NABARD has increased refinance to the Punjab State Cooperative Bank from Rs,800 cr to Rs4,200 cr. In the wake of the rising input costs for crops to be sown in the just started kharif marketing season, state farmers will have access to higher institutional finance from the Punjab State Cooperative Bank.

The bank will be lending an additional Rs 400 crore to farmers as term loans, extending the facility of cooperative liquidity. Loans will be extended through the primary agriculture credit societies (PACS). This has been possible after the National Bank for Agriculture and Rural Development (NABARD) increased refinance to the state cooperative bank from Rs 3,800 crore in 2019 to Rs 4,200 crore this year. The higher recovery rate of the previously advanced loans (recovery is higher by 7 per cent) has also helped in getting additional finance for the state cooperative bank.

This year, the cost of labour for paddy transplantation has increased by 60-70 per cent and the cost of insecticides and pesticides has increased by 15 per cent. Against this high input cost, the increase in price realisation (minimum support price) is just 2.9 per cent. As a result, financially stretched farmers will be looking at the credit from institutional and non-institutional sources.

The Punjab State Cooperative Bank was established on 31st August, 1949 at Shimla has a principle financing institution of the cooperative movement in Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to its present building at Chandigarh. In the cooperative Banking structure, the position of the Punjab State Cooperative Bank is extremely important as the whole credit system revolves around it.

National Bank for Agriculture and Rural Development is an Apex Development Financial Institution in India. The Bank has been entrusted with "matters concerning Policy Planning and Operations in the field of credit for Agriculture and other Economic activities in Rural areas in India"