1. Financing and Fund Raising by Co-operative Society.

2. Co-operative society can raise its funds through  Share Capital from members  Deposits from members  Borrowing from DCCBs / SCBs.  Share Capital from Government.  Loan from Any other person, institution/ organization  Debentures from members and any other persons.

3.  Society shall receive deposits & loans only to such extent and subject to such conditions as may be specified in byelaws.  General body of society shall have power to permit the society to borrow from credit agency subject to such conditions as may be stipulated in the resolution of general body.  Such resolution is valid till the date of next AGM.

4.  This section is deleted by Act of 1998 with effect from 15.8.98. Previously a member can hold shares upto 1/5 th of total share capital of society subject to maximum of Rs. 10,000/-  Restriction on Share holding by member of UCB – upto 1/5 th of paid up share capital of that bank as per RBI guidelines.  DCC Bank while disbursing loan to PACS and other societies, can deduct share amount from the loan sanctioned.

5. State Co-operative Bank District Central Co-operative Bank Primary Agricultural Credit Society Farmers

6. NABARD State Co-operative Bank

7. S.C.B. / D.C.C.B. Sugar FactoriesSpinning Mills Pledge against Hypo C/C againstPreseasonal C/C Stock of sugar stock of storesfor meeting preseasonal expenses like harvesting, Pledge APledge Bcleaning and maintenance For sugarcanefor processingof factory Paymentexpenses Term loan – 1) for correction of new factory 2) for ethanol project 3) Distillery 4) expansion

8. Spinning Mills Pledge against Term loan stock of spin 1) For errecting new spinning mill 2) for expansion For payment of cotton.

9. Conditions for financing new project and Clean C/C to Sugar factory :- a) It must have positive net worth b) If net worth is negative, Government guarantee is required.

10.  LDB provides Long Term finance to farmers.  Long Term finance to farmers is for land development, Digging of well, Bore well etc.  Nabard Refinance to LDB against Government guarantee  LDB cannot receive deposits from public as provisions of Banking Regulation Act are not applicable to them.

11. Government funds and subsidies provisions for Co-operatives

12.  Section 41 :- Direct partnership of State Government in societies :- State Government may subscribe directly to the Share capital of society with limited liability.  In case of CCSE, State Government shall not hold more than 25% of Share Capital.

13.  Section 42 :- Indirect Partnership of State Government in Societies :- State Government provide money to the Apex Society for purchase of Shares in other societies.

14.  Section 43 :- Principal State Partnership Fund :-  An apex society which is provided money as aforesaid shall establish fund called “Principal State Partnership Fund”  Apex society shall utilize this fund for directly purchasing shares in other societies or  For providing money to society to purchase shares in other societies.

15.  Section 44 :- Subsidiary State Partnership Fund.  Central society which is provided with money by Apex Society from principal State Partnership Fund shall establish fund to be called “Subsidiary State Partnership Fund”  A central society shall utilize this fund for purchase of shares in primary society.

16.  Section 45 :- Approval of State Government for purchase of shares from principal State Partnership fund or subsidiary state  Section 49 :- All money received by apex society in respect of shares of other co operatives society purchased from money in principal State Partnership fund on redemption of such shares or by way of dividend, shall be credited to that fund.

17.  Section 51 :- Principal State Partnership fund and subsidiary state partnership fund shall not form part of assets of apex society or central society.  Section 52 :- State Government may inter into agreement with apex society setting out terms and conditions on which it shall provide money to apex society.  Apex society may with previous approval of state government inter into agreement with central society setting out the terms and conditions on which it shall provide money to that society from Principal state partnership fund.

18.  Section 53 :- Other forms of State Aid to Co- operatives Societies  State Government may i) Give loans to co-operatives societies. ii) Guarantee repayment of Principal and payment of interest of debentures issued by co-operatives societies. iii) Give financial assistant in any other form including subsidies to co-operatives societies.

19.  In every District Central Co-operative Bank, Government has Share Capital.  Through District Central Co-operative Bank, Government hold share capital in Primary Agricultural Credit societies known as “Subsidiary State Partnership Fund in PACS”  District Central Co-operative Bank receives from State Government share capital for PACS and pass on to PACS.  “State Partnership Fund” appears on both side of Balance Sheet of DCC Banks.  If PACS declares dividend, it pays to DCC Bank and DCC Bank in turn pays to State Government.  PACS has to credit Share Capital Redemption Fund

20.  This fund is required to be invested separately.  When Government Share Capital is due for payment (generally it is for 15 years), it is required to be paid.  PACS also receive aid from NCDC for building go-down.  This aid in the form of loan is received through State Government.  Government also issue unconditional, irrevocable default guarantee to SCBs and DCCBs for making finance to erect new factory and also to provide finance to SSKs having negative net worth.

