Primary Agricultural Credit Societies


  • The Cabinet Committee on Economic Affairs chaired by Prime Minister has approved Computerization of Primary Agricultural Credit Societies (PACS) with the objective of increasing efficiency of PACS, bringing transparency and accountability in their operations; facilitating PACS to diversify their business and undertake multiple activities/ services.

About Primary Agricultural Credit Societies

  • The Primary Agricultural Cooperative credit societies (PACS) constitute the lowest tier of the three-tier Short-term cooperative credit (STCC) in the country, which is crucial for the development of the rural economy.
  • The other two tiers viz. State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs) have already been automated by the NABARD and brought on Common Banking Software (CBS).

    Primary Agricultural Credit Societies
    Photo Credit: Financial Express
  • Primary Agricultural Credit Society (PACS) is a basic unit and smallest co-operative credit institutions in India.
  • It works on the grassroots level (gram panchayat and village level).
  • Primary Agricultural Credit Society is the final link between the ultimate borrowers, i.e., rural people, on the one hand, and the higher agencies, i.e., Central cooperative bank, state cooperative bank, and Reserve Bank of India, on the other.
  • As registered cooperative societies, Primary Agricultural Credit Societies (PACS) have been providing credit and other services to their members.
  • PACS typically offer the following services to their members:
    • Input facilities in the form of a monetary or in-kind component
    • Agriculture implements for hire
    • Storage space
  • A primary agricultural credit society can be formed by a group of ten or more people from a village. The society’s management is overseen by an elected body.
  • The membership fee is low enough that even the poorest agriculturist can join.
  • Members of the society have unlimited liability, which means that each member assumes full responsibility for the society’s entire loss in the event of its failure.
  • The primary credit societies’ working capital is derived from their own funds, deposits, borrowings, and other sources.
  • Share capital, membership fees, and reserve funds are all part of the company’s own funds.
  • Deposits are made by both members and non-members.
  • Borrowings are primarily made from central cooperative banks.


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