Dirghavadhi Krishak Punji Sahakar Yojana to strengthen long-term credit

The National Cooperative Development Corporation (NCDC), functioning under the Ministry of Cooperation, has introduced the ‘Dirghavadhi Krishak Punji Sahakar Yojana’ to strengthen long-term credit availability for cooperatives engaged in agriculture and allied sectors. The scheme aims to support capital formation, improve rural infrastructure, and ensure a steady flow of institutional finance to cooperative societies.

Objective of the scheme

The primary goal of the scheme is to provide long-term financial assistance to cooperative societies for investment in agriculture and allied activities. It focuses on enhancing productive capacity, supporting infrastructure creation, and enabling diversification into income-generating rural enterprises. The scheme also seeks to strengthen the cooperative credit system by ensuring timely and adequate availability of funds.

Eligibility criteria for cooperatives

To qualify for assistance under the scheme, cooperatives must meet specific financial and operational benchmarks. They should have been operational for a minimum of three years. A positive net worth is mandatory, with no erosion in paid-up share capital. Additionally, the cooperative must not have incurred any cash losses during the past three years and should have reported net profits in at least two of those years. These criteria ensure financial discipline and sustainability.

Appraisal and monitoring mechanism

NCDC undertakes a detailed appraisal process before sanctioning loans. It evaluates the financial health, operational performance, and credibility of the cooperative. Loans are sanctioned against adequate security, following due diligence norms. The implementation of projects is closely monitored through NCDC’s regional and sub-offices. Regular field inspections and reviews ensure proper utilisation of funds and timely credit flow.

Important Facts for Exams

• NCDC is a statutory organisation established in 1963.
• It operates under the Ministry of Cooperation, set up in 2021.
• The scheme targets long-term credit needs of cooperative institutions.
• Legal recovery mechanisms include SARFAESI Act, 2002 and DRT proceedings.

Recovery process in case of default

In case of default, NCDC follows a structured recovery framework. Initially, a recall notice is issued to the borrower demanding repayment within a specified period. If post-dated cheques provided as security are dishonoured, action is initiated under Section 138 of the Negotiable Instruments Act, 1881. When the loan account becomes a non-performing asset, proceedings under the SARFAESI Act, 2002 are initiated, including issuance of a demand notice under Section 13(2). If dues remain unpaid, further action under Section 13(4) is taken. Additionally, cases may be filed before the Debt Recovery Tribunal under the Recovery of Debts and Bankruptcy Act, 1993 for recovery of outstanding dues.