PACS full form in banking is Primary Agricultural Credit Society. PACS are cooperative credit institutions that provide financial services to farmers and rural populations in India. These societies play a critical role in the agricultural economy by offering credit and other essential services to farmers, particularly in remote and rural areas.

How PACS Work?

PACS are typically formed at the village or block level and act as the first point of contact for farmers seeking financial assistance. They are part of the larger cooperative banking structure in India, which also includes District Central Cooperative Banks (DCCBs) and State Cooperative Banks (SCBs). PACS are registered under the Cooperative Societies Act and are governed by the regulations of the respective state governments.

These societies primarily provide short-term and medium-term loans to farmers for the purchase of seeds, fertilizers, and equipment. They also offer long-term loans for capital-intensive agricultural activities. The aim is to provide easy access to credit at reasonable interest rates, which can help increase agricultural productivity and ensure farmers’ financial stability.

Benefits of PACS

• Access to Credit: PACS make it easier for farmers to access loans, especially in regions where commercial banks may not have a strong presence.
• Lower Interest Rates: The interest rates on loans provided by PACS are generally lower compared to other financial institutions, making them more affordable for farmers.
• Financial Inclusion: PACS play an important role in promoting financial inclusion by serving marginalized populations in rural areas.
• Support to Rural Development: PACS contribute significantly to the development of rural areas by providing essential financial services, thereby supporting local agriculture and improving livelihoods.