21.  State Government through department of Social Welfare provides grants to magasvargiya industrial societies and yantramag societies for setting up of industry.  In case of draught, if crops are not raised / destroyed, Government reschedules loans granted to farmers by PACS.  In 2008, State Government has declared Debt waiver and debt relief scheme for farmers.  In case of LDB, Government holds share capital.  Government has also issued guarantee for refinance provided by Nabard to LDB.  As LDB could not repay to Nabard in time, Government has paid to Nabard when guarantee was invoked by Nabard.

22.  When farmers were in difficulty to repay their loan to LDB, OTS scheme was implemented for farmers. Loss caused to LDB in OTS was repaid by Government.  Central Government also grant rebate in interest to farmers through DCCBs. Rebate is from 1.25% to 1.75% depending upon level of NPA.  State Government also grants additional 1% rebate to farmers.  Loans upto Rs.1 lakh are granted to farmers interest free.  State Government has provided Rs.200 crores interest free loans to credit societies which are unable to pay its depositors.

23. Subsidy Scheme  Continuation of S.T. agri loans of to Rs. 3,00,000/- at 0% rate of interest.  M.T. and L.T. agri loans of to Rs. 10,00,000/- at 3% rate of interest.  Construction of godown by PACS under PPP model Rs. 5 crores budget provision for 2015-16.  Rs. 10,000/- crores loans to cover 23 lakh farmers.  Rs. 32 crores towards share capital for registration of one member from each BPL family as a member of PACS in next 3 years. i) Give loans to co-operatives societies. ii) Guarantee repayment of Principal and payment of interest of debentures issued by co-operatives societies. iii) Give financial assistant in any other form including subsidies to co-operatives societies.

24.  Waiver of loan raised for borewell if borewell is failed in respect of loan disbursed by PCARD bank in Karnataka.  Separate DCC Bank for Haveri and Chamrajnagar District.  Construction of warehouses at 72 places for storage of agri production of Karnataka framers.  Market modernization scheme in 25 major APMC market at outlay of Rs. 50 crores with 25% grant from Karnataka Government.  Cold storage units in Hubali, Tumkur and Dasanapura of Bengluru and need based Silos in selected APMC.

25.  Scientific analysis laborites in Mysore, Tumkuru, Hubali and Raichur APMC.  For Yashwini scheme – Karnataka Government will spend Rs. 110 Crores.  Provision of sexed semen tubes at 50% subsidy.  Short term loans upto Rs. 50,000/- at 0% interest through Co.operative banks for cattlefeed and other maintenance expenses.  Insurance premium subsidy upto 5 cattle to members of milk production co-operative society..

26.  Blackened subsidy to small and marginal farmers to established cattle, sheep, goat, pig and poultry units by availing loan upto Rs. 1.5 lakh from Commercial bank subsidy to be 33% for SC and ST and 25% subsidy for others.  90% subsidy to be given for procurement centres, cold storage, farm mechanized implements and processing units in respect of horticulture.

27. Agree loans to Farmers at 0% and 1% WEFCrop loan up to Rs. 1 lakh Crop loan above Rs. 1 lakh but upto Rs. 2 lakh Crop loan above Rs. 1 lakh and 2 lakh but upto Rs. 3 lakh 1 April 20120%-1% 1 April 20130%1% 1 April 20140% 1 April 20150%

28.  23.50 lakh farmers in the State will gate loan of Rs. 10,500 Crores (ST agree loan) at 0% interest for the year 15-16.  MT and LT loan upto Rs. 3 lakh at 3% interest. Loans disbursed in the year 1-4-14 to 31-3-15 (figers in crores) ParticularsNo of Farmers and amount Out of which new members and amount ST loan2063148109206 Rs. 9,286/-Rs. 1,174/- MT loan1576914631 Rs. 293/-Rs. 275/- LT laon2628715493 Rs. 318/-Rs. 165/-

29. Funds involved by various Institutions ST agri loans disbursed through PACS Sr. No. Name of InstitutionFunds involved (Rs. In crores) 1.Nabard4,480.00 2.Apex Bank1,276.00 3.DCC Bank3,032.00 4.PACS own fund179.00 5.Commercial Bank319.00 (Target 10,000 crores) Total9,286.00

30. Target and Achievement of MT & LT Loan ParticularsTargetAchievement 2013-142014-152013-142014-15 MT loan375400309293 LT loan183300212318