G.O Ms No. 81 Dated 12.3.2004 of Cooperation, Food and Consumer Protection Dept, Tamil Nadu

Cooperation – Primary Agricultural Cooperative Banks in Tamilnadu Strengthening of Share Capital Structure – Investment of Rs.56.60 lakhs during 2003-2004 – Sanctioned.

From the General Manager, National Bank for Agriculture and Rural Development, Mumbai Lr.No.NB. PCD (Zones) / H733 / PR-7A (TN) ) / 2003-04, dated 17.2.2004.

The National Bank for Agriculture and Rural Development, (NABARD), Mumbai has sanctioned to the State Government a loan of 56.60 lakhs (Rupees Fifty-six lakhs and sixty thousand only) from its National Rural Credit (Long term Operations) fund to be invested in the share capital of 115 Primary Agricultural Cooperative Banks in certain districts in this state as indicated in Annexure-II.

2. The duration of the loans sanctioned by the National Bank for Agriculture and Rural Development referred to in paragraph-1 above will be twelve years from the date of drawal. The Principal is repayable in equal annual instalments, the first being payable on the expiry of the third year. Interest is at the rate of 8% per annum. The loan will be drawn under the sanctioned limits, as and when required during the course of the year, against promissory notes to be executed in favour of the National Bank for Agriculture and Rural Development from time to time. The entire amount of loan sanctioned for any year must however be drawn before the end of the concerned financial year, i.e. 31^st March on which date any undrawn portion will lapse. Each drawal will be treated as a separate loan for the calculation of interest etc.

3. Government accept the loan of Rs.56.60 lakhs (Rupees Fifty six lakhs and sixty thousand Only) sanctioned by the National Bank for Agriculture and Rural Development, Mumbai, subject to the conditions stipulated by it. On realisation, the amount will be credited to the head, “6003 Internal Debt of the State Government – 105 Loans from the National Bank for Agriculture and Rural Development – AA. Loans from the National Credit (Long Term Operations) Fund of National Bank for Agriculture and Rural Development (DP Code No.6003 00 105 AA 000H).

4. In exercise of the powers conferred by section 52 of the Tamil Nadu Co-operative Societies Act,1983 (Tamil Nadu Act 30 of 1983), the Governor of Tamil Nadu hereby sanctions an amount of Rs.56.60 lakhs (Rupees Fifty six lakhs and sixty thousand Only) for investment in the share capital of the 115 Primary Agricultural Cooperative Banks subject to the following conditions:

i) This shall be treated as an investment in the ordinary shares and will earn the same rate of dividend as declared by the Primary Agricultural Cooperative Banks concerned on their ordinary shares out of their annual net profits.

ii) The rate of dividend payable by the Primary Agricultural Cooperative Banks to Government shall be 3% and the entire dividend in excess of 3% shall be credited to the agricultural credit stabilisation fund of the institution concerned, which shall be utilised in accordance with the rules approved by the Government in G.O.(Ms)No.501, Cooperation, dated 8.11.1975.

iii) A scheme for repatriation of the Government ’s share capital on expiry of the loan period will be drawn up and implemented.

“ 4425 00 Capital outlay on cooperation – 107 Investment in credit – Cooperation – I Non-Plan – AA Assistance to Tamil Nadu State Cooperative Banks, Central cooperative Banks and Village Credit Societies for strengthening the share capital structure –22 Investments (DP code No.4425 00 107 AA 2207)

6. The Joint Registrar of Co-operative Societies (Intensive Agricultural area Programme) in the office of the Registrar of Co-operative Societies shall draw the amount in favour of the Tamil Nadu State Apex Cooperative Bank, Chennai for crediting the amount to the respective Primary Agricultural Cooperative Banks. The list of Primary Agricultural Cooperative Banks is indicated in the Annexure to this order. The investment should, however, be made only after the amount is actually credited to the State Account. The Registrar of Co-operative Societies is requested to ensure that the conditions laid down in the circular of National Bank for Agriculture and Rural Development in its Lr. No. PDD (PS)SSI/PR.7(Gen.)/82-83, dated 3.12.1982 are strictly adhered to before the investments are made. As regards retirement of share capital, the Primary Agricultural Cooperative Banks should agree to the conditions which are to be imposed.

7. The Pay and Accounts Officer (South)Chennai-35 is requested to admit the bill presented by the Joint Registrar of Co-operative Societies (Intensive Agricultural Area Programme), Office of the Registrar of Co-operative Societies,Chennai-10 in respect of the amount sanctioned in paragraph-4 above without adhering to the time schedule for the presentation of bills.

8. This order issues with the concurrence of the Finance Department vide its U.O.No.14555/CF&CP/2004, dated 10.3.2004.

The Joint Registrar of Co-operative Societies,(IAAP), Office of the Registrar of Co-operative Societies,Chennai-10.

The Managing Director, National Bank for Agriculture and Rural Development,C-24, ‘G’ Block, Bandra-Kurla Complex, P.B.N0.8121, Bandra (East), Mumbai-400 051.

The Deputy General Manager, National Bank for Agriculture and Rural Development, 105/106 Mahatma Gandhi road, Chennai-34.

Sanction of long term loans to State Government out of National Rural Credit (Long term Operations) Fund of contributing to the share capital of Primary Agricultural Cooperative Banks for the year 2003-2004.

Sl.No.	Name of the Districts	No.of. Primary Agricultural Cooperative Banks	Amount (Rs. in lakhs)
1.	Salem	76	38.00
2.	Trichy	28	13.60
3.	Kumbakonam	8	3.50
4.	Sivagangai	3	1.50
	Total	115	56.60

Sub: Cooperation – Primary Agricultural Cooperative Banks – Loan of Rs.56.60 (Rupees Fifty six lakhs and sixty thousand Only) from the National Rural Credit (L.T.O.)Fund of National Bank for Agriculture and Rural Development for 2002-2003 – Investment – Requested.

Ref: From the General Manager, National Bank for Agriculture and Rural Development, Mumbai Lr.No.NB. PCD (Zones) /H733/PR-7A(TN))/2003-04, dated 17.2.2004.

I am directed to refer to the letter cited and request that a sum of Rs.56.60 (Rupees Fifty six lakhs and sixty thousand Only) may be disbursed to this Government as loan for investment in the share capital of 115 Primary Agricultural Cooperative Banks. The agreement, promissory note and the certificate executed in this behalf by the Government of Tamil Nadu are sent herewith. Orders of the Government of India enabling the State Government to borrow the loan are awaited. This will be forwarded to the National Bank for Agriculture and Rural Development on receipt.

2. I am also to state that no limits have been fixed by the State Legislature for such borrowing. A certificate to this effect is also enclosed.

3. I am to request that the loan amount of Rs.56.60 (Rupees Fifty-six lakhs and sixty thousand Only) may be credited to the account of the State Government under the head “6003 Internal Debt of the State Government – 105 Loans from the National Bank for Agriculture and Rural Development – AA. Loans from the National Credit (Long Term Operations) Fund of National Bank for Agriculture and Rural Development (DP Code No.6003 00 105 AA 093) immediately under advice to this Department and to the Registrar of Co-operative Societies, Chennai as to the date of credit of the loan amount.

4. I am to request you to kindly acknowledge the receipt of this letter and its enclosures.

The Managing Director, National Bank for Agriculture and Rural Development,C-24, ‘G’ Block Bandra-Kurla Complex, P.B.No.8121, Bandra(east), Mumbai-400 051.

The Secretary to Government of India,
Ministry of Finance
(Department of Economic affairs)
Budget Division,
New Delhi

Sub: Cooperation – Primary Agricultural Cooperative Banks – Loan of Rs.56.60 (Rupees Fiftysix lakhs and sixty thousand Only) from the Natuional Rural Credit (L.T.O.) Fund of National Bank for Agriculture and Rural Development for 2003-2004 – Investment – Requested.

Ref: From the General Manager, National Bank for Agriculture and Rural Development, Mumbai Lr.No.NB. PCD (Zones) /H733/PR-7A(TN))/2003-04, dated 17.2.2004.

I am directed to state that the National Bank for Agriculture and Rural Development in its letter cited has sanctioned loan of Rs.56.60 (Rupees Fiftysix lakhs and sixty thousand Only) from its National Rural Credit (Long Term Operation)Fund to this State Government towards contribution to the share capital of 115 Primary Agricultural Cooperative Banks. The loan shall carry an interest of 8% per annum. The loan should be repaid in annual equal instalments. The first instalment is payable on the expiry of the third year from the date of drawal.

2. I am to request that the Government of India may be moved for their consent under Article 293(3) of the Constitution of India to this Government for obtaining the loan of Rs.56.60 (Rupees Fifty six lakhs and sixty thousand Only) from the National Rural Credit (Long Term Operation) Fund of National Bank for Agriculture and Rural Development for contribution to the share capital of 115 Primary Agricultural Cooperative Banks in this State during 2003-2004 and the consent of Government of India may kindly be conveyed to this State Government early and a copy may be faxed to National Bank for Agriculture and Rural Development so as to avoid the communication delay and early action.

Form of agreement to be obtained from a State Government for advances under section 27 of the National Bank for Agriculture and Rural Development Act,1981.

NOTE: THE LIABILITY to stamp duty will depend upon the provisions of the Stamp Law in force at the place where it is executed.

In consideration of the National Bank for Agriculture and Rural Development (hereinafter called “ The National Bank “, which expression shall, unless such interpretation is repugnant to the context, include its successors and assigns), agreeing to make from time to time loans and advances in its discretion under the provisions of Section 27 of the National Bank for Agriculture and Rural Development Act,1981 to the Government of Tamil Nadu (hereinafter called “ The State Government “, which expression shall, unless such interpretation is repugnant to the context, include the successors), which loans and advances shall be utilised by the State Government for the sole purpose of subscribing, directly or indirectly, to the share capital of a cooperative credit society, as defined in Section 5(cc)(ii) of the Banking Regulation Act, 1949, established in the State of Tamil Nadu, the Governor of Tamil Nadu hereby agrees as follows:

1) The loans and advances made under this Agreement by the National Bank to the State Government shall be utilised by the State Government for the sole purpose of subscribing directly or indirectly, to the share capital of a Cooperative Credit Society, as defined in Section 5(cc)(ii) of the Banking Regulation Act, 1949 established in the State of Tamil Nadu and approved by the national Bank in the relative letter of sanction issued by the National Bank. The amount of loan or advance in each case shall be utilised by the State Government strictly in accordance with the terms of such letter of sanction. In the event of the State Government for reasons beyond the control of the State Government, not being in a position to so utilise any such loan or advance or any part thereof in accordance with such terms, it shall refund forthwith to the National Bank the amount of the loan or advance or as the case may be, the part thereof, which could not be utilised by it and it shall be open to the National Bank in such event, to recall the entire loan or advance.

2) The loans and advances under the Agreement shall be made only on the State Government executing promissory notes in favour of the National Bank in a form prescribed or approved by the National Bank for the amount required as loan or advance.

3) Each loan or advance made under the Agreement together with the interest thereon, shall be repaid in full by the State Government in the manner shown in clauses 4 and 5 below and before expiry of twelve years from the date of making such loan or advance, provided, however, that it shall be open to the National Bank, without any obligation on it so to do, to fix in its discretion and in respect of any loan or advance, such longer period for repayment as it may think fit, so, however, that the total period shall not exceed twenty years from the date of making such loan or advance.

4) The Principal of each loan or advance shall be repaid by the State Government in equal annual instalments and within the period mentioned in clause 3 above, the first of such instalments to be paid at the expiry of a period of three years from the date of making of the loan or advance and subsequent instalments to be paid at intervals of a year.

5) In the case of loan or advance made by the National Bank under this Agreement before 31^st March 2004, the State Government shall pay to the National Bank on the amount for the time being outstanding in respect of that loan or advance interest at eight percent per annum from the date of drawal. Such interest shall be calculated with quarterly rests and shall accrue and become payable at the end of each calendar quarter. The interest for first calendar quarter may, however, be collected during the second Calendar quarter at the discretion of the National Bank.

6) If the State Government defaults in making payment or refunding under clause 4 or 5 or clause 8 of this Agreement, the National Bank may, but without any obligation on its part so to do, request the Reserve Bank of India to debit the current account of the State Government with it for the amount or amounts due and remit the same directly to the National Bank in such a manner as the National Bank may desire. Provided that before requesting the Reserve Bank of India to debit the amount on the ground of failure to refund under clause 8, the National Bank shall, after the expiry of the period of three months referred to in that clause, give the State Government notice in writing of the National Bank’s intention to request the Reserve Bank of India to debit the State Government’s account.

7) If the Cooperative Credit Society, to whose share capital the State Government has subscribed by utilising any loan or advance obtained by it from the National Bank under this Agreement refunds the whole or any portion of the share capital so subscribed by the State Government, the State Government shall forthwith pay to the National Bank the amount so refunded by the Cooperative Credit Society, notwithstanding that the relative loan or advance obtained by the State Government from the National Bank or any instalment or repayment in respect thereof has not fallen due for repayment.

8) If the State Government does not disburse the amount obtained as loans or advances under this Agreement or any part thereof, within three months from the date of making loan, the undisbursed amount shall be refunded to the National Bank immediately.

9) Where any amount is refunded by the State Government to the National Bank in terms of this Agreement or wherein respect of any loan or advance obtained under this Agreement, the State Government repays any amount other than any instalment of repayment, the amount so refunded or repaid shall be adjusted towards the repayment of the last instalment and in case the repayments are more than the amount falling due in one instalment, the balance will be adjusted against the last but one instalment and so forth, provided, however, that the dates of repayment and the amount of the annual instalments as determined in the letter of sanction issued by the National Bank shall remain unaltered and shall not be refixed.

10) If the State Government commits a breach of any of the terms of this Agreement in relation to any loan or advance obtained by it, the National Bank shall have right to forthwith, on such breach, recall such loan or advance or the outstanding portion thereof.

11) Every loan and advance under this Agreement shall be secured on the Consolidated Fund of the State of Tamil Nadu.

12) It shall be open to the National Bank, in its discretion to require the State Government to satisfy it that the State Government has complied with the provisions in the constitution of India governing its powers to take loans and advances.

13) The Agreement, and the Promissory Notes executed for loans and advances made under this Agreement, shall operate as continuing security for the loans and advances made in pursuance of this Agreement notwithstanding any partial repayments from time to time.

14) The stamp duty payable on this Agreement shall be borned by the State Government.

Secretary to Government of Tamil Nadu in the Cooperation, Food and Consumer Protection Department acting in the premises for and on behalf of the Governor of the State of Tamil Nadu.

(Form of Promissory Note to be obtained from a State Government at the time of making advances under Section 27 of the National Bank for Agriculture and Rural Development Act,1981)

The Governor of the State of Tamil Nadu promises to pay the National Bank for Agriculture and Rural Development or order the sum of Rs.56.60 lakhs (Rupees Fiftysix lakhs and sixty thousand Only) in equal annual instalments and within twelve years from the date, the first such instalments to be paid immediately on the expiry of a period of three years from date and subsequent instalments to be paid at intervals of twelve months therefrom together with interest on the amount for the time being outstanding at eight percent per annum from the date of drawal such interest to be calculated with quarterly rests to be payable at the end of each calendar quarter. The interest for the first Calendar quarter may, however, be collected during the second Calendar quarter at the discretion of the National Bank.

Dated at Chennai, this day of
Secretary to Government of Tamil Nadu in the Cooperation, Food and Consumer Protection Department acting in the premises for and on behalf of the governor of the State of Tamil Nadu.

(Form of Certificate to be furnished by the State Government to the effect that the advance drawn is within the limits fixed by the State Legislature)

With reference to the loan of Rs.56.60 lakhs ( Rupees Fifty six lakhs and sixty thousand Only) sanctioned by the National Bank for Agriculture and Rural Development from the National rural Credit (Long Term Operations) Fund vide their Lr.No. NB. PCD (Zones)/ H733/ PR-7A(TN))/2003-04, dated 17.2.2004. we here certify that no limits have been fixed by the Tamil Nadu State Legislature for the borrowings of the Tamil Nadu State.

Secretary to Government of Tamil Nadu in the Cooperation, Food and Consumer Protection Department acting in the premises for and on behalf of the Governor of the State of Tamil Nadu.

Loans to State Governments for contribution to the share capital of cooperative credit institutions under Section 27 of the NABARD Act, 1981 for the year 2003-04 - Terms and conditions.

This Annexure is to be read as part of Letter No.NB.PCD (Zones)/H-733/PR7(A) (Tamil Nadu)/2003-04 dated 17^th February 2004.

2. The Principal is repayable in ten equal instalments commencing from the third year of drawal as on 1 April and 1 October irrespective of the date of drawal as under:

3. The loans drawn will carry interest at 8% per annum or such other rate of interest as may be specified by NABARD from time to time.

5. The loans sanctioned for the year 2003-04 should be drawn before the expiry of the financial year i.e. before 31 March 2004. The entire loan could be drawn in one lump sum or in instalments. Each drawal will be treated as a separate loan. The undrawn portion will lapse at the close of financial year.

6. It would be necessary for the State Government to furnish a copy of the order of Government of India consenting, in terms of clauses (1) and (3) of Article 293 of the Constitution of India, to the State Government borrowing the amount of loan sanctioned by NABARD. Further, a certificate stating that the loan to be drawn is within the limits, if any, fixed by the State legislature for the borrowings by the State Government, would also be required to be submitted at the time of each drawal. Besides, the State Government will also execute a mandate/letter of authority in favour of NABARD in the prescribed format, authorising NABARD to have the Current Account of the State Government with the RBI/Principal Banker debited in the event of default in repayment of principal loan or payment of interest, by the amount of default, and get the same registered with the Reserve Bank of India.

7. The loans granted by National Bank for Agriculture and Rural Development should be passed on to the beneficiary institution in the form of share capital contribution only.

8. The State Government is required to disburse the amount of loan to the beneficiary institution and submit utilisation certificate to NABARD in the prescribed format, within a maximum period of 6 months from the date of drawal. In the event of failure to submit the utilisation certificate within the stipulated period, the amount drawn may be recalled by NABARD. Additional interest of 2% per annum will be charged on the amount drawn and in respect of which utilisation certificate is not submitted, for the entire period from the date of drawal till the date on which the amount is refunded.

9. In case of default in repayment of loan or loans or any part thereof by due dates, the State Government shall be liable to pay to NABARD interest at 1% per annum (or such other rate as may be fixed by NABARD) over and above the normal applicable rate of