Primary Cooperative Agriculture and Rural Development Bank: Loan for Handloom and Other Non-Farm Sector Activities (Tamil Nadu)

What is the PCARD Bank non-farm sector loan?

This is a term loan given by a Primary Cooperative Agriculture and Rural Development Bank (PCARDB) for handloom weaving and other non-farm sector activities, under the Co-operation, Food and Consumer Protection Department of the Government of Tamil Nadu and supervised by the Registrar of Cooperative Societies. Scheme descriptions record a maximum loan of Rs 2,00,000 at an interest rate of 11 to 12.5 per cent.

To use this loan well, it helps to understand where the lender sits. Tamil Nadu's cooperative credit system has three arms. The short-term structure runs from the Tamil Nadu State Apex Cooperative Bank through 23 District Central Cooperative Banks to about 4,474 Primary Agricultural Cooperative Banks, and handles crop loans and small working capital. The urban structure is about 120 Urban Cooperative Banks. The long-term structure. The one that matters here, consists of the Tamil Nadu Cooperative State Agriculture and Rural Development Bank (TNCSARDB) at state level and 180 Primary Cooperative Agriculture and Rural Development Banks at taluk and block level.

The department describes the long-term arm's role plainly: these institutions provide "investment credit to the members for activities like minor irrigation, horticulture, plantation crops and other agriculture and allied sectors," and "the period of repayment of such loans ranges from 5 to 15 years." Non-farm sector lending, including handloom, sits within that mandate and became the arm's main activity when the state bank found itself "extending small quantum of loans for Non-Farm Sector using its own resources."

That history matters for anyone planning around this loan. The department has recorded periods in which PCARD Bank lending was "practically nil" because NABARD refinance was unavailable, followed by a revival in which the banks "have again started lending for the Non-Farm Sector including Jewel Loans." The practical conclusion is not that the scheme is closed, but that availability at any one bank in any one year depends on that bank's resource position. Ask before you plan.

Who is eligible for the handloom and non-farm sector loan?

You can apply if:

• You are a member of the Primary Cooperative Agriculture and Rural Development Bank covering your taluk or block, or are willing to take membership. Cooperative banks lend to members.
• You are resident in the area that bank serves.
• You are taking up a handloom weaving activity or another non-farm sector livelihood. An artisan trade, small manufacturing, processing or a service activity carried on by a rural household.
• You can offer immovable property as security, since the long-term cooperative structure lends against mortgage.
• You can produce a costed proposal for the activity, with quotations for the looms, machinery or equipment to be bought.
• You have no existing overdue to a cooperative institution.

You cannot apply, or are not eligible, if:

• You have no property to mortgage. This is the hard constraint that distinguishes the long-term structure from the small unsecured micro credit line at District Central Cooperative Banks, and there is no way around it in this scheme. A landless applicant should look instead at Self Help Group lending or the micro credit line.
• You are an existing defaulter to a cooperative bank.
• Your property title is unclear or carries encumbrances that the encumbrance certificate reveals.
• You are seeking a subsidy or a grant. This is credit, repayable with interest over 5 to 15 years.
• You need working capital that turns over weekly. Long-term investment credit is the wrong instrument; use the short-term cooperative structure instead.
• Your local PCARD Bank has suspended non-farm lending for want of resources in that year. This is a timing bar rather than a permanent one.
• You are outside Tamil Nadu.

What the loan looks like

For a handloom household, Rs 2,00,000 spread over a long repayment period is enough to buy or upgrade looms, add a warping or sizing facility, build a shed or finance a first significant yarn purchase. The long tenure is the real advantage: a commercial term loan for the same purpose would usually be structured over three to five years, which is hard to service from weaving income.

What documents are required?

How to apply for the handloom and non-farm sector loan

1. Locate the Primary Cooperative Agriculture and Rural Development Bank covering your taluk or block. The Deputy Registrar of Cooperative Societies in your district will tell you which of the 180 banks serves your area.
2. Ask the branch whether non-farm sector lending is currently open and what the present ceiling and interest rate are. Do this before assembling papers, because availability varies with the bank's resource position.
3. Take membership of the bank if you are not already a member, by buying the prescribed share and completing the membership formalities.
4. Prepare the activity proposal: what you will weave or produce, the looms or equipment you need with quotations, the working capital required, the expected monthly output and income, and the repayment you can sustain.
5. Assemble the security papers — the property document, the patta and chitta and adangal where the security is land, and a fresh encumbrance certificate from the Sub-Registrar's office.
6. Fill in and submit the loan application at the bank with all documents, and obtain an acknowledgement.
7. Cooperate with the bank's inspection, in which an officer visits the premises, verifies the property and assesses the activity.
8. Complete the mortgage formalities after sanction, and collect the sanction letter setting out the amount, rate, repayment schedule and charges before disbursement.

How to check the status of your application

1. Ask the Secretary or Special Officer of the PCARD Bank for the position of your application and the date it is expected to go to the board.
2. Ask whether the bank is waiting on resources or refinance, which is a common and honest answer at this arm of the cooperative structure.
3. Escalate to the Deputy or Joint Registrar of Cooperative Societies in the district, whose office supervises these banks.
4. Escalate further to the Tamil Nadu Cooperative State Agriculture and Rural Development Bank, the apex institution of the long-term structure.
5. Use the Chief Minister's Special Cell at cmhelpline.tn.gov.in for unresolved delays.

Common reasons an application fails, and how to fix them

• No mortgageable property. Not curable within this scheme. Redirect to Self Help Group lending, the District Central Cooperative Bank micro credit line, or the handloom department's own weaver schemes.
• Encumbrance certificate shows a subsisting charge. Clear the earlier mortgage or offer different security.
• Title in a joint or ancestral name. All co-owners must join the mortgage. Settle this before applying rather than during processing.
• Proposal not costed. A one-line request for Rs 2,00,000 will not be appraised. Produce quotations and a realistic income projection.
• Existing cooperative overdue. Settle it first.
• Bank has no lendable resources that year. Ask to be placed on the list for the next allocation, and meanwhile check whether a District Central Cooperative Bank or the handloom department has a suitable line.
• Applicant not a member. Take membership at the outset; it is a small share purchase, not an obstacle.

Related lines worth asking about

• Handloom weavers cooperative society membership, which opens the Handlooms and Textiles Department's own weaver welfare, yarn supply and rebate schemes.
• Jewel loans through PCARD Banks and Primary Agricultural Cooperative Banks, where the household has gold and needs money quickly without a mortgage.
• Women Entrepreneur Loan at District Central Cooperative Banks, up to Rs 10 lakh repayable in 60 monthly instalments at 12 per cent, for women starting small industries or service activities.
• Self Help Group lending, through which cooperative institutions lend substantially and which needs no property security.

Help and grievance redressal

• Primary Cooperative Agriculture and Rural Development Bank in your taluk or block, application, appraisal and sanction.
• Deputy or Joint Registrar of Cooperative Societies, district; supervision and escalation.
• Registrar of Cooperative Societies: rcs.tn.gov.in
• Chief Minister's Special Cell: cmhelpline.tn.gov.in

Cooperative banks charge only their notified processing, inspection and documentation charges, which appear on the sanction letter. No commission is payable to any individual for arranging a loan, and any such demand should be reported to the Deputy Registrar of Cooperative Societies.

A note on the reliability of these figures

The institutional facts here to 180 PCARD Banks at taluk and block level, the 5 to 15 year repayment range, the non-farm sector mandate and the history of suspended and resumed lending, come from the Cooperation Department's own documentation. The Rs 2,00,000 ceiling and the 11 to 12.5 per cent interest band come from scheme summaries rather than from a current departmental circular. Cooperative lending terms are revised and differ between banks, so treat both as indicative and ask your own PCARD Bank for the current sanction terms in writing before you commit.