(GIST OF YOJANA) Empowering Agriculture Cooperatives through Digitisation

(GIST OF YOJANA) Empowering Agriculture Cooperatives through Digitisation


Empowering Agriculture Cooperatives through Digitisation


Cooperative credit institutions have long been instrumental in promoting social and economic development in India. These institutions play a crucial role in mobilizing credit for agricultural production, particularly in rural areas.

About Cooperative Credit Institutions 

  • The short-term rural cooperative credit structure (STCCS) is a 3 tier structure which comprises State Cooperative Banks (StBs), District Central Cooperative Banks (DCCBs) and Primary Agriculture Credit Societies (PACs) at the village level. 
  • They are regulated by the Reserve Bank of India (RBI) and supervised by the National Bank for Agriculture and Rural Development (NABARD).
  • They provide essential credit mobilization in agriculture production but also serve as catalysts for self-help, grassroots community participation, and social control over resource allocation and mobilization.

Challenges Confronting Cooperative Credit Institutions

  • Face stiff competition from commercial banks and microfinance institutions inthe rural credit sphere.
  • Inability to adopt cutting-edge technologies.
  • Reliance on conventional services (short-term loans) rather than tapping into services such as financial advisory and marketing. 
  • Lack of innovation.

Way Forward:

  • Centralized Online Real-time Exchange (CORE) based Banking Solutions (CBS) have automated State Cooperative Banks (StBs) and District Central Cooperative Banks (DCCBs), improving regulatory mechanisms and enabling anytime, anywhere banking. 
  • Efficiency and governance across cooperative banks can be improved by adopting standardized technology-driven office management systems. 
  • While DCCBs require the digitization of business processes, PACS need to be computerized as a fundamental step towards efficiency. 
  • The computerization of PACS aims to enhance service delivery, digitize operations, and integrate them with DCCBs and StBs. 
  • However, challenges such as inadequate rural infrastructure, power supply, internet connectivity, and computer skills must be addressed.
  • Need to adopt technologies such as mobile banking, internet banking, drones for field monitoring, and blockchain for cybersecurity and transparency. 
  • Need for collaborative partnerships with fintech firms to facilitate customer acquisition, credit profiling, advisory services, financial products, and development of user-friendly digital interfaces


Digitization has enormous potential to strengthen cooperative credit institutions and boost rural development. Digitization enables seamless integration, better service delivery and financial inclusion. With the right policy support and a targeted approach, cooperative lending institutions can use digitalization to effectively address the changing needs of Indian agriculture, thereby contributing to the prosperity of rural communities.



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Courtesy: Yojana