr
3 3.00 Cr or above C 1 0 0 0 1** 2
less than 4 Cr
4 1 Cr to less than 3 D 1 0 0 0 1** 2
Cr
Note: * Grade-I – Secretary/CEO; Grade-II – Asst. Secretary; Grade-III -
Accountant/cashier/Collection Supervisor/Ledger Clerk/salesman-1; Grade-IV – Peon; Grade-
V – Watchman.
** Asst. Secretary cum Accountant; and Peon/Watchman.
For the purpose of salary etc., Grade-II and Grade-III are treated as Grade-II only. Similarly,
Grade-IV and V are treated as Grade-IV only.
3.2.5. LAMPCS:
Staff Strength of LAMPCS:
LAMPCS in Odisha, however, have uniform staff strength irrespective of
business turnover. The sanctioned staff strength for LAMPCS was as under:
Table No. 3.3. Staff strength at Headquarters:

Sl. No. Designation of the post Strength
1 Chief Executive Officer 1
2 Accountant 1
3 Store Keeper-cum-Salesman 1
4 Peon/Watchman 1
Table No. 3.4. Staff strength at branches:

Sl. No. Name of the Post Strength
1 Branch-in-charge 1
2 Store Keeper-cum-Salesman 1
3 Peon/Watchman 1
14 | P a g e
3.2.6. Appointing Authority:

 The Managing Committee of the primary society is the competent authority for
appointment of the employees subject to the approval of the Divisional DRCS
/ Circle ARCS concerned.
 For appointment to any post, there shall be an appointment committee
consisting of the following members:
Table No. 3.5.
Sl. No. Designation Appointment
Committee
1 President Chairman
2 Vice President Member
3 One elected member of C.O.M Member
4 Branch Manager of the CCB Member
5 Representative of RCS Member Convenor
 If the Management vested with the RCS(O) the Appointment Committee

would be constituted as follows:
Table No. 3.6.
Sl. No. Designation Appt. Committee
1 ARCS Chairman
2 Branch Manager of the CCB Member
3 *M.I.C of the PACS Member Convenor
4 Inspector of CS Member
*MIC – Member In-charge Committee
The Managing Committee of a Primary Society will appoint employees on the
recommendations of the Appointment Committee.
3.2.7. Method of Selection for Direct Recruitment – Staff:

 Vacancies to be filled are notified to the concerned Employment Exchange,
advertised in widely circulated local newspapers and displayed on the Notice
Boards of the Society; it‟s financing Bank/Local GP/Block/Tahasil /sub-
Collector office.
 Preference is given to the candidates belonging to the area of operation of
PACS/LAMPCS concerned.
15 | P a g e
 Candidates have to appear for a written test followed by viva voce tests.
 If suitable candidates are not available in the area of operation of the
PACS/LAMPCS, candidates belonging to panchayat samiti/ District will be
considered.
 Minimum age is 21 years and maximum age is 32 years.
 Upper age limit is relaxed upto 35 years in case candidates belonging to
SC/ST/OBC categories including socially and economically Backward
Classes, Ex-Servicemen and persons employed in Coop. Societies.
3.2.8. Grade-I Chief Executive:

 Selection for the post of Chief Executive of the PACS/LAMPCS is done by the
Appointment Committee on the basis of academic career of the candidates on
a 100-point scale.
 Educational qualification – Graduation from a recognized University.
However, in case of promotion, the Grade-II employees of the society with
minimum qualification of Intermediate or +2 Arts, Science or Commerce and
with minimum of 5 years‟ experience in the Grade-II post having clean service
records are also considered eligible.
 The candidates are awarded points on the basis of percentage of marks
secured in the examinations as HSC, +2, +3/Graduation.
 However, additional points are awarded to the candidates having additional
qualification in the following manner:
i. M.A/M.Sc./M.Com./MCA/MBA/LLM – 5 points.
ii. Higher Diploma in Coop. management (HDCM) – 5 points.
iii. BBA/BCA/LLB/Dip. Coop. Management-3 points.
iv. Knowledge in Computer Application from a recognized Institute-5
points.
16 | P a g e
3.2.9. Grade-II Post:

 Asst.Secretary /Accountant/ Branch-in-Charge/ Cashier/Collection supervisor/
Ledger Clerk/ Salesman/ Store Keeper-cum-Salesman.
 Educational qualification: Intermediate /+2- Arts, Science or Commerce.
However, in case of promotion, the Grade-III employees of the society with
minimum qualification of Matriculation and with minimum of 5 years‟
experience in the Grade-III post having clean service records would be
eligible for consideration.
3.2.10. Grade-III Post:

Peon/ Watchman - Educational qualification:
 Class 8th Pass.
 The post of Grade-III shall be filled-up by direct recruitment.
 Rehabilitation Appointment may be applicable as per the Rules prescribed by
State Govt. For their employees time to time.
 Superannuation Age is 60 years.
3.2.11. Pay & Allowances:

 RCS (O) is the authority to fix the pay and allowances of the employees from
time to time.
 6th Pay Commission with reference to ORSP rules 2008 has been
implemented w.e.f Dt. 30.01.2014.
3.2.12. Societies are, however, are required to comply with the following
norms:
 Cost of Management should not exceed 2% of the working capital or
 30% of real income (net interest income + other income).
17 | P a g e
3.2.13. The present scale of Pay for PACS employees:

Table No. 3.7.
Grade Pay Grade Pay
I 5200-20200 1900
II 4440-7440 1650
III 4440-7440 1300
3.2.14. Medical Allowance: @ 5% of basic pay not exceeding ₹150/- PM subject to

“Capacity to pay” by the Society as may be fixed by the Registrar.
3.2.15. Service Records:

a. Society shall maintain records of service of every employee at the Society
office in the Service Book.
b. The President of the Society shall maintain Performance Appraisal Report of
the Secretary and for the other employees. The Secretary of the society shall
maintain such report for each year.
3.2.16. Thus, the HR Policy for primary societies in Odisha has laid down the
procedures and guidelines for constitution of Appointment Committee, Mode
of Appointment, Mode of Selection for Direct Recruitment, Educational
Qualifications for each category of staff, Promotion Procedure, Pay Scales
and Allowances (however, to be paid in conformity with NABARD‟s capacity
to pay guidelines), Retirement Age, Authority for Disciplinary Proceedings,
Incentives for acquiring Professional Qualifications. The staff of
PACS/LAMPCS is appointed by their respective managements. There is no
Common Cadre for the staff of PACS/LAMPCS. Currently, the pay scales as
per 6th Pay Commission of Government of Odisha are being followed by the
staff of PACS/LAMPCS (w.e.f. 30-01-2014) as detailed above.
3.2.17. The Cooperatives enjoy a large share in the agriculture finance in the state.
The State Government provides interest subsidy to SCB in advance. Such
procedure relieves the STCCS from financial stress on account of delayed
reimbursement.
18 | P a g e
3.2.18. Supervision: PACS are inspected by DCCB periodically.
3.2.19. Training and Capacity Building: The State Cooperative Bank has two
training institutes - Odisha Society for Cooperative Education, Research and
Training (OSCERT) and Agriculture Cooperative Staff Training Institute
(ACSTI).
3.3.1. Uttar Pradesh:

The status of PACS in the state of Uttar Pradesh vis-à-vis all India position
was as follows:
Table No. 3.8. FY – 2015-16
Sl. No. Particulars Pan India Uttar Pradesh As Percentage of

Pan India
1 No of PACS 93,367 8,929 9.56
2 Membership 12.73 cr 27.48 lakh 2.15
4 Share Cap (₹) 12,280 cr 192.47 cr 1.56
5 Deposits (₹) 1.01 lakh cr 6,800 cr 6.73
10 PACS in Profits 45,522 4,536 9.96
11 PACS in Losses 37,112 1,968 5.30
12 Loans O/S/PACS (₹) 1.69 cr 20.07 lakh 11.83
13 Loans O/S/Employee (₹) 1.35 cr 20.28 lakh 14.81
Source: NAFSCOB
 The number of PACS in Uttar Pradesh constituted 9.56% of the total number
of PACS in the country, however, the membership constituted only 2.15% of
the country‟s‟ total membership and borrowing membership constituted only
1.33% of total borrowing members. The share capital mobilized by the PACS
in Uttar Pradesh at ₹192.47 cr. constituted just 1.56% of the total share capital
of PACS in the country at ₹12,280 cr.
19 | P a g e
 The amount of loans disbursed by the PACS in Uttar Pradesh was a mere
0.44% of the total loans disbursed by PACS in the country.
 The loans outstanding per employee also was very low at ₹20.28 lakh
compared to the all India average of ₹1.35 cr. and constituted only 14.81% of
the per employee loans at all India level.
 Though the statistics indicate on an average one employee per PACS, in
reality, owing to problems of manpower planning and recruitment for PACS,
there are several PACS which share their employees with other societies i.e.,
an employee is in-charge of more than one PACS as observed during field
visits.
 One of the strengths of PACS in UP was that more than 7,000 PACS in the
state have their own premises, which could be put to proper use. Another
favorable factor was that Government of UP had sanctioned grant assistance
for Computerization of 2,500 PACS in the first phase (F.Y. 2018-19).
3.3.2. Share of STCCS in Agriculture Loans of the state:

As per the NABARD Focus Paper 2016-17, Uttar Pradesh, the share of
STCCS in agriculture loans disbursed in the states was only 5.94%.
3.3.3. HR Policy:
The state has a HR Policy for staff of PACS though not being implemented in
letter and spirit. State Government has prescribed minimum staff strength for
the PACS. There is a Common Cadre system for the Secretaries of PACS.
However, the other Cadres of staff are not included in the Cadre System. The
Government of Uttar Pradesh has prescribed centralized services rules for
PACS (1976). The Centralized Services comprise the post of Managing
Director and Secretaries of PACS. However, in the year 1999 PACS having
business of less than ₹3 Lakhs were excluded from the purview of Cadre
Authority which was subsequently increased to ₹10 Lakhs in the year 2003-
04. The Cadre Authority was discarded in the year 2006 which was, however,
again brought into position in the year 2015. The staffing pattern has been
prescribed based on the turnover and accordingly, there were 5 categories of
PACS from 08-12-2004 which was again revised into two categories from 19-
20 | P a g e
02-2018. The government has laid down the minimum education qualification
for each category of staff; their pay scales; procedure for recruitments. But, in
reality there is a serious staff shortage in PACS all over the state. There are
instances of one Secretary looking after 3-4 PACS (Jeyoli PACS, Barabanki
Dist.).
3.3.4. Salient features of HR Policy were as under:

Table No. 3.9. Staffing Pattern:
Name of Post Sanctioned Strength of Staff as per Business of PACS
0-20 Lakh 20-40 Lakh 40-60 Lakh 60-80 Lakh Above 80 Lakh
Secretary 01 01 01 01 01
Accountant - - 01 01 02
Clerk/Salesman/Cashier - 01 01 02 02
Office Assistant - - 01 01 01
Guard 01 01 01 01 01
As per RCS Cir. No.: C-106 Dt: 08-12-2014
Table No. 3.10.

Name of Post Sanctioned Strength of Staff as per Business of PACS
Less than 80 Lakh More than 80 Lakh
Secretary 01 01
Accountant 01 01
Clerk/Salesman/Cashier - 01
Office Assistant 01 01
As per RCS Cir. No.: C-68 Dt: 19-02-2018
3.3.5. Educational Qualifications:

Table No. 3.11.
Name / No. of Post Prescribed Educational Qualification
Sanctioned
Open Market Graduation, preference will be given to Diploma Holder in Coop. and
knowledge of Computer
Secretary Through Intermediate, 5 yrs. experience as Asst. Accountant, Godown Keeper, Clerk
PACS Staff and preference will be given to Diploma Holder in Coop. and knowledge of
Computer
Accountant Graduate with knowledge of Computer C++, B.Com. will be given preference
Clerk/Salesman/Cashier Graduation with knowledge of Computer C++
Office Assistant Graduation with knowledge of Computer C++
Guard Passed Class-5 and knowing Cycling
21 | P a g e
3.3.6. Pay-Scale:
Table No. 3.12.
Name/No. of Post Pay-Scale (Fig. in ₹) Approximate Monthly Pay
Sanctioned Maximum Minimum
Secretary 3200-85-4900 50000 6000
Accountant 3050-75-3950-80-4590 30000 4000
Clerk/Salesman/Cashier 3050-75-3950-80-4590 20000 4000
Office Assistant 3050-75-3950-80-4590 6000 4000
Guard 2550-65-3200 8000 1500
Salary will be paid as per earning capacity of the society
3.3.7. Recruitment:
Table No. 3.13.
Name / No. of Post Recruitment Procedure
Sanctioned
Open Written examination of 100 marks at Dist. level through Committee constituted
Market under the chairmanship of Dy./Joint Registrar with Asst. Commissioner & Asst.
Secretary Registrar Coop., Secretary/CEO, Dist. Coop. Bank and nominee of Registrar of
Coop. as a member
Through Screening by the Committee constituted under the chairmanship of Dy./Joint
PACS Registrar with Asst. Commissioner & Asst. Registrar Coop., Secretary/CEO, Dist.
Staff Coop. Bank and nominee of Registrar of Coop. as a member.
Accountant Board of Members of PACS to forward the Applications received from eligible
applicants for screening by Dist. Selection Committee with Asst. Commissioner &
Asst. Registrar Coop., Chairman, Secretary/CEO, Dist. Coop. Bank and Addl. Dist.
Coop. Officer as a member Secretary, through written examination
Clerk/Salesman/ Board of Members of PACS to forward the Applications received from eligible
Cashier applicants for screening by Dist. Selection Committee with Asst. Commissioner &
Asst. Registrar Coop., Chairman, Secretary/CEO, Dist. Coop. Bank and Addl. Dist.
Coop. Officer as a member Secretary, through written examination
Office Assistant Outsourcing
Guard Board of Management of PACS from eligible applicants residing in affiliated block
of PACS
Though the salaries have been prescribed as above, it was gathered during
the visits to societies that there was no proper payment of salary to the staff
and salaries were in arrears for several months in certain places. No
retirement benefits were in force for the staff of PACS. Disciplinary action
procedure and performance appraisal systems were also not in vogue.
3.3.8. At the consultative meeting, several stakeholders including the

representatives of Staff Unions and Associations supported the need for
transfer of PACS staff among similarly placed PACS in terms of financial
strength, to be administered through an institution of District Level Cadre
Authority.
22 | P a g e
3.3.9. Training arrangements:

The State Cooperative Bank has a training institute - Agriculture Cooperative
Staff Training Institute (ACSTI), Lucknow.
3.4.1. North Eastern Region (NER):

The status of PACS in the North Eastern Region (NER) and the state of
Meghalaya vis-à-vis PACS at Pan India level under different parameters is
discussed in brief in the following paragraphs.
Table No. 3.14. FY – 2015-16
Sl. Particulars Pan India NE As % of Pan Meghalaya As % of NER
No. Region India
1 No of PACS 93,367 3499 3.75 179 5.11
2 Membership 12.73 cr 36.86 2.89 95,620 2.60
lakh
3 Borrowing Members 4.62 cr 1.85 lakh 0.40 3,400 1.84
4 Share Cap (₹) 12,280 cr 44.73 cr 0.36 8.92 cr 19.94
5 Deposits (₹) 1.01 lakh cr 98.13 cr 0.097 7.39 cr 7.53
6 Borrowings (₹) 1.12 lakh cr 48.84 cr 0.043 18.66 cr 46.28
7 Loans Disbursed (₹) 1.80 lakh cr 49.50 cr 0.03 11.34 cr 22.91
8 Loans O/S (₹) 1.58 lakh cr 61.34 cr 0.04 20.47 cr 33.37
9 Staff Strength 1.17 lakh 8,670 7.41 207 2.39
10 PACS in Profits 45,522 653 1.43 54 8.27
11 PACS in Losses 37,112 872 2.35 125 14.33
12 Loans O/S/PACS (₹) 1.69 cr 1.75 cr 103.55 11.43 lakh 6.29
13 Loans O/S/Employee (₹) 1.35 cr 0.70 lakh 0.52 9.89 lakh 1412.85
14 Average Loan Size (₹) 0.34 lakh 0.33 lakh 97.05 0.60 lakh 181.81
Source: NAFSCOB
 The NER accounted for 3.75% of PACS in the country. However,

membership of PACS in NER accounted for only 2.89% and the borrowing
memberships was just 0.40% of the total borrowing members in the country.
 The entire NER accounted for less than 1% of all India position under Share
Capital, Deposits, Borrowings, Loans disbursed and Loans outstanding.
23 | P a g e
 Unusually, the average staff strength per PACS in NER at 2.47 was almost
double the national average at 1.25.
 Loans outstanding per PACS at ₹1.75 cr in NER, was also higher than all
India average of ₹1.69 cr. These perhaps need deeper analysis.
 The staff strength though statistically, appears to be more than 1 person on
an average per PACS, in reality there were societies running with hardly any
staff.
 The number of borrowing members in Meghalaya at 3400 out of the total
membership of 95,620 was very poor.
 Deposits constitute only 0.097% of the total deposits mobilized by the PACS
in the country.
3.4.2. Meghalaya:
 PACS in Meghalaya accounted for 5.11% of total PACS in NER and 0.19% of
total PACS in the country.
 The share of STCCS in Agri-loans business of the Meghalaya state is 17% for
the year 2016-17 as per the NABARD focus paper.
 In terms of membership Meghalaya accounted for 2.60% of total members of
NER and 0.07% of total members of PACS in the country.
3.4.3. HR policy in Meghalaya:

There is no HR Policy for PACS/LAMPCS in the state of Meghalaya. The
earlier Cadre System for PACS staff was abolished in the year 2003. The
respective managements fix the salaries for staff of primaries. There is a
serious shortage of staff at the primaries. In several cases, the staff members
are employed on part time basis on nominal compensation terms. Any
increase in overheads is not sustainable for primaries. Generally, the
following cadres of staff are working in the PACS viz., Secretary, Asst.
Secretary / Accountant, Assistant and Attender. However, most of the PACS
have only 1 or 2 staff members. Exceptionally, PACS which are mobilizing
daily deposits and having large deposit base of ₹2.5 cr etc., have about 8 staff
members on their rolls. Consolidated salaries of about ₹3,000/- to Secretary;
₹1,500/- for Cashier and ₹1,000/- for Sales Assistant were being paid out of
24 | P a g e
their own resources. The staff of PACS who participated in the discussions
lamented that the negligible salaries being paid to them were often a point of
discussion and shame and consequently, Cooperatives are not able to attract
talent.
3.4.4. The NER follows a 2-tier cooperative credit structure with State Cooperative
Bank at the Apex Level and PACS at the Primary Level. It was observed that
the relationship and coordination of activities between State Cooperative Bank
and PACS/LAMPCS deserves to be improved significantly. The infrastructure
is either absent or is very poor in PACS. The books of Accounts and Records
were not maintained properly. The overall economic picture obtaining in
Meghalaya and NER in general offers an excellent business opportunity to
PACS/LAMPCS, which can be explored through preparation and
implementation of a comprehensive business development plan covering all
the aspects of the primaries. The Committee is of the view that the issues of
STCCS and particularly those of PACS of North Eastern States need an in-
depth analysis and required to be dealt separately owing to their unique
circumstances.
3.4.5. The NER has a training institute – Manpower Development and Management
Institute, (MDMI) at Guwahati. MDMI was set up to train personnel of all
levels in the Cooperative Banking Sector in the North East Region.
3.4.6. During the field visit to Mylliem Service Cooperative Society in Meghalaya and
during the course of interactions with participants at the consultative meets, it
was understood and observed that there was no regular contact or
relationship between the PACS and the SCB. The PACS are seldom visited
by the officials of SCB. The accounts of the PACS are not maintained
properly. The total liabilities of the PACS to SCB are not recorded anywhere
in the books of accounts maintained by the PACS. It was quite disturbing to
note that there was no entry of loans disbursed to members in the cash book
of the PACS. There is a long way to adopt CAS and MIS prescribed by
25 | P a g e
NABARD though, the state has signed the MoU for implementation of Revival
Package in the year 2008.
3.5.1. Kerala:
The state of Kerala has a well-established and strong primary cooperative
credit structure, with very wide outreach and strong financials in general.
The status of PACS in the state vis-à-vis PACS in the country in furnished in
the table given below:
Table No. 3.15. (FY 2015-16)
Sl. No. Particulars Pan India Kerala As Percentage of
Pan India
1 No of PACS 93,367 1647 1.76
2 Membership 12.73 cr 1.86 cr 14.61
3 Borrowing Members 4.62 cr 1.23 cr 26.62
4 Share Cap (₹) 12,280 cr 1023.56 cr 8.33
5 Deposits (₹) 1.01 lakh cr 72723.50 cr 72
10 PACS in Profits 45,522 1033 2.26
11 PACS in Losses 37,112 514 1.38
12 Loans O/S/PACS (₹) 1.69 cr 33.98 cr 2010.65
13 Loans O/S/Employee (₹) 1.35 cr 2.70 cr 200
Source: NAFSCOB
 As could be seen from the above, while Kerala accounted for only 1.76% of
total PACS in the country, they accounted for 14.61% of total membership
and 26.62% of borrowing members.
 PACS of Kerala accounted for 72% of the total deposits mobilized by all
PACS in the country.
 Similarly, Kerala accounted for 38.56% loans disbursed; 35.42% of loans
outstanding, where as borrowings accounted for only 5.40% of the total
borrowings of PACS in the country, reflecting a strong financial base of PACS
in the state.
26 | P a g e
 Average Loans outstanding per PACS at ₹33.98 cr was 20 times more than
the national average.
 The amount of loans outstanding per employee in Kerala was twice that of the
all India average.
 Average loan size at ₹5.65 lakhs in Kerala was sixteen times more than the
national average.
 However, about 31% of the total PACS in Kerala were running in losses
despite strong financials in general, which is a matter of concern requiring
analysis and corrective action.
3.5.2. HR Policy for staff of PACS:

The state of Kerala has a well-defined HR Policy for the staff of PACS.
3.5.3. Salient features of the HR Policy are as under:

Section 80 and Rules 182 of Kerala Cooperative Societies Act, 1969 deals
with HR matters of PACS among other cooperatives. Section 80 of the Act
ibid deals with classification of societies in accordance with nature and
financial position, staffing pattern, educational qualification for each category
of staff, SC / ST, and physically handicapped reservations and salaries and
allowances to employees. Government from time to time issues circulars
accordingly. Guidelines were prescribed for promotion, leave, disciplinary
action, gratuity, superannuation pension etc.
Appointment of employees for Primary Credit Societies (PACS) from Junior

Clerk Level is taken up by Cooperative Service Examination Board, through
written examination and interview.
Classification of Societies: The state of Kerala adopted several parameters

including working capital, deposits for classifying PACS in the state as
detailed below:
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Latest Classification Norms (Cir 32/13, 10/14)

Table No. 3.16.
1 2 3 4 5 6 7
Norms to be
Class Working Deposit Loan Audit Profit Dividend Overdraft Additional Posts
satisfied
of Capital Outstanding Classification
Society
Class I Above Above Above 50 Last 3 years Last Last 5 15% on For every
Super 80 60 Crore A 5 years demand additional
Grade Crore Crore years should Working Capital
4 declare 3 of ₹3 Crore one
years years additional Clerk.
Subject to
minimum of 5 will
be admissible.
1,2,3,7 Compulsory & any 2 from in the remaining 3

For every
additional 3 clerk
one additional
Head Clerk is
admissible.
* Each for every
800Sqf. Subject
to maximum 3
Class I 30 26 22 Crore Last 3 years 2 In last 5 Not One additional
SPL Crore Crore and above Minimum A 1 years years exceed clerk if working
Grade and and year B 2 in Declare 25% capital exceeds
above above years last 5 at least 1 25 Crore
years year
Class I In In 16 Crore Not less than 2 Declare Not
between between and above B for last 3 years at least 1 exceed
20 18 years in year 25%
Crore Crore last 5 during
and 30 and 26 years last 3
Crore Crore years
Class II In In 10 Crore Not less than At One addition
between between and above B for last 3 least Head Clerk if
14 12 years 1 ,, ,, W.C. exceeds.
Crore Crore year 16 Crore, 2nd addl.
and 20 and 18 in Clerk if WC
Crore Crore last 3 exceeds 18 Crore
years
Class In In 6 Crore and Not less than 1 One additional
from in the remaining 4
1,2,3, Compulsory & 3
III between between above B in last year clerk if working

8 Crore 7 Crore years in ,, ,, capital exceeds
and 14 and 12 last 3 11 Crore
Crore Crore years
Class In In 3 Crore and Last year not 1 Not One additional
IV between between above less than B year exceeded clerk if working
4 Crore 3 Crore in ,, 30% capital exceeds 6
and 8 and 7 last 3 Crore
Crore Crore years
Class In In 1 Crore Not less than Not One additional
1,2,3, Compulsory & 1 from
V between between above but C last 3 years exceeded clerk if working

2 Crore 1.5 less than 3 35% capital exceeds 3
in the remaining 2
and 4 Crore Crores Crore

Crore and 3
Crore
Class In In 50 Lakh Last year not Not
VI between between and above less than C exceeded
1 Crore 75 Lakh 35%
and 2 and 1.5
Crore Crore
- All other Credit Societies – In Class VII.
- For employees societies to classify in III & IV – norms 1,3,7 compulsory and any 2 from the
remaining and in Class V norms 1,3,5 compulsory and any 1 from the remaining.
- Societies should issue agri-loans during in the last 3 preceding years @ fixed by RCS and
obtain certificate from Registrar regarding Section 29 and Rule 33 of KCS Act.
28 | P a g e
3.5.4. PACS in Kerala are classified into 9 categories based on their business. The
number and the category of staff are prescribed in respect of each of these
categories. The highest category called Super Grade PACS has a provision
for 39 staff. The lowest category of PACS has provision for 2 employees.
3.5.5. Staffing Pattern:

Rule 188 of KCS Act deals with staffing pattern. The details of sanctioned
strength for different classes of PACS are furnished in the table given below:
Appendix III, Rule 188 of Kerala Co-operative Societies Act and Rules
Table No. 3.17.
Sl. Category Class I Class I Class Class Class Class Class Class Class
No. Super Special I II III IV V VI VII
Grades Grades
1 Secretary 1 1 1 1 1 1 1 1 1
2 Assistant 1 1 1 1 1 1 -- -- --
Secretary
3 Chief 1 1 1 1 -- -- -- -- --
Accountant /
Chief Cashier
4 Internal 1 1 1 1 1 -- -- -- --
Auditor
5 Accountant / 6 4 3 1 1 1 1 -- --
Head Clerk
6 Senior Clerk / 22 14 10 6 5 3 2 1 1
Junior Clerk
7 Attender 2 2 2 1 1 1 -- -- --
8 Peon 3 3 3 2 2 1 1 1 --
9 Night 1 1 1 1 1 -- -- -- --
Watchman
10 Data Entry 2 2 1 1 1 -- -- -- --
Operator
* Classification of Cooperative Societies are based on its character and financial position
Section 80(1) and Rule 182 of the KCS Act and Rules.
** The staff pattern of Cooperative Societies is fixed by the government based on its
classification.
29 | P a g e
3.5.6. Education Qualifications:

Table No. 3.18.
Name / No. of Post Prescribed Educational Qualification
Sanctioned
Secretary Degree + JDC or equivalent
Clerk & above SSLC + JDC or equivalent
Attender Pass in VII Standard and no maximum qualification
3.5.7. Pay-Scales:
9 categories of societies have different pay scales to the different cadres of
employees from Secretary to Sweeper (10 Cadres) Annexure-6.
3.5.8. Recruitment:
Government of Kerala Cooperative Service Examination Board for recruitment
has constituted the selection of employees of PACS. The Board comprises a
Chairman and two Members. Out of the two members, one is a member
convenor of the rank of Deputy Registrar of Cooperative Societies. The board
will have 5 years term. Board is nominated by the Government of Kerala.
3.5.9. Important conditions, which govern to recruitment process, include the

following:
 No temporary appointment is allowed.
 Advertisement in two vernacular newspapers having wide circulation.
 The advertisement is in detail showing name of post, number of vacancies,
reservation or not, educational qualification, age, pay scale etc.
 Conduct written examination (maximum 80 marks).
 After written examination conduct interview (Max. 20 marks).
 Prepare, approve and publish the rank list.
3.5.10. Maximum Age limit as on 1st January:

General - 40 years; OBC/Ex-Serviceman – 43 years; SC/ST – 45 years;
Physically Handicapped – 50 years.
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3.5.11. An Observation in Kerala:

It is observed that, though the state of Kerala had not accepted the
recommendations of the Vaidyanathan Committee, it has supported the
STCCS extensively. Kerala has a good ratio of staff per PACS at 12:1.
Kerala has a well-defined HR Policy for PACS with suitable provisions in the
State Cooperative Societies Acts and Rules. Staff for PACS is being
recruited through a specially constituted Kerala Cooperative Service Board
as mentioned above. The entire expenditure on the said Board is funded by
the Government of Kerala. The PACS staff has opportunities for their career
progression. They can be promoted to the post of Assistants in the DCC
Banks. There is a 50% reservation for PACS staff in the DCCB recruitment.
There is no system of transferring staff of one PACS to another PACS.

However, during consultation meet it was opoined by certain members
supported the idea of transfer/deputation of staff of one PACS to other PACS
so that, skills can be improved and exchange of knowledge and ideas helps
relative weaker PACS to develop. Temporary staff is employed during the
season for procurement of agri-produce. Such temporary staff is paid daily
wages @₹500/day payable at the end of every month.
3.5.12. Training:
As per the extant service conditions, once in three years every employee
should attend a training program without which, such an employee will not be
eligible for further increments. Minimum qualifications for promotions as well
as detailed rules for promotion to the higher cadres within the society have
been clearly laid down and are being followed by the society.
3.5.13. Retirement Benefits:

The staff of PACS in Kerala are being provided pension, gratuity, medical
insurance etc. Pay scales of employees of PACS are revised once in every
5 years. At present, the State Pension Board disburses pension to the
retired employees of PACS at a maximum of ₹22,500/- per month which
includes DA and Medical Allowance.
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3.5.14. State Support to PACS Development:

The Government of Kerala is administering a Deposit Guarantee Scheme for
the deposits in PACS which instills confidence among PACS customers about
the safety of their deposits.
This perhaps is one of the major reasons large deposit mobilization by PACS
which has changed the business profile of PACS. The surplus resources
available with PACS, however, have created resource management problems
for the PACS which are not able to identify proper investment avenues.
Share of Cooperatives in crop loans in the state is about 10%. The major
portfolio of PACS is non-agricultural business.
3.5.15. There is a Common Accounting System prescribed by the State Government

for PACS. All the PACS follow the same as per the mandate. A Cooperative
Accounting Manuel is made available to PACS.
However, it was not as per the CAS-MIS prescribed by NABARD for PACS in
the country.
3.5.16. The State Cooperative Bank has a training institute - Agriculture Cooperative
Staff Training Institute (ACSTI), Thiruananthapuram, where PACS staffs are
also trained.
32 | P a g e
3.6.1. Maharashtra:
The details of status of PACS in the state of Maharashtra are furnished in the
table given below:
Table No. 3.19. (FY 2015-16)
Sl. Particulars Pan India Maharashtra As Percentage of
No. Pan India
1 No of PACS 93,367 21094 22.59
2 Membership 12.73 cr 1.44 cr 11.31
4 Share Cap (₹) 12,280 cr 2090.56 cr 17.02
5 Deposits (₹) 1.01 lakh cr 174.60 cr 0.17
9 Staff Strength 1.17 lakh NA 0
10 PACS in Profits 45,522 8924 19.60
11 PACS in Losses 37,112 11739 31.63
12 Loans O/S/PACS (₹) 1.69 cr 0.55 cr 32.54
13 Loans O/S/Employee (₹) 1.35 cr NA 0
Source: NAFSCOB
3.6.2. The share of STCCS in Maharashtra in Agri-loan business is 33% as on 30-

06-2017 as per the NABARDS‟s focus paper.
 The state has the largest number of PACS in the country accounting for
nearly 23% of the total PACS in the country.
 While PACS of Maharashtra accounted for 11.31% of the total membership of
PACS in the country, the borrowing membership was very low at 0.009%,
which does not seem to be correct. This needs to be verified and corrected
by the Apex Bank.
 PACS of Maharashtra accounted for just 0.17% of total deposits mobilized by
PACS in the country. They accounted for 9.99% of total borrowings indicated
depending on higher financial agencies.
33 | P a g e
 It is further observed that more than 50% of the societies are running on
losses with very low average loans outstanding per society @₹55 lakhs
/society which is less than one third of the Pan India average.
 No information was available on the number of staff employed by staff and
accordingly the average business per staff could not be arrived at.
3.6.3. HR Policy for the staff of PACS in Maharashtra:

There is no HR Policy for the PACS staff nor is there a prescribed man power
structure for the PACS. It is also observed that government has permitted
recruitment of PACS staff on contract basis. There is no policy for staff
training and capacity building. DCC Banks do not have any reservation in
their staff recruitment for the staff of PACS.
Common Cadre for PACS employees prevails even now in certain DCCBs.
There are different categories of CEOs of PACS i.e., Cadre Secretaries,
PACS Secretaries, Group Secretaries.
A Cadre Secretary gets about ₹8,000/month where as a Secretary appointed

by a society gets ₹5,000/month. These figures are, however, only indicative
and not uniform across the societies. 3-8 PACS have a common CEO. The
staff shortage is so acute in PACS in Maharashtra that in Buldana District only
67 Secretaries were taking care of 570 PACS in the district. The government
permission is required for recruitments but it is seldom given, though there are
exceptions in certain cases.
3.6.4. Training arrangements:

The State Cooperative Bank has a training institute - SHIKHAR Training and
Research Institute at Vashi, Navi Mumbai.
3.7.1. Jharkhand:
The state has the distinction of forming one of the earliest cooperatives, in
erstwhile Bihar state, going back to the year 1867 when Gramin Cooperative
Societies were organized by the district administration in Santal Pargana of
34 | P a g e
Bihar state. They issued loans in the form of agri-produce and recovered
such loans again in the form of agri-produce with an objective to help the
farmers to survive.
3.7.2. The state of Jharkhand introduced the 2-tier structure under STCCS with the
merger of DCCBs with the State Cooperative Bank from 01-04-2017. Out of
the 8 DCCBs 7 have been merged with the State Cooperative Bank.
However, Dhanbad DCCB is operating on a standalone basis. Further,
Government of Jharkhand has taken-up reorganization of PACS/LAMPCS
from the year 2013 and new societies are being created @ one society per
Gram Panchayat, re-allocating the area of operation of the existing societies.
So far the assets and liabilities of the reorganized societies have not been
transferred from the parent society. Similarly, redistribution of members
among the newly formed PACS/LAMPCS is also pending. The process is
ongoing. There are, at present, 4,394 PACS/LAMPCS in the state with about
20 lakh members. PACS/LAMPCS are working as BCs (Banking
Correspondents) for DCCBs. Some of the stakeholders strongly opined that
the restricted area of operation under the new scheme make societies
financially unviable. While re-organizing the PACS/LAMPCS as above, the
Government did not provide any road map to achieve sustainability of the re-
organized societies, nor appears to have considered viability of such re-
organized societies.
3.7.3. It was a matter of concern that neither the state government, RCS, SCB nor
NABARD had any detailed information about membership, share capital,
deposit, borrowings, loans advanced, NPAs etc., in respect of PACS in
Jharkhand. NAFSCOB also did not have any information as JSCB had not
yet joined NAFSCOB. No statistics are available in respect of number of
PACS membership borrowings and what-so-ever of the STCCS in Jharkhand
State.
35 | P a g e
3.7.4. HR Policy for the staff of PACS in Jharkhand:

At present, there is no HR Policy for PACS staff. Government of Jharkhand
has imposed several restrictions on the loaning business of PACS. Salaries
of PACS staff are decided upon by their respective managements and
therefore, do not follow any particular pattern. There is no system of
inspection of PACS/LAMPCS either the government or by the higher financial
institutions.
3.7.5. Stakeholders, however, desire to have a proper HR Policy and financial grant
support from the State Government for a period of at least 5 years from the
date of implementation of uniform pay scales for the PACS staff. They draw a
parallel with the coordinators for Self Help Groups who get a monthly salary of
₹35,000/- funded by the State Government. In support of their argument/plea
for governments financial grant, they point out that all the government
programs are run through PACS/LAMPCS; further, Self Help Groups as well
as PACS/LAMPCS are member owned and member run organizations and
hence, have to be given similar treatment. There are a few Secretaries of
PACS who are paid about ₹35,000/- per month whereas some other draw as
low as ₹3,000/- per month. As such there was no uniform pay structure for
PACS staff in the state.
3.7.6. Stakeholders further, sought reintroduction of Common Cadre System for the
PACS staff enabling a structured salary payment as well as transferability
among others.
3.8.1. Andhra Pradesh and Telangana:

After bifurcation of the former state of Andhra Pradesh into Andhra Pradesh
and Telangana, STCCS has also been reorganized with two Apex Bank with
respective DCCBs and PACS coming under their jurisdiction.
36 | P a g e
3.8.2. The status of PACS in these two states vis-à-vis with all India has been
furnished in the table given below:
Table No. 3.20. (FY 2015-16)
Sl. Particulars 2015-16
No.
Pan India Andhra As Telangana As
Pradesh Percentage of Percentage
Pan India of Pan India
1 No. of PACS 93,367 2050 2.19 798 0.85
2 Membership 12.73 cr 88.75 lakh 6.91 35.99 lakh 2.82
3 Borrowing Members 4.62 cr 23.14 lakh 4.97 12.09 lakh 2.59
4 Share Cap (₹) 12,280 cr 1384.43 cr 11.27 457.07 cr 3.72
5 Deposits (₹) 1.01 lakh cr 1343.44 cr 1.33 374.49 cr 0.37
6 Borrowings (₹) 1.12 lakh cr 6877.62 cr 6.14 3356.19 cr 3.00
7 Loans Disbursed (₹) 1.80 lakh cr 5339.29 cr 2.97 5326.04 cr 2.95
8 Loans O/S (₹) 1.58 lakh cr 7827.95 cr 4.95 3594.19 cr 2.27
9 Staff Strength 1.17 lakh 5650 4.82 3445 2.94
10 PACS in Profits 45,522 1287 2.82 485 1.06
11 PACS in Losses 37,112 679 1.83 231 0.62
12 Loans O/S/PACS (₹) 1.69 cr 3.81 cr 225.44 4.50 cr 266.27
13 Loans O/S/Employee (₹) 1.35 cr 1.38 cr 102.22 1.04 cr 77.04
14 Average Loan Size (₹) 0.34 lakh 0.34 lakh 100.00 0.30 lakh 88.24
Source: NAFSCOB – 2015-16
 The share of STCCS in Andhra Pradesh in Agri-loan business is 8.30% for

the year ending 31-03-2017 as per the NABARD State Focus Paper.
 The share of STCCS in Telangana State in Agri-loan business is 18% for the
year ending 31-03-2017 as per the NABARD State Focus Paper.
 It may be seen from the above that both Andhra Pradesh and Telangana
performed better in terms of membership, borrowing members, share capital
etc. However, they were lagging behind in deposit mobilization. The state
was above the national average under loans outstanding per PACS.
37 | P a g e
3.8.3. HR Policy for the staff of PACS in Andhra Pradesh and Telangana State:
Government of Andhra Pradesh had issued G.O. Ms No. 226 Dt: 29-06-2005
prescribing HR Policy including the staffing pattern as well as salary structure
for the staff of PACS. Basically, there are 3 categories of staff – Category-I –
Secretary; Category-II – Accountant-cum-Clerk, Cashier, Salesman/Godown
– Keeper and Category-III – Attender/Watchman.
3.8.4. The Government of Andhra Pradesh revised the above HR Policy in the year
2009 through G.O.MS No. 151, Dt: 22-06-2009 which is being followed
currently by the PACS in both Andhra Pradesh and Telangana State.
 Government of AP have constituted a three-member committee consisting of

Registrar of Cooperative Societies, Managing Director, Andhra Pradesh State
Cooperative Bank and Chief General Manager, NABARD, Regional Office,
Hyderabad to look into the Service matters of employees of Cooperative
Credit Structure and make suggestions to the Government.
 The A.P.C.S. Act 1964 was amended vide Act 16 of 2007 to give effect to the
Memorandum of Understanding (MoU) signed by Government of Andhra
Pradesh with Government of India and NABARD with a view to implement the
revival package for Cooperative Credit Structure offered by Government of
India based on the recommendations of Prof. A. Vaidyanathan.
 According to the newly inserted Section 115-D (2) “The Cooperative Credit
Society shall have autonomy in all Financial and Internal Administrative
Matters, subject to the guidelines of Reserve Bank of India / National Bank of
Agriculture and Rural Development in specified areas including personnel
policy, staffing, recruitment, posting and compensation to staff.
3.8.5. The salient features of the extant HR policy are furnished in the following
paragraphs.
3.8.6. STAFF STRUCTURE:

Each PACS may have not more than one CEO, one Staff Assistant and one
Sub-staff. However, where the PACS is not able to afford all the above three,
38 | P a g e
they may reduce one or two of the above posts as the case may be, to
conform to the guidelines of the NABARD.
DLIC was required to identify the surplus staff and allot to needy societies on
the request of the management of the needy societies. After such
redeployment, the DLIC may make suitable recommendations about the
remaining surplus staff, if any.
3.8.7. SCALE of PAY:

The following scales of pay were fixed for the Chief Executives, Staff
Assistants and Sub-Staff:
 CEO: 1640-75/2-1790-100/2-1990-120/2-2230-140/6-3070-160/6-4030-80/3-
4570.
 Staff Assistant: 1585-60/2-1705-75/2-1885-100/4-2255-120/6-2975-140/4-
3535-160/3-4015.
 Sub-staff: 1540-50/6-1840-60/5-2140-75/4-2440-100/3-2740–120/2-2980-
140/1-3120.
 D.A.: Uniform D.A. of 100% was allowed on the above scales. For future
increases of D.A., the pattern adopted by DCCBs may be followed for both
quantum and periodicity.
 H.R.A.: 10% of the basic pay was fixed as HRA with a minimum of ₹300/- and
a maximum of ₹500/-.
3.8.8. STAGNATION INCREMENTS:

Three stagnation increments may be allowed equivalent to the last increment
in the time scale after reaching the maximum scale at the rate of one
increment per three years.
3.8.9. FITMENT:
The scales may be fixed from 1.4.2009 giving one weightage increment for
every eighteen months of completed regular service. Regular annual
increments may be sanctioned from 1.4.2010.
39 | P a g e
The management of PACS may not be allowed to change the scales.

However, in case they are in a position to pay additional incentives etc., they
may do so without disturbing the scales of pay. Wherever payment of
additional incentives and suitable financial compensation are warranted it may
be necessary to adhere to the rules as laid down in the Act/Rules and
guidelines of NABARD/RBI.
3.8.10. Maintenance of Service Registers:

The management should prepare the service registers of the staff appointed
as CEO, Staff Assistant and Sub-staff and get them approved by the
concerned DLCOs before the end of March.
 The scales now recommended can be paid by the PACS only after the service
registers are duly opened, prepared and certified by the DLCOs.
 The Pay Scales indicated above shall not be revised without prior permission
of the Government.
 One special increment has to be sanctioned to the Chief Executives and Staff
Assistants who acquire graduation and also another increment for obtaining
computer diploma from a recognized institute which is recognized by the
Technical Education Department, Government of Andhra Pradesh of not less
than 3 months duration at their own cost.
 These service conditions including pay scales etc., will be revised once in five
years.
 However, no such revision took place in Telangana, whereas Government of
Andhra Pradesh constituted a Committee for the purpose, whose
recommendations are under the consideration of the Government.
3.8.11. HR policy Committee for the state of Andhra Pradesh:

Government of AP had appointed in the year 2016, a “Committee to examine
the various issues and demands of PACS employees to formulate a specific
HR Policy” (GO. RT. No. 71 Dt: 28-01-2016). The committee has submitted
its recommendations which are under consideration of the State Government.
The recommendations of the Committee were welcomed by the stakeholders
40 | P a g e
of both the states and requested that steps be taken for expeditious
implementation of the same.
3.8.12. The salient features of the recommendations included the following:

Major recommendations of the Committee are:
i. Categorization of PACS based on business and composition of staff for
each of the category as under:
Sl. Business level Category
No. (Rs. In Crore) of PACS
1 Above Rs. 10 Crore A
2 Rs. 5 Crore and up to Rs. 10 Crore B
3 Rs. 3 Crore and up to Rs. 5 Crore C
4 Below Rs. 3 Crore D
Proposed Staff Strength

Sl. Proposed staff strength
No. Grade of PACS Chief Executive Assistant Sub Staff**
Officer (CEO) Executive*
1 A 1 3 2
2 B 1 2 1
3 C 1 1 1
4 D 1 0 1
*Assistant Executive cadre will include clerks, accountants, salesmen, computer operators
etc.
** Sub staff cadre will include attenders, godown keepers, machine operators, drivers, night
watchmen and other subordinate staff.
ii. Scales of pay:

CEO 6975-320/2-7615-425/2-8465-510/2-9485-595/6-13055-
680/6-17135-765/6-21725
Assistant 6740-255/2-7250-320/2-7890-425/4-9590-510/6-12650-
Executive 595/4-15030-680/6-19110
Sub-Staff 6550-215/6-7840-255/5-9115-320/4-10395-425/3-11670-
510/2-12690-595/4-15070
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iii. Implementation Mechanism:

a. State level:
A State Level Empowered Committee (SLEC) may be constituted as
under for guiding, reviewing, monitoring the implementation of the
recommendations.
President, APCOB - Chairman

CC&RCS - Member
CGM, NABARD - Member
M.D., APCOB - Member/Convener
The APCOB may provide necessary secretarial support to the committee.

The committee shall meet at least once in a quarter.
b. District Level:
An empowered committee may be constituted at the district level for
implementing and monitoring the various recommendations on H.R.
matters. The committee may be named as “District Level Empowered
Committee on H.R. matters for PACS” (DLEC).
c. The following constitution is recommended for the DLEC
i. President of the DCCB - Chairman

ii. Dist. Coop. Officer - Member
iii. Dist. Dev. Manager, NABARD - Member
iv. CEO of DCCB - Member / Convener
d. The District Level Support Fund shall be administered by the DLEC.
iv. Other major recommendations:

 Fitment; gap funding formula for salary payment.
 DA as applicable to the DCCBs.
 HRA.
 Stagnation Increments.
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 Incentive increments for acquiring professional qualifications.

 Capacity to pay as per NABARD norms.
 Health insurance.
 Encashment of earned leave.
 Gratuity.
 Funeral expenses.
 Festival advance and personal loans.
 Maternity leave.
 Recruitment, transfer, training and promotions.
 Compassionate appointment.
 Service registers for PACS staff.
 Career path for PACS staff - 25% reservation for PACS staff in
DCCB recruitment.
 Annual Performance Appraisal System.
 Disciplinary policy.
 Outsourcing of staff.
 Computerization of PACS.
v. The Report of the Committee to suggest HR Policy for PACS staff in

Andhra Pradesh is available on the public domain – website of RCS,
AP - http://apcooperation.nic.in/open_record_view.php?ID=247.
vi. At the consultative meeting held on 21-06-2018 at TSCAB, Hyderabad,
stakeholders from both the states of AP and Telangana, supported
25% quota in the DCCBs vacancies to PACS employees. They
requested to recruit staff at PACS immediately to fill up the vacancies.
Some of the stakeholders requested that the salaries of the PACS staff
should be paid through DCCBs.
vii. The recommendation by the HR Committee constituted by AP on the
constitution of District Level Support Fund (DLSF) as well as State
Level Support Fund (SLSF) for providing financial assistance to weak
PACS for a period of 3 years on a tapering was welcomed by the
stakeholders albeit with a suggestion to increase the period to 5 years
43 | P a g e
besides, requiring profit making PACS also to contribute to the DLSF

along with DCCBs and SCB.
viii. It was also requested that the salary of the CEO of PACS should be
equal to the salary of Staff Assistant/Clerk/Supervisor of a DCCB.
ix. As regards the capacity to pay norms of NABARD, it was suggested
that the staff cost norms should be enhanced to 50% of Gross Profit at
PACS level and that the issue has to be taken up with NABARD for
appropriate change in the guidelines issued earlier.
3.9. Training Institutes for STCCS in the country:

 In all the states there are training facilities provided by Institutes of
Cooperative Management (ICMs) and Regional Institutes of Cooperative
Management (RICMs) under the umbrella of National Council for Cooperative
Training (NCCT) / National Cooperative Union of India (NCUI). Regional
Training Institutes run by State Cooperative Unions of respective State
Governments.
 NABARD imparts training at BIRD, Lucknow and through its Regional Training
Colleges located in different parts of the country. Further, Centre for
Professional Excellence in Cooperatives (C-PEC) under BIRD, conducts
professional certification programs for the staff of STCCS. Besides NABARD,
the RBI also provides training to the staff of STCCS at their College of
Agriculture Banking, Pune.
 Most of the State Cooperative Banks have their own Cooperative training
institutes (CTIs) or Agriculture Cooperative Staff Training Institutes (ACSTIs).
 Notable other Training Institutes are VAMNICOM, Pune, NIRB, Bangalore and
MDMI, Shillong.
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4. Human Resource (HR) Policy: Recommendations
“Give light and the darkness will disappear itself”

- Desidirius Erasmus
4.1. Human Resource Policy could be defined as a framework for the organization
and employees with specific guidelines on recruitment, computerization,
career progression, entitlement of benefits including leave, retirement,
termination etc. Strong and continuity of an organization is a pre-requisite for
drawing a suitable and sustainable HR Policy.
A good and well-defined HR Policy will not only ensure maintaining the
wellness of the organization inside, but it will also create a good image in the
society as well as job seekers. The need for a Human Resource Policy
particularly in member owned and member managed institution like PACS
requires hardly any emphasis. It‟s a matter of concern and regret that no well-
defined HR Policy was evolved for PACS in the last 100 plus years. The
image consequently the business of PACS suffered for want of this.
The Committee, accordingly, deliberated, extensively on the suggestions

received from different states, agencies like NABARD, State Governments,
Unions and Associations of employees, leading cooperators etc., during the
course of Consultative Meetings held in different states as explained in
Chapter-3 of the report. Similarly, the suggestions received from various
stakeholders through letters, mails etc., have also been factored in while
formulating the draft Human Resource Policy for PACS in the ensuing
paragraphs. In the contemporary era of technology driven business the
expectations and the desires of the stakeholders emanate from the services
and products offered by similarly placed institutions. Consequently, any
deficiency in the services provided by PACS as compared to the other
institutions in rural areas, most relevant in terms of reach and spread in rural
areas being India Post Payment Bank, weans away the clientele. In a
customer driven market, the expectations and aspirations of customers should
45 | P a g e
be given the highest priority in any business plan of the PACS. By virtue of
their organizational structure of member ownership, unique mandate, PACS
occupy an important role in the rural financial institution, PACS are unique in
providing end to end support and services to members, drawn predominantly
from the farming community. The USP of PACS is that, what all other RFIs can
do PACS can do but what PACS can do, others cannot do. It is in this context,
needless to emphasise that having proper Human Resources is the most
important factor for the success of PACS. Any organization is as good or as
bad as its human resources. Hence, a well thought out HR policy which
considers the entire gamut of operations of PACS - both present and in the
conceivable future is a pre-requisite for the wellbeing of PACS and their
stakeholders.
Till recently, PACS were virtually left out of the digitization plans excepting
sporadic attempts in some states. As a result, they could not leverage the
digital India initiatives and their relevance has also became a question mark.
The issue of PACS computerization is discussed under Chapter-7 of the
Report. In this context of imminent and inevitable computerization, the
Committee opined that HR policy should provide for skilled staff both in terms
of domain knowledge and in usage of technology with suitable incentives and
disincentives to attract and retain talent in rural areas. Skill up-gradation on a
continuous basis to meet the challenges of change in the environment and the
business processes also has to be a part of the HR policy of the PACS.
The Committee is aware of the fact that care has to be taken to understand
the Human Resource requirements of different grades of PACS, their ability to
pay, need for external financial assistance if any, features to attract talent as
well as retention of such talent over a long term through proper career path,
supporting the avowed objective of growth of PACS and reclaiming their
market share in rural credit.
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The Committee having considered various such aspects impacting the

formulation of a comprehensive HR policy for PACS makes the following
recommendations:
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4.1.1. Categorization of PACS:

Categorization of PACS is necessary to propose staff strength commensurate
with its business requirements. It is but imperative to provide for minimum
staff strength to a PACS to take care of its operations, despite its inability, if
any, to meet the current cost of establishment considering the nature of
operations. Having studied the different patterns of categorization in different
states with a very high to moderate levels of business across the states
visited as well as the inputs received from other states, the following
categorization is recommended for PACS based on the business volumes.
The business of PACS would include the following (as at the end of the
previous financial year as per the audited balance sheet:):
 Outstanding loans and advances.
 Deposits.
 Turnover in the other non-credit business activities*.
*Includes trading in agri-inputs, processing if any, marketing of produce
and other business activities like Petrol Pumps, RO water plants etc.
Table No. 4.1. Catagerization of PACS:
Sl. *Business level Category of PACS

No. (₹ In Crore)
1 Above ₹25 Cr and upto 50 ₹50 Cr A
2 Above ₹15 Cr and up to ₹25 Cr B
3 Above ₹10 Cr and up to ₹15 Cr C
4 ₹5 Cr and upto ₹10 Cr D
5 Below ₹5 Cr E
4.1.2. Recommended Staff Strength:

Table No. 4.2.
Sl. Grades Proposed staff strength
No. of PACS Chief Executive Assistant Development Total
Officer (CEO) Executive* Assistant**
#
1 A 1 4 2 7
2 B 1 3 2 6
3 C 1 2 1 4
4 D 1 1 1 3
5 E 1 0 1 2
* Assistant Executive cadre will include clerks, accountants, salesmen, computer operators
etc.
** Development Assistant cadre will include attenders, go-down keepers, machine operators,
drivers, night watchmen and other subordinate staff.
# The senior most Assistant Executive may be designated as Deputy CEO.
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PACS with business level of ₹50 Cr and above should be categorized as A +

and such PACS can decide the realistic staff strength based on their business
levels, types of activities and capacity to pay as per the NABARD guidelines
and in consultation with the DLEC.
4.1.3. a. The proposed categorization will encourage PACS to move upwards to the
next higher category through proper Business Development Plans.
b. The proposed designations as above will enhance the self-esteem of the
employees, standing in the society, provide role clarity and motivate them to
contribute better.
c. PACS which deliver multiple services may consider suitable augmentation
of staff depending on the workload and the number of activities, subject,
however, to conform to the overall capacity to pay norms of NABARD and
profit center concept. Seasonal businesses like procurement etc., have to be
managed with the help of temporarily outsourced staff. Their establishment
cost should be borne out of the commission/incentives earned under such
seasonal business activities.
d. Some of the states which are already implementing categorization of PACS
may realign the categorization as recommended above.
4.1.4. Assesment of vacancies:

DLEC will asses the present and future vacancies arising in the following two
financial years factoring in the surplus staff available in some societies if any.
This assessment by DLEC should be vetted by SLEC. For the purpose of
recruitment of new staff based on requirement arrived for each PACS, staff
existing as on the first day of the financial year and staff who are going to be
superannuated in the next two years may be reckoned.
4.1.5. Recruitment:
It has been observed that recruitment process at DCCBs and /or at PACS
level is not attracting talent from the market. As a pre-requisite for attracting
talent, the package offered to the recruits together with a well-defined career
49 | P a g e
progression path is to be laid down. The image of the institutions also plays
an important role in attracting talent. Good Governance enhances the image
of the organizations. Therefore, one of the major contributors to attract talent
is compliance with principles of Good Governance. The subject of
governance in societies is discussed in the chapter “Epilogue” of the report.
4.1.6. The recruitment process has to be uniform and transparent. The selection
has to be done in a professional manner. The recruitment of PACS staff may
be done once in two years, so as to ensure availability of qualified human
resources. If need be recruitment can be taken-up earlier / later based on
the necessity.
4.1.7. Selection Process:

For CEOs and Assistant Executives, the recruitment process will include
written test and interview. The written test should be conducted by
independent agencies like Cooperative Services, Recruitment Board (Kerala,
Uttar Pradesh etc.) or by C-PEC, NIRB, Bangalore.
Number of vacancies arrived in each category based on the staffing norms

suggested in the report prepared by DLECs and duly vetted by SLEC may be
submitted to Recruitment Board/IBPS, C-PEC, NIRB, Bangalore as may be
decided by the SLEC for the purpose of conducting the written test.
The recruitment process for the posts of CEOs and Assistant Executives
shall comprise a written test of 80 marks and interview for 20 marks including
weightage of 5 percentage points given to candidates holding HDC/ JDC /
PGDCRS / C-PEC certificates.
Recruitment to the posts of Sub-Staff shall be made through the local

employment exchange giving due preference to persons hailing from the
area of operation of the society.
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After the written test results are received from the agency concerned,
interviews, selection and allotment of selected candidates to PACS may be
done by the DLECs.
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4.1.8. Qualifications:
Qualifications required for various posts are specified as under:
a. CEO: Graduate from a recognized university. Degree or diploma in
Cooperative Management desirable. Knowledge in computers is
essential.
b. Assistant Executive: Degree from any recognized university with
proficiency in Computers.
c. Development Assistant: SSC Pass.
The existing CEOs and Assistant Executives who do not possess the
requisite qualifications as above and who have more than 10 years of service
shall acquire Degree/JDC/ C-PEC certificate within 5 years from the date of
adoption of these recommendations.
4.1.9. Reservations:
Rule of reservation as applicable in the state concerned shall be followed for
recruitment.
4.1.10. Validity of Selection List:

The selection list may be kept valid for three years from the date of selection.
4.1.11. Scales of Pay:

In the states visited by the Committee and as per the information received
through mails from different stakeholders, it is observed that there are no
uniform scales of pay for the staff of PACS. Different states are following
different models of salary payment to the PACS staff. For Ex: in Kerala
scales of pay are fixed based on the Government of India‟s Pay Revision
Committee recommendations (Modified Annual Career Progression Scheme).
In Andhra Pradesh and Telangana States, scales of pay have been

prescribed by the Government of Andhra Pradesh during 2009 before
bifurcation. The same scales of pay are being followed by the PACS in both
the states currently.
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Similarly, in Odisha the RCS has prescribed scales of pay for different
categories of PACS staff.
The Government of UP has prescribed scales of pay for different categories of

staff subject to earning capacity of the society as discussed in the para-3.3.6
which, however, is not being followed fully.
In case of Jharkhand, the Government has decided to organize one PACS per
one Gram Panchayat. It is also understood that the Government has
proposed to revive the cadre system for the PACS employees. However, no
uniform pay scales seem to have been prescribed as huge variations were
observed in pay scales in the societies visited by the Committee.
Considering the divergence of field level conditions of PACS, their earning

capacities, the geographical conditions as have been observed during the
field visits and taking in to cognizance the inputs received at the consultative
meetings, it is felt desirable and therefore, the present Committee as
envisaged under ToR have considered to recommend the pay scales
recommended by the Committee on HR Policy for PACS appointed by
Government of Andhra Pradesh, sometime ago.
The proposed pay structure for different categories of PACS staff is as under:
Table No. 4.3.
CEO 6975-320/2-7615-425/2-8465-510/2-9485-595/6-13055-
680/6-17135-765/6-21725
Assistant 6740-255/2-7250-320/2-7890-425/4-9590-510/6-12650-
Executive 595/4-15030-680/6-19110
Development 6550-215/6-7840-255/5-9115-320/4-10395-425/3-11670-
Assistant 510/2-12690-595/4-15070
The Committee recommends the above scales to the staff of PACS across
the country. However, if the staff of any PACS are drawing higher salaries
53 | P a g e
than the above already, they may continue with such better emoluments,
provided, the expenditure on manpower is in compliance with the NABARD
norms.
At present, the gross emoluments at the beginning of the scale and at the end
of the scale for each of the cadres work out as indicated below:
Table No. 4.4. Amount In ₹

Cadre Basic DA* HRA Fixed Gross
TA & DA
CEO
a) Beginning of the Scale 6975 2037 1000 1000 11012
b) End of the Scale 21725 6344 2000 1000 31069
Assistant Executive
b) End of the Scale 19110 5580 2000 750 27440
Sub-Staff
b) End of the Scale 15070 4400 2000 500 21970
* DA @29.20% of Basic Pay on par with the DA applicable to DCCB employees as of
September, 2018.
Note: Above HRA is taken as per the recommendations made herein.
4.1.12. Dearness Allowance:

Dearness Allowance shall be paid on the pattern adopted by the authority
prescribing the scales in the concerned states.
4.1.13. House Rent Allowance:

10% of basic pay subject to a minimum of ₹1,000/- and a maximum of
₹2,000/-. However, staff who have been provided residential quarters by the
societies will not be eligible for HRA.
4.1.14. Stagnation increments:

Three-stagnation increments equivalent to the last increment in the time scale
may be allowed after reaching the maximum scale @ one increment per two
years.
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4.1.15. Performance Incentive:

An incentive in the form of a bonus linked to performance of the society over
and above the business planned under annual Business Development
Program (BDP) will enthuse the staff to exceed their own planned
performance. Such an incentive should be linked to incremental business of
20% and above the BDP may be reckoned for the purpose of calculating
incentive i.e., on achieving 20% incremental business and profitability over the
BDP, a benchmark incentive may be allowed to the staff. Year on year
increase in the volume of business as may be incorporated in the BDPs
should be atleast on par with Banking Industry average in the state.
However, the overall expenditure on salaries has to be in conformity with the

capacity to pay norms of NABARD.
4.1.16. Travelling and Daily Allowance (TA&DA):

The nature of duty of PACS staff involves regular travelling with in the area of
operation of the society and therefore, it is recommended that a fixed TA &
DA may be paid to them every month. An amount of ₹1,000/- per month is
recommended towards fixed TA & DA to the CEO. Similarly, ₹750/- per
month and ₹500/- per month are recommended to Assistant Executives and
Development Assistant respectively. For the purpose of paying fixed TA/DA
an employee should tour a minimum of 10 days in a month.
This will avoid submission of bills, scrutiny etc., and at the same time facilitate
the field visits by the staff.
4.1.17. Professional Qualification Increment:

Regular updation of skills and knowledge are critical to the better performance
of staff. With a view to encourage PACS staff to acquire such skills it is
recommended that one advance increment should be granted in the time
scale for acquiring professional qualification i.e. Certified PACS Secretary
offered by C-PEC, BIRD, Lucknow. This increment may be given from the
date of announcement of results.
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4.1.18. Fitment:
The fitment in the revised scale of pay will be on stage to stage basis. There
shall be no change in the dates of annual increments because of the fitment.
4.1.19. Fixation:
Revised scales would be applicable from a date as may be fixed by the
authority prescribing the pay scales.
The Managements of PACS may not be allowed to change the pay scales.
However, PACS may consider providing additional productivity related
financial incentives to staff subject to conformity with the capacity to pay
norms of NABARD.
4.2. Other Welfare measures:

4.2.1. Insurance:
PACS employees may be provided Accidental Death and Life Insurance
Coverage. Additionally, health insurance cover may be provided to the
employee along with spouse and two dependent children with 50% premium
borne by the employee and the remaining 50% premium borne by PACS,
subject however to the condition that 50% premium should not exceed
₹2,500/- per annum. Any insurance scheme of the Government of India or
the State Government concerned may be used for these purposes. If any
better scheme is already in operation in any of the PACS, the same may be
continued.
4.2.2. Encashment of Earned Leave:

All the employees of PACSs shall be eligible for encashment of 240 days of
earned leave at their credit at the time of retirement on attaining the age of
superannuation/death.
Employees of PACS which are in profits may be allowed to surrender /

encash earned leave of not exceeding 15 days in a year. The employees of
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PACS which are dependent on DLSF are not eligible for such yearly
encashment.
4.2.3. Gratuity:
An employee after completion of 5 years of service shall be eligible for
payment of gratuity. For every completed year of service, the employee is
eligible to get 15 days of pay towards Gratuity, subject to a maximum of
₹2.50 lakh. The Managing Committee of the respective society shall
sanction the gratuity to the employee of Society.
SLEC / DLEC may facilitate adopting suitable group gratuity schemes of
insurance companies.
4.2.4. Death in Harness of Employee:

PACS will pay an amount of ₹5,000/- to the immediate family members of
their employees on the death of the staff members while in service. This
amount should be paid immediately after the death of the employee.
4.2.5. Festival Advance:

Employees of PACS which meet their establishment expenditure on their
own, without depending on the District Level Support Fund and having no
defaults to higher financing agencies will be eligible for Festival Advance
equivalent to one month pay (Basic + DA) recoverable in 10 equal monthly
installments without interest.
4.2.6. Personal Loan:

Confirmed employees of PACS who have completed 5 years of service will
be eligible for a personal loan of ₹1,00,000/-, at an interest rate not below the
interest charged on commercial lending / maximum lending rate charged by
the PACS to the ultimate borrower under any purpose. Such a personal loan
shall be repayable in 36 equated monthly installments (EMI).
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4.2.7. Maternity Leave:

Employees of PACS may be sanctioned maternity leave on par with the
respective State Government employees.
4.2.8. Pension Scheme:

In order to provide a dignified life in the twilight years of an employee‟s life
after retirement, it is recommended that a contributory pension scheme may
be implemented for the staff of PACS. A pension scheme is already being
implemented for the staff of PACS in Kerala through State Pension Board.
Similarly, based on Kerala scheme, Karnataka has formulated “Karnataka
Cooperative Societies Self-Financing Pension Scheme” which is under the
consideration of Government of Karnataka.
SLEC of each state may evolve and have it implemented a self-financing

pension scheme for PACS employees in their individual states, on the lines
of Kerala and Karnataka.
4.2.9. Career Progression:

One third of the vacancies in the posts of CEOs and Assistant Executives
arising within a district/DCCB shall be reserved for eligible candidates from
the PACS and in case eligible candidates are not available for the CEO/
Assistant Executive posts in the PACS, these vacancies may be filled by
direct recruitment by notifying the vacancies through SLEC as mentioned
above.
One third of the vacancies in the category of Staff Assistant in DCCBs shall
be reserved for the staff of PACS subject to the norms of eligibility for
recruitment. Age relaxation for this purpose shall be on the lines of respective
State Governments. Additionally, weightage points as given in Recruitment
Process above shall also be provided.
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4.3. Transfer:
4.3.1. Many requests / representations were made in writing as well as at the
consultative meetings held in the stakeholders that the staff of PACS may be
made transferrable. On considering these representations and in the interest
of promoting probity and professionalism in PACS the following
recommendations are made:
4.3.2. CEOs and Assistant Executives of PACS may be transferred within the
revenue division after every 5 years normally. Further, no CEO shall continue
in the same PACS for more than 8 years at a stretch. Uniform rules for charge
handing over at the time of transfer shall be framed by the SLEC.
4.3.3. Transfers shall be effected preferably, in the months of July/August so that the
loan recovery season is not disturbed.
4.3.4. The District Level Empowered Committee as mentioned shall be responsible

for effecting transfers based on the above parameters. In exceptional cases,
transfers may also be considered within 5 years in respect of any CEO/
Assistant Executive on specific grounds / valid reasons, as decided by DLEC.
4.3.5. In case of transfer of an employee from a society which is already compliant

with capacity to pay norms of NABARD to a society which is still not compliant
with the requirements, the DLEC has to factor in such additional gap funding
requirement of the latter society and provide financial support accordingly
from the District Level Support Fund. Such a transfer can also help in
improving the financial health of the weaker society with the induction of a
better skilled staff member who has already demonstrated his business
development acumen elsewhere.
4.3.6. Development Assistants will not be subjected to transfer policy. However, in

exceptional circumstances, DLEC may consider to transfer development
assistance within the revenue division.
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4.4. Compassionate Appointment:

Request for Compassionate Appointments received from the deceased staff
of PACS may be considered by the DLEC as per the policy of the concerned
State Government. Eligible candidates may be allotted to PACS where
suitable vacancies are available preferably within the same revenue division.
4.5. Maintenance of Service Registers:

4.5.1. Service Registers will be maintained for each of the staff members by the
respective PACS. The Service Registers may be maintained in duplicate with
one copy to be maintained by the PACS concerned and the second copy
maintained at the DLEC. Such SR shall be updated and authenticated by the
Branch Managers of the concerned DCCB every year. On transfer of a staff
member to another society the S.R. will also be transferred to the concerned
society after the entries till the date of transfer are authenticated by the
Branch Manager of the DCCB.
4.5.2. New recruits may be provided with uniform S.R. without giving scope for any
local designs etc. The NAFSCOB may develop and circulate uniform service
register format for adoption to the PACS staff.
4.5.3. In respect of existing staff, new S.R. system may be adopted within three
months from the date of adoption of these recommendations.
4.5.4. The terminal benefits accruing in respect of each PACS staff member have to
be remitted by PACS proportionate to the period of service rendered in the
said PACS into a separate account to be maintained by the DLEC. The
terminal benefits will be released by the DLEC. The detailed rules/operational
guidelines may be framed and necessary amendments may be made by
SLEC in the special bye-laws governing the service regulations of society
staff.
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4.5.5. Superannuation:
Age of superannuation for all cadres of PACS staff is recommended at 60
years.
4.5.6. Review of Pay Scales etc.:

a. Review of pay scales and other benefits may be done once in every
5 years.
b. Other aspects may be reviewed as per necessity.
4.6. Annual Performance Appraisal:

Performance appraisal of PACS staff shall be done every year based on the
business development with reference to BDPs including specific action plans
in respect of PACS not conforming to the capacity to pay norms of NABARD;
maintenance of books of accounts; conduct of compliance to regulations and
norms with negative remarks for any misadventures. NAFSCOB may evolve
a suitable Performance Appraisal System for different categories of staff of
PACS.
a. CEO: The CEO shall prepare a self-appraisal at the end of each financial
year and submit to the President of the PACS who will confirm the same
along with his comments / remarks.
b. Assistant Executive: Assistant Executive will prepare annual self-
appraisal report, which will be confirmed by the CEO.
c. Development Assistant: Performance Appraisal Reports of sub-staff will
be recorded by the CEO of PACS.
Copies of the self-appraisal reports and performance appraisal reports should
be filed in the SRs both at PACS and DLEC every FY year before September.
4.7. Sanction of Increment:

 The Board of Management of PACS shall sanction annual increments to all its
staff members.
 Increments shall be sanctioned subject to normal conditions and additionally
on the condition that the staff member concerned has undergone training at
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least once every year as detailed in the following paras dealing with training in
this report.
4.8. Disciplinary Policy:

 Disciplinary action can be initiated by the President of a society against the
CEO based on a valid complaint, audit report, inspection report or on
reference from higher financing agency or government or on the basis of a
court order. Due opportunity has to be provided to the CEO for putting forth
his/her point of view in defense of his/her position on the allegations/charges
levelled against him/her. The management of the society has to, where
necessary; conduct an enquiry into the allegations/charges against the CEO.
President of the society shall award punishment to the CEO based on such
enquiry report.
 For all other categories of staff, CEO is the disciplinary authority. The
procedure as above has to be followed.
 The DLEC which is empowered to transfer etc. is the Appellate Authority for
disciplinary action against CEO. In respect of other staff of PACS, the Board
of Management of respective societies shall be the Appellate Authority.
4.9. Outsourcing of Staff/Temporary Staff:

The management of the PACS may identify the requirement of additional staff
to meet seasonal requirements likesale of fertilizers, seeds, pesticides etc.,
and procurement of agricultural produce etc. In such situations the CEO as
empowered by the management PACS may hire additional staff on ad-hoc
basis for supporting the seasonaloperations. However, the expenditure on
such outsourced staff has to beborne by the PACS concerned out of the
income earned from such activitiesonly and shall have no claim over the
general funds of the PACS or DistrictLevel Support Fund.
4.10. Training and Capacity Building System for Societies:

4.10.1. Capacity building of staff is a continuous process to upgrade their skills and
knowledge so as to meet the challenges of ever changing and competitive
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environment in which the PACS are functioning. It is observed that, training is

imparted to the PACS staff more as a ritual than as a tool to improve their
skills. Continuous training provides exposure to emerging challenges and
keeps the PACS staff in a battle-ready mode.
4.10.2. SLEC/DLEC may cause a Training Needs Analysis (TNA) for PACS staff and
coordinate with different training establishments to ensure that requisite
training is extended to all PACS staff. Every employee of the PACS shall
undergo training / skill upgradation / reorientation programs for at least once
in every calendar year.
4.10.3. Broadly, training in following areas is suggested for different categories of

PACS staff:
a. CEO: Business Development Plans, Asset Liability Management (ALM),
Risk Management, Governance issues – Dos and Donts, Supervision and
Audit in computerized environment, Internal Checks and Controls
Mechanism, Disciplinary Action, Procedure and Practice, PACS as profit
center, Recovery and NPA Management etc.
b. Assistant Executive: Common Accounting System (CAS), Management
Information System (MIS), Audit in computerized environment
c. Development Assistant: General orientation on the activities of PACS.
4.10.4. Training programs should be conducted, preferably, for short durations at the
DCCB level to facilitate better participation of the staff of PACS.
4.10.5. The DLEC may arrange to send select CEOs of PACS who show promise, to
premier training institutions like VAMNICOM, BIRD, CAB etc. and also for
exposure visits to other states. Such cost shall be borne by the DCCB from
appropriate fund, CDF of NABARD or ICDP funds as it can be considered as
a management development initiative.
4.10.6. It is a common experience that majority of the staff deputed for training shy
away because of the monetary considerations such as financial constraints
at PACS level for payment of T.A., D.A. though the training as such is
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provided free of cost under various schemes of NABARD, SCB etc. It is

therefore necessary that the DCCBs invest in the training of PACS staff by
subsidising the TA expenditure fully.
4.10.7. Training programmes attended by the PACS staff shall be noted in their
Service Registers.
4.10.8. The DLEC shall evolve a mechanism to compile and continuously update
data on the training programmes attended by the individual staff members of
PACS.
4.10.9. It has to be ensured that every employee of society undergoes at least one
training program in a year.
4.10.10. In case a staff member does not attend any training program on being
nominated to attend, such a refusal shall be recorded in the SR of the staff
concerned. Such an entry will be given due negative weightage while
considering him/her for increment and promotion.
4.11. Induction Training:

Upon recruitment of staff to societies, an induction program has to be
arranged inevitably, for such new recruits to give an orientation of the rural
finance cooperatives, fundamentals of finance and accounting cooperative
societies Act etc.
4.12. Orientation Programs for Elected Board Members:

The managements of the societies are elected bodies whose term of office is
normally 5 years. In order to provide them an insight into the functioning of
the societies, laws governing the societies, the business opportunities, dos
and don‟ts and governance issues, an initial orientation cum training program
may be conducted for all the newly elected directors preferably during the first
year itself.
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C-PEC offers “Certification Course on Corporate Governance for

Leaders/Board of Directors of Cooperatives” which can be made use of.
Periodical refresher courses may also be conducted for the members of the
boards of managements preferably at a place away from the state and district
headquarters so as to provide them an undisturbed atmosphere/ambience.
4.13. Capacity to Pay norms prescribed by NABARD:

As decided by the National Implementing and Monitoring Committee (NIMC),
NABARD had communicated expenditure and manpower norms for PACS
subject to the capacity to pay norms (Annexure-7).
4.14. District Level Support Fund (DLSF):

PACS should conform to the guidelines issued by NABARD on expenditure
and manpower norms and capacity to pay. In case of PACS, which do not
conform to the above guidelines of NABARD, in states having 3-tier structure,
a District Level Support Fund (DLSF) may be created as discussed below:
 DLSF in the nature of revolving fund.
 Contribution to DLSF.
i. In case of PACS, which do not conform to the „Capacity to Pay‟
guidelines of NABARD, in states having 3-tier structure, financial
support may be extended from DLSF.
ii. Contributions to DLSF to be from SCB, DCCB, State
Government and NABARD (out of CDF provisions).
iii. If both SCB and DCCBs are in „Net Profit‟ for the preceeding
year, then the sharing between SCB and DCCB would be equal
(i.e., 50% each), to the full requirement of DLSF.
iv. If SCB in profits and DCCBs are under „Losses‟, then the portion
of DCCB, would be met from NABARD – CDF provisions, in
addition to the contributions of SCB, State Government and
NABARD, in the ratio of 25% and 25% respectively.
v. If SCB in profits and DCCBs are under „current year operating
profit‟ through account losses are persisting, then the sharing of
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DLSF would be 25% each between SCB, DCCB, State

Government and NABARD (CDF).
vi. If both SCB and DCCBs are in „Losses‟, then SCB and DCCB
may not be able to contribute and the DLSF requirement in full
would be shared between State Government and NABARD
(CDF provisions) i.e., 50% each.
For PACS which do not conform to the capacity to pay norms of NABARD, a
5-year time line may be given for achieving sustainable viability. During this
period, such societies will receive finanaial support in the form of interest free
loan from the DLSF recommended above, on a tapering basis, @ 100%, 80%,
60%, 40% and 20% during the 1st, 2nd, 3rd, 4th and 5th year respectively. These
PACS should prepare specific Business Development Plans for viability, to
comply with the NABARD guidelines on capacity to pay within a period of 5
years and enter into an agreement with DLEC with due approval from their
Board of Directors. The implementation of these action plans will be reviewed
before the release of 2nd, 3rd, 4th and 5th year support. For the purpose of
arriving at the quantum of support to be released to these weak societies, the
societies have to prepare projected cash flow statements as part of the BDPs
and present to the District Level Empowered Committee (DLEC)
recommended in the Chapter-5 on implementation mechanism. The gap in
income as projected in the cash flow statements has to be reviewed and
confirmed by the DLEC before release of financial assistance/gap funding.
4.15. The period of assistance to PACS:

 Normally 5 years on tapering basis @100%, 80%, 60%, 40% and 20%
during 1st to 5th year respectively.
 However, if the PACS complies the capacity to pay norms during the 5-
year period of DLSF assistance, the assistance under DLSF shall be
stopped.
 In other words, the PACS would be eligible to get assistance from DLSF,
as long as the PACS could not comply to the capacity to pay norms.
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4.16. Repayments to DLSF:

Once the PACS, which is under assistance from DLSF, has come to the level
of complying to the capacity to pay norms, then the PACS should start
repaying to DLSF in a phased manner i.e., in 5 years.
PACS, which seek support from the DLSF, should have their statutory audit
completed for the immediate preceding FY and furnish such audited accounts
to the DLEC along with their request for financial support from DLSF for
following year.
The inspecting authorities/supervisors, while inspecting PACS, have to

examine and comment on the utilization of DLSF by PACS along with
compliance with the BDP furnished to DLEC.
NABARD in consultation with a few States may evolve detailed operational

guidelines for quantifying the contributions to DLSF, calculation of eligibility
and release to PACS, proforma for calculating the gross income and/ turnover
as per capacity to pay guidelines of NABARD, action in case of PACS not
complying with capacity to pay norms even after the prescribed time frame
and so on including the recommendation as at para 8.5. This would facilitate
uniform implementation by all the states.
“You cant have a better tomorrow if you are thinking about yesterday all
the time” - Charles F. Kettering
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5. MECHANISM FOR IMPLEMENTATION
“Faith is taking the first step even when you don’t see the whole stair
case” - Martin Luther King Jr.
5.1. Taste of pudding lies in eating. The efficacy of any recommendation will
depend upon how well they are implemented. Hence, there is a strong felt
need for a well-defined mechanism for implementation and monitoring of the
recommendations. Keeping this in view, the Committee recommends setting
up of Mechanism for Implementation at State and District Levels as discussed
in the ensuing paragraphs.
5.2. District Level:

A District Level Empowered Committee (DLEC) may be constituted at the
district level for implementing and monitoring the various recommendations of
the Committee as indicated below:
Table No. 5.1. District Level Empowered Committee
Sl. Designation Committee
No.
1 President, DCCB Chairman
2 Dist. Coop. Officer Member
3 Dist. Dev. Manager, NABARD Member
4 CEO of DCCB Member / Convener
5 Presidents of two PACS Special Invitees
5.3. The DCCBs shall provide necessary secretarial support to the DLEC besides
maintaining all the records. The monitoring of training of PACS staff may also
be done by such secretariat as information in this regard will be an important
input while considering various proposals by the DLEC. For example,
promotions, transfers to higher category of PACS etc. The DLEC may meet at
least once in a quarter. Additional meetings could be convened as per the
requirements.
5.4. The District Level Support Fund shall be administered by the DLEC.
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5.5. Broad functions of DLEC:

 Assessment of vacancies in the PACS and getting approvals from SLEC
conduct the recruitment to such vacancies, interviews selection and
allotment to PACS.
 Training to PACS staff and maintenance of such record and entry in
respective SRs identification and adoption of group gratuity and insurance
schemes for PACS staff.
 Critical review of BDPs vetting and approval.
 Monitoring the implementation of BDPs.
 Identification of PACS requiring support from DLSF.
 Assessing the gap funding requirement of PACS basing on the structured
data provided by PACS.
 Administering DLSF.
 Monitoring SRs and performance appraisal repports of staff and ensuring
periodic updating and authentication.
 Monitoring and maintenance of terminal benefit accounts of the staff of
PACS.
 Appeallate disciplinary authority for the CEOs of PACS.
 Transfers of PACS staff.
 Causing TNA for PACS staff and maintaining records of training
undergone by staff of PACS.
 Timely audit of PACS
 Calculation of imbalances and NPAs
 Other parameters as per NABARD guidelines
 Proposing penal clauses for not complying with any of the stipulations
5.6. State level:

A State Level Empowered Committee (SLEC) may be constituted as under
forguiding, reviewing, monitoring the implementation of the recommendations
of the report and ensuring availability of proper human resources in PACS.
Table No. 5.2. State Level Empowered Committee
Sl. No. Designation Committee
1 President, SCB Chairman
2 RCS Member
3 CGM, NABARD Member
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4 M.D. SCB Member / Convener

5 Presidents of two DCCBs Special Invitees
The SCB may provide necessary secretarial support to thecommittee. The

committee shall meet atleast once in a quarter.
5.7. Broad functions of SLEC:

 Review of assessment of vacancies submitted by DLECs.
 Training needs analysis for PACS and coordination with different training
establishments to ensure that requisite training is extended to all PACS
staff.
 Preparation and circulation of uniform SR for PACS staff.
 Approval of the BDPs and periodical review of their implementation by
PACS.
 Ensure adherence to guidelines on assessment of fund requirement form
DLSF and releases thereof.
 Amendments to Acts and Rules.
 Administering self financing pension scheme for PACS employees.
 Review the work of DLEC.
 To obtain data from all PACS before October every year and view the
same critically.
 To advise DLECs on performance of individual PACS.
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6. HR Policy as applicable to states with 2-tier structure
“Small deeds done are better than great deeds planned”

- Peter Marshall
6.1. States located in the North Eastern Region (NER) and a few other smaller
states like Delhi, Goa, Puducherry, Andaman & Nocobar have 2-tier STCCS
comprising of SCBs at the Apex level and PACS/LAMPCS at the primary
level. Some of the states like Himachal Pradesh have a mixed structure.
Recently the state of Jharkhand has also introduced 2-tier structure by
merging the DCCBs (excepting Dharbanga DCCB) with the SCB. Hence, the
Committee felt the need for examining this issue separately and suggest
modified implementation mechanism to meet the specific needs of these
states.
6.2. PACS in NER:

Spread of PACS as well as bank branches is very thin – as on June, 2018,
only 3% (4499) of the total commercial bank branches (1,49,588) in the
country are located in NER (Source: RBI website).
The status of primary societies in the North Eastern Region was discussed in
Chapter-3 dealing with status of PACS in the states visited by the Committee.
For state-wise details Annexure-8.1 may be referred.
 As may be seen, the number of PACS in NER as a percentage of the total
number of PACS in the country constituted 3.75%, and the membership
constituted 2.89%. The total number of borrowers formed a miniscule of
0.40% of the total number of borrowers in the country. The loans
disbursed, the loans outstanding are so negligible as a percentage of the
national aggregates, there is no need to make a mention.
 Loans outstanding per employee is only 0.52% of the national average,
while staff strength in NER states forms 7.41% of the total staff employed
by primary cooperatives in the country.
 Most of the PACS were involved in PDS with very low credit offtake.
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6.3. Status of Books and Records:

Books of accounts in PACS are not up to date and not maintained properly. It
was observed during the field visits that only cash books are maintained in
PACS, with no subsidiary ledgers and General Ledgers in PACS. The PACS
staff do not have any knowledge of their outstanding borrowings from SCB
and merely remit their loan recoveries to SCB branches without any
knowledge of dues. CAS and MIS recommended by NABARD has not been
implemented.
6.4. Status of HR:

Most PACS have skeletal staff or staff working on part time basis i.e., part of
the day they work for the society, while, during the remaining part of the day
they work on their farms etc. The reason being low emoluments paid to the
staff owing to the financial incapability of the society. The poor emoluments
and absence of a defined career path to staff in PACS come in the way of
attracting talent. This is also a reason for serious shortage of staff in certain
societies and excess staff in certain other societies in the region.
6.5. Disconnect:
The Committee observed a kind of disconnect between SCB and PACS in the
states visited. It was also observed that there was lack of supervision and
guidance to PACS from SCBs.
6.6. HR Policy for PACS of NER:

The recommendations made by the Committee on HR Policy at Chapter–4 of
the report will be applicable mutatis mutandis to PACS/LAMPCS of NER also.
Specific recommendations in respect of gap funding for meeting the staff

cost in PACS and implementation mechanism as detailed below which differs
from the recommendations for the 3-tier structure may be adopted by states of
NER:
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a. Gap Funding for PACS staff cost:

On arriving at the gap in the funds requirement for each PACS to meet its
staff cost subject to the conditions prescribed at the relevant para of
Chapter-4 of the report, the same may be considered by the SLEC of
respective states for approval.
b. State Level Support Fund (SLSF):

The SLSF would be in the nature of revolving fund.
Gap funding under the title State Level Support Fund (SLSF) may be
provided to PACS in NER for a period of 7 years as against 5 years
recommended for PACS in the 3-tier structure in the following pattern –
100%; 90%; 80%; 60%; 50%; 40% and 20% respectively.
Further, it is also recommended that following the pattern of funding in

various other schemes of GoI for NER, 90% of the gap funding may be
met by the GoI and/or NABARD (from Cooperative Development Fund)
with the remaining 10% shared by the State Governments and the SCB
equally. The Government of India and respective State Governments
should view this financial support as an investment for strengthening the
STCCS in the region leading to overall development.
c. Implementation Mechanism:
For the NER, there will be only one Committee at the state level with the
responsibility of implementing the recommendations and monitoring the
progress in implementation. Thus, the State Level Empowered Committee
(SLEC) shall be the sole monitoring and implementing instrument for the
PACS in NER and all the responsibilities recommended for the DLECs
have to be carried out by the SLEC in NER.
6.7. The period of assistance to PACS:

Normally 7 years on tapering basis – 100%; 90%; 80%; 60%; 50%; 40% and
20% respectively.
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However, if the PACS complies the capacity to pay norms during the 7-year
period of SLSF assistance, the assistance under SLSF shall be stopped.
In other words, the PACS would be eligible to get assistance from SLSF, as
long as the PACS could not comply to the capacity to pay norms.
6.8. Repayments to SLSF:

Once the PACS, which is under assistance from SLSF, has come to the level
of complying to the capacity to pay norms, then the PACS should start
repaying to SLSF in a phased manner i.e., in 7 years.
6.9. State level Committee:

The State Level Empowered Committee (SLEC) may be constituted as under
for guiding, reviewing, monitoring the implementation of the recommendations
of the report.
Table No. 6.1.
Sl. No. Designation
1 President, SCB Chairman
2 RCS Member
3 OIC, NABARD Member
4 CEO/M.D. SCB Member / Convener
6.10. Instead of DLSF, in the NER states, the State Level Support Fund (SLSF)
may be created as suggested earlier and administered by the SLEC.
6.11. All the functions listed for DLSF in the 3-tier structure will be applicable to
SLEC in NER.
The SCB shall provide necessary secretarial support to the SLEC besides
maintaining all the records. The monitoring of training of PACS staff may also
be done by such secretariat as information in this regard will be an important
input while considering various proposals by the SLEC.
6.12. Way Forward for STCCS in NER:

While infusion of proper human resources and adoption of technology are the
prime requirements for PACS/LAMPCS in NER, it is also required to
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understand the ethos and working of PACS in the region followed by

understanding the geographical and other constraints.
A detailed analysis of the agriculture and non-agriculture business potential

available in the region factoring in, PLPs, State Plans, of NABARD and other
documents is essential for developing BDPs for the PACS in the region.
Training and capacity building both for the staff and the managements is an
important factor for the successful implementation of the action plan in NER.
Therefore, SCBs have to play the role of leaders of cooperative movement in
the state by reorienting and securing inclusion of PACS as part of STCCS.
Alongside, SCBs have to evolve a proper system for guiding, supporting and
monitoring of PACS while effectively involving the respective State
Governments and their agencies for making PACS a focal point/hub in the
economic development of rural areas channelizing the efforts of different
Government Departments and Agencies involved with rural development,
through PACS.
Care has to be taken to ensure coordination among SCB, Cooperative

Department, Line Departments and PACS/LAMPCS.
It is, therefore, imperative that preparation and implementation of a

comprehensive business development plan for each society basing on the
above comprehensive study has to be done forthwith.
A comprehensive study of STCCS in each of the states of NER may be taken

up jointly by NAFSCOB, NABARD, State Government and SCB with a well-
defined ToR - for strengthening the STCCS of NER and transforming it in to a
vibrant, viable structure contributing to the development of agriculture and
rural sector of the region.
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6.13. States (other than NER) having 2-tier STCCS:

As mentioned earlier some other states and Union Territories like Andaman &
Nicobar, Chandigarh, Delhi, Goa, Puducherry have the 2-tier STCCS,
whereas, Himachal Pradesh has a mixed structure with one DCCB and rest 2-
tier structure. State-wise information is given in Annexure-8.2.
In these states, also recommendations of the Committee will be applicable for

all aspects. However, implementation mechanism as recommended for the
NER may be followed.
Further, in these states, the SCB has to provide the funding support along
with the state government concerned and NABARD (Cooperative
Development Fund) to meet the gap in the staff cost.
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7 - COMPUTERIZATION OF PACS
“The secret of getting ahead is getting started” - Mark Twain
7.1.1. Prof. Vaidyanathan Committee had laid a lot of emphasis on infusion of

Information Technology in STCCS at all levels and made exclusive financial
allocation of ₹516 cr for the same. While computerization of SCBs and
DCCBs has progressed rather well and most of the banks are on CBS
platform thanks to the Computerization Project taken up by NABARD in 2013,
computerization of PACS remained a far cry. Though some sporadic
initiatives were taken in different states, not much progress have been made,
with the exception of Telangana and to a certain extent in Odisha and Uttar
Pradesh. PACS in Kerala however, adopted stand alone computerization
model.
7.1.2. The Governments have implemented DBT, digital India, financial inclusion
initiative etc., but PACS were left out of this initiative for want of
computerization of their operations. PACS, in the process, were deprived of a
huge business opportunity. The recent development in the form of India Post
Payment Bank having deep penetration and spread comparable with PACS
and Small Finance Banks, Payment Banks etc., is an issue which reinforces
the need to take a quick review of the position obtaining in PACS in terms of
their competitive edge and their ability to serve and meet the needs of their
clientele.
7.1.3. The Government of India have made a budgetary provision of ₹1,900/- cr for
computerization of 63,000 PACS across the country in the budget for the year
2017-18. However, it is observed with concern that even after a year it is yet
to takeoff.
7.1.4. The status of computerization in different states that were visited by the
Committee is discussed in the following paragraphs.
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7.2.1. Odisha: The State Government supported PACS computerization project

which was initiated in the year 2014-15. The entire cost of Computerization of
State Cooperative Banks, DCCBs and PACS has been funded by the State
Government. The PACS computerization was taken up as an extension of
the CBS program that was already working in the DCCBs and SCB. PACS
computerization does not seem to be a specially designed ERP, as they have
whole range of activities in addition to the basic banking activities like deposit
mobilization and lending as such it addresses only a part of PACS activities.
7.2.2. The challenges in PACS computerization project are poor internet connectivity
in the rural areas; reluctance on the part of employees to work on the systems
despite the installation of the software and imparting of training to them and
so on - resistance to change.
7.3. Uttar Pradesh: The computerization of PACS is currently in progress. Out of

3,965 PACS it was stated that 639 PACS have been computerized and work
was in progress in another 726 PACS. In the remaining PACS work was yet
to commence. The PACS are connected to DCCBs‟ Core Banking Solution
(CBS) with transactional data sharing on real time basis. The State
Government has sanctioned ₹30.96 crore towards its share for
computerization of 2,500 PACS in the first phase of Government of India
Scheme. The software deployed doesn‟t seem to be compliant with the CAS
guidelines of NABARD.
7.4.1. Kerala: The PACS have their own computers working either on a standalone
system or on TBS. The computerization of PACS was undertaken as a
spinoff effect of demonetization of ₹1,000/- and ₹500/- notes in the year 2016
when the customers of PACS were not treated as bank customers. Thus, the
PACS have been taken on board by the DCCB for the purpose of
computerization maintaining a mirror account of PACS customers at DCCB.
7.4.2. Since, Kerala did not opt for Revival Package given by Government of India
through NABARD, the PACS in Kerala do not follow the Common Accounting
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System (CAS) communicated by NABARD as part of the package. Instead,

they follow the CAS mandated by the State Government. Therefore, the
software being used by the PACS is different in each of the societies
excepting for the Common Accounting System. A pilot for PACS
computerization has been going on for the past 3 years in the PACS under
Idukki DCCB. It was given to understand that the progress has been tardy.
7.5.1. Meghalaya, Assam: These states have not so far attempted any
computerization program for PACS. However, some of the PACS in Assam
do have computers provided to them by the State Civil Supplies Department
with an exclusive software to cater to the procurement operations undertaken
by the PACS on behalf of the Government.
7.5.2. Jharkhand:
It was noted that the Jharkhand State Government is keen on computerization
of PACS and has completed tendering process for the same. A final decision
is awaited from the State Government. The State Government has promised
financial assistance for the project. It is, however, not clear as to how
computerization of PACS can be contemplated without implementation of
Common Accounting System and Management Information System as well as
standardizing the procedures and operations of the societies.
7.6. Karnataka:
As per the information furnished to the Committee, some of the PACS in
Karnataka have been computerized sporadically and on offline basis. Most of
the PACS in the Kodagu DCC Bank area whose information has been
provided to the Committee have been computerized with one or two modules
only i.e., PDS, Trading, Credit. As such, it cannot be viewed as a
comprehensive computerization of PACS. Information furnished by DCC
Banks viz., Mandya and Canara DCC Bank, Sirsi shows that none of their
PACS have been computerized, Bidar DCC Bank informed that out of 171
PACS 25 have been computerized and at present the implementation is
“undertrials”. Out of 195 PACS under Hassan DCC Bank 15 PACS have
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been reported to the computerized. However, no details of the features of

software deployed have been provided.
Thus, computerization of PACS in Karnataka also does not seem to have

made much progress.
7.7. Andhra Pradesh: Computerization of PACS was initiated on an ambitious

note in the year 2008 as per the G.O. of the Government of Andhra Pradesh.
However, the project remained either incomplete or a nonstarter or
abandoned half way through by the service provider. It is understood that out
of 2,050 PACS, about 600 PACS were taken up for computerization and only
about 300 PACS are said to be using the same. It is understood that there is
no support from the service provider as the field staff have been withdrawn by
them. It is also understood that the service provider has submitted that it
would be not possible for the company to continue with the project. Thus, the
computerization of PACS has received a set-back and is delayed adversely
affecting the business development in particular and revival process in
general.
7.8. Telangana: The state has the unique distinction of computerizing all its 798
PACS through a common ERP solution enabling better financial
management, MIS and monitoring of PACS activities among others for
informed decision making and for taking quick corrective actions where
necessary. The ERP solution has more than 20 user friendly modules
covering important aspects of business operations viz., membership, savings,
deposits, term deposits, thrift deposits, investments, loans, borrowings,
assets, cold storage, trading, procurement and processing, public distribution
system (PDS), lockers, audit module, CAS, MIS, financial accounting system,
MIS consolidation at DCCB and SCB level, user management, product
configuration.
7.9. In addition, the software also takes care of Governance, HR issues like
salaries, leave etc., It is a commendable initiative worth emulation by other
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states, very quickly, in view of the ever increasing and formidable competition
from other Rural Financial Institutions as well as India Post Payments Bank.
Computerization of PACS also helps PACS to continue their relevance to their
stakeholders who desire quality service comparable with other players in the
market.
7.10. Under these circumstances, computerization of PACS is no longer an option

but it is an essential part of the survival strategy. Hence, computerization of
PACS will have to be taken up on an accelerated and mission mode so as to
be relevant to their stake-holders and to face the challenges of competition.
From the point of view of higher financing agencies and the regulators,
computerization of PACS will provide real time information for taking informed
decisions and for formulating appropriate policies. Computerization will also
make the decision making at the PACS level faster and reduces the drudgery
of staff in maintaining record of their operations manually. Without losing
further precious time computerization of PACS should be taken up on top
priority basis.
7.11. Therefore, the Government of India having made a budgetary allocation, way
back in FY 2017-18, for the purpose, should give a definite shape and
direction for accelerating the process of computerization of PACS. In fact,
various departments of Government of India and State Governments which
are mandated with the responsibility of rural development should consider
PACS as the convergence point for their efforts, eliminating coordination
issues and for ensuring effective implementation of their rural development
projects. NABARD also has responsibility to ensure fast track
computerization of PACS. In fact, PACS are the most important and last point
of contact in the chain of agriculture credit dispensation running into several
thousands of crores of rupees and for providing various agri-development and
extension services to farmers in particular and rural populace in general.
Computerization of PACS ensures transparency in operations, real time data
availability to decision and policy makers helping them to take informed
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decisions and facilitates real time corrective actions besides supporting policy
formulation.
7.12. Other Recommendations:

7.12.1. As a prelude to computerization of PACS, implementation of Common
Accounting System (CAS) and Management Information System (MIS) as
prescribed by NABARD is necessary.
7.12.2. Standard Operating Procedures (SOP) and Formats have to be developed

and put in place across the societies for uniformity and easy computerization.
7.12.3. Uniform Training Modules on PACS computerization for imparting training to

the society employees, society inspectors and society auditors have to be
prepared and such training imparted.
7.12.4. Computerization of PACS should be a comprehensive ERP solution for all

the activities and also should take care of emerging new business
opportunities.
7.12.5. Computerization of PACS should be the top most priority of all stakeholders
including GoI, NABARD, State Governments, SCBs, DCCBs etc. This
should be completed in a time bound manner in the next 2-3 years.
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8. EPILOGUE
“You may never know what results come of your actions, but if you do
nothing, there will be no results” - M.K. Gandhi
The ToR of the Committee broadly confine to the HR issues at PACS level and the
Committee has made sincere attempts to evolve a proper, desirable and
implementable HR policy as discussed in the preceding chapters. The Committee
also emphasized on the need for accelerating the process of computerization of
PACS. The Committee, however is of the view that, while proper HR and
computerization are the two prime requirements for strengthening and making PACS
vibrant, there is a need to examine a few other areas which are equally important
and are needed equally for the overall strengthening process of PACS. Some of
these are discussed in the ensuing paragraphs.
8.1.1. Governance beyond Human Resource:

 Governance is all about how an institution fulfills its mandate to its
members and other stakeholders. It is about commitment to values and
ethical business conduct and a high degree of transparency. The
governance structure defines the distribution of rights and responsibilities
among the different participants in the organization such as the board,
executives, shareholders, borrowers and the government and spells out
the rules and procedures for making decisions on affairs of the institution.
 With regard to governance in financial institutions, the issues involved
include greater transparency in balance sheet, appropriate internal control
systems and having defined and well stated policies. The board is
expected to exercise objective judgment, provide direction, oversee and
monitor and act in good faith, emphasis ethical practices, review
performance of top management etc.
 While the Board is responsible for framing policies, sanction various
proposals as per bye-laws, the management is responsible for day to day
operations and implements the decision of the Board. The Board should
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provide adequate operational freedom to management and avoid micro-

management of day to day operations.
 It is, in this context, the Committee recommends that Directors of PACS

have a major role and stake in the effective functioning of PACS. They
should be provided with proper orientation and vision equipped with
necessary capacities on an ongoing basis to fulfill their responsibilities
effectively.
 A recommendation has already been made at paragraph 4.12 of the report
regarding Induction Training and refresher courses for the societies‟
managements.
 Fit and proper criteria prescribed for the elected Directors of the DCC
Banks and the State coop Banks should be made applicable to PACS.
 The inspection and audit of PACS has to be made very effective with the
DCCBs conducting inspections periodically and ensuring compliance by
the PACS on the observations made during inspections and audit. The
compliance has to be ensured in the given time frame instead of allowing it
to become rig morale.
 NABARD has prescribed agenda items to be placed before the board of
management of DCCBs and SCBs, compulsorily, along with the regular
subjects. Similar prescription has to be given to PACS also. NABARD
may evolve suitable guidelines for uniform implementation across the
country.
 CRAR norms and IRAC norms have to be made applicable to all PACS,
though, at present, certain states have adopted.
 The following provisions of the APCS Act and Telangana State
Cooperative Societies Act may be implemented in other states too:
“A Member of the Legislative Assembly of the State, a Member of either House of the
Parliament, Mayor of a Municipal Corporation, Chairman of a Municipal Council, elected
member or Chairman of Zilla Parishad or elected member or President of Mandal Parishad or
Sarpanch of a Gram Panchayat shall be eligible to be elected as a Member of the Committee;
but he shall cease to be a member of the Committee unless within fifteen days from the date
of becoming a member of the Committee he ceases to be a Member of the Legislative
84 | P a g e
Assembly of the State or a Member of either House of the Parliament, Mayor of a Municipal
Corporation, Chairman of a Municipal Council, elected Member or Chairman of a Zilla
Parishad or elected member or President of a Mandal Parishad or Sarpanch of a Gram
Panchayat by resignation or otherwise ; and if a member of the committee is subsequently
elected to any one of the aforesaid offices, he shall cease to be the member of the committee
unless within fifteen days from the date on which he is elected to any one of such offices he
ceases to hold such office by resignation or otherwise.
…. (a) No person shall, at the same time, be a member of the committee of more than two
societies which under the rules, are classified as apex societies, or as central societies, or of
the committees of more than apex society and one central society.
(b) If any person, on the date of his election of appointment as a member of the committee, is
a member of the committees of two societies as specified in clause (a) and the committee to
which he is elected or appointed on that date is the committee of any apex society or central
society, then, his election or appointment on the date aforesaid shall be void………”
 Similarly, NAFSCOB may study the Acts of other states and suggest
incorporating such good practices in all the states.
 Active participation of members in the affairs of the society will ensure

fostering the democratic character of PACS. Hence, member education,
member contact should be given due importance.
8.1.2. MIS:
It is observed during the field visits, that CAS and MIS prescribed by NABARD
are not being followed by the PACS nor is there any penalty being imposed
for such non-compliance. Without losing further time, CAS and MIS with
special focus on implementation of IRAC norms should be operationalized in
all states as well as process of computerization. It may also be examined
whether any revision is needed in the context of present stipulations of NPA
calculation and other emerging businesses.
8.1.3. Use of Technology:

In the contemporary business environment driven by technology, the PACS
have lost enough ground to other rural financial institutions for want of
85 | P a g e
computerizing their operations. Computerization of PACS is a must and

brooks no delay. Technology can be used for offsite monitoring of the daily
activities of the PACS besides, being a tool for providing better services and
quality MIS for the system.
8.2. Rationalization of procedures: It‟s a common experience of members that

CCS has cumbersome procedures in sanctioning of loan etc., causing
avoidable delays and hardships. Hence, there is a felt need for bringing out
uniformity and rationalization of procedures in respect of loans, deposits,
investments, etc., in the light of the manuals prepared and circulated by
NAFSCOB. In case any modifications are required, the same may be carried
out by SCBs.
8.3. Business Development:

8.3.1. BDPs for PACS:
As observed in the context, PACS have the potential and opportunities to
become the economic hub in their area of operation, by providing all services
required by their members. Hence, it is imperative for PACS to have a proper
Business Development Plans catering to the needs of members and the rural
communities.
Preparation and implementation of Business Development Plans is not a new

phenomenon as such. It emerged as an outcome of the recommendations of
“Report of the Agricultural Credit Review Committee” under the chairmanship
of Dr. A.M. Khusro, constituted in August, 1986 by RBI. However, over the
years BDPs have become a causality of the indifference of the higher
financing agencies and regulators equally as they do not seem to have
appreciated the true potential of such exercise. The reason for such
negligence is that there is neither incentive nor disincentive for the preparation
and implementation of BDPs. NABARD has taken-up a commendable
initiative of converting PACS, which hitherto provided mainly credit, into multi-
service cooperatives catering to all the requirements of members. PACS
86 | P a g e
eventually should become multi-service cooperatives and BDPs should

become an effective medium to secure this.
8.3.2. PACS Development Cells:

PACS Development Cell (PDC) scheme implemented by NABARD has been
successful in many DCCBs. On similar lines, PDC as a shared resource
centre may be set up in DCCBs. The resource centre may appoint experts in
the field of technology, planning and development, computerization etc. As
and when PACS require expert opinion they may get it from the PDC resource
centre. NABARD may extend the scheme of PACS Development Cell (PDC)
to all DCCBs in the 3-tier structure and SCBs in the 2-tier structure.
8.4. Changes in Nomenclature:

The Committee recommends that Primary Agriculture Credit Societies (PACS)
should be rechristened as Primary Multi Service Cooperative Societies
(PMSCS) not only to indicate the services offered by societies but also to
change the perception and mindset of people about cooperatives.
8.5. The NABARD prepares Potential Linked Plans (PLPs) for every district which
is a very good resource and referral document for preparing BDPs at PACS
level whose aggregation should form the basis for the BDPs of DCCBs.
Therefore, any future support to PACS either in terms of grant for meeting the
gap in staff expenditure or for providing credit support has to be based on the
BDPs. The DLECs should ensure such requirements/compliances as
precondition for any approval under HR matters as recommended in this
report.
8.6. Capacity Building:

Training and capacity building is not a one shot effort, but a continuous
process. Constant effort at imparting training to the staff and the
managements for capacity building and skill up-gradation is also an important
governance aspect for the PACS. Since, PACS may not be in a position to
bear the costs of such capacity building exercise; the higher financing
87 | P a g e
agencies should provide need based support for meeting these requirements
in the interest of transparency in the operations, reporting as well as in
protecting the finances of all the stakeholders. Thus, training and capacity
building should be treated as investment for future and for betterment of the
structure and for providing quality services to the stakeholders.
8.7. Monitoring by other fora:

NABARD, SCBs and State Governments should also monitor through HLC or
other fora and initiate timely corrective actions in case of any shortfall in the
implementation of the HR Policy for PACS.
8.8. Ammendments to Acts and Rules:

Necessary amendments based on the recommendations made in the report
may be carried out to the relevant orders/bye-laws etc. and guidelines on
PACS audit in force. The formats for the procedures recommended have to
be prepared together with guidelines thereon. The SLEC may ensure
carrying out the necessary amendments at the earliest.
SLEC may take initiative to frame proper uniform service rules for all cadres of
PACS staff by duly amending the existing special bye-laws in the context of
the recommendations made by the committee, NABARD guidelines.
8.9. Deposit Guarantee Scheme for PACS – Kerala and TN:

Kerala and Tamilnadu have “Deposit Guarantee Schemes” for the deposits
mobilized by PACS. Such a proactive measure has certainly helped the
PACS in enhancing their credibility in the eyes of depositors and therefore,
has helped in improved deposit mobilization by PACS in these states. Other
states may also consider formulating and implementing such schemes helping
PACS to reduce their dependance on borrowings. Highlights of Deposit
Guarantee Scheme of Tanilnadu are placed at Annexure-9.
8.10. Reliable and authentic data base is the prime requirement for any policy
intervention. NAFSCOB in consultation with NABARD may revamp the
88 | P a g e
present system of compiling the statistics on STCCS, so that, the

contemporary requirements like NPAs, CRAR etc., are captured and the CAS
and MIS are integrated into its data base.
8.11. National Consensus:

Barring a few states like Andhra Pradesh, Kerala, Odisha, Telangana other
states do not have a proper HR Policy for PACS. Hence, a proper HR Policy
as suggested now provide guidance to other states and will be definitely
appreciated by all the stakeholders in such states. Change management is a
part of the implementation of the proposed HR Policy for PACS. It has to be
seen from the experience of states which have implemented such policies
successfully. A strong commitment from the State Governments, SCBs and
DCCBs along with conduct of orientation programmes for the other
stakeholders is a pre-requisiste. Thus, a change for development and for
achieving long term goals of developing PACS into vibrant economic hubs at
the village level, has to be ushered in with the total involvement and
commitment of all the stakeholders.
It is recommended that a meeting of the Cooperative Ministers and Registrars

of Cooperative Societies of all the states may be convened and the report be
presented to them so as to arrive at a consenses on the importance and the
need for developing PACS. It will also facilitate effective implementation of
the recommendations of the Committee.
With such an extensive network spread across the length and breadth of the
country, with such unmatched outreach covering almost entire farm
households, PACS have the potential and capability to play a critical role in
ushering New India in the rural space and contribute to the doubling of
farmers‟ income in a most significant way. The precondition, however, is to
strengthen the primary cooperatives with proper and adequate HR; infuse
technology covering all aspects of their functioning; improve governance and;
extend necessary handholding support. Trust this Report will be a significant
step in that direction.
89 | P a g e
8.12. States specific studies of PACS:

The study of functioning of PACS in the selected states shows a divergent
picture. While PACS in Kerala are vibrant and to a large extent are viable,
with a well-defined HR Policy, Odisha has made a beginning in
computerization and introduced HR Policy, they are yet to be stabilized.
While PACS in Jharkhand are in the re-organaisation mode, in Maharashtra,
PACS are yet to orient themselves to the changing scenario. There is a need
to takeup an analytical study regarding the status of PACS in these states and
initiate appropriate measures for their viability and sustainability in addition to
the recommendation made for the study of PACS in the 2-tier structure.
“To think too long about doing a thing often becomes its undoing”
- Eva Young
90 | P a g e
Konduru Ravinder Rao
P. Mohanaiah Ranjana Chopra R. Palaniswamy
Rabi Kant Singh Dr. S. K. Batish O.E.J. Nongbri
R.L. Byas D Ramesh Sinha
Permanent Invitee
Bhima Subrahmanyam
91 | P a g e

HR Policy For PACS-Draft Report

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NAFSCOB: HR Policy for PACS

THE COMMITTEE TO FORMULATE

HUMAN RESOURCE POLICY FOR PACS

NATIONAL FEDERATION OF STATE COOPERATIVE BANKS

Sl. Particulars Page Nos.

3 Status of Primary Agricultural Credit Societies (PACS) in 12-44

the States visited by the Committee

4 Human Resource (HR) Policy: Recommendations 45-67

5 Mechanism for Implementation 68-70

6 HR Policy as applicable to states with 2-tier Structure 71-76

7 Computerization of PACS 77-82

Pursuant to the suggestion made by National Federation of State Cooperative Banks

“The Cooperative movement is such a model which can provide a

1.4. The “Revival Package” formulated and implemented on the basis of

1.5. Further, pursuant to the suggestion made by NAFSCOB, NABARD

2016 under the Chairmanship of Shri R. Amalorpavanathan, Deputy

1.6. The scope of the Mitra Committee and Amalorpavanathan Committee,

1.9. It is in this context, the National Federation of State Cooperative Banks

1. Shri Konduru Ravinder Rao : Chairman

9. Shri D Ramesh Sinha : Member

1.10. Terms of Reference of the Committee:

1.11. The Committee, accordingly, held consultation meetings with all-important

2.2. State Level Consultative Meets:

Table No. 2.1. The schedule of Consultation Meets

2.4. Visits to Primary Societies:

2.5. Feedback from major stakeholders:

Information and suggestions received from different stakeholders have been

2.6. Secondary Data:

The non-availability of reliable data on PACS in the country is a matter of

reliable source of information. The need for developing a comprehensive,

3. Status of Primary Agricultural Credit Societies (PACS) in the

“You will learn more about a road by travelling it rather than by

3.1. As discussed earlier in Chapter-2, on methodology the Committee held

1 No of PACS 93,367 2,701 2.89

Table No. 3.3. Staff strength at Headquarters:

Table No. 3.4. Staff strength at branches:

3.2.6. Appointing Authority:

 If the Management vested with the RCS(O) the Appointment Committee

3.2.7. Method of Selection for Direct Recruitment – Staff:

3.2.8. Grade-I Chief Executive:

3.2.9. Grade-II Post:

3.2.10. Grade-III Post:

3.2.11. Pay & Allowances:

3.2.13. The present scale of Pay for PACS employees:

3.2.14. Medical Allowance: @ 5% of basic pay not exceeding ₹150/- PM subject to

3.2.15. Service Records:

3.2.18. Supervision: PACS are inspected by DCCB periodically.

3.3.1. Uttar Pradesh:

Sl. No. Particulars Pan India Uttar Pradesh As Percentage of

3.3.2. Share of STCCS in Agriculture Loans of the state:

3.3.4. Salient features of HR Policy were as under:

Table No. 3.10.

3.3.5. Educational Qualifications:

3.3.8. At the consultative meeting, several stakeholders including the

3.3.9. Training arrangements:

3.4.1. North Eastern Region (NER):

 The NER accounted for 3.75% of PACS in the country. However,

3.4.3. HR policy in Meghalaya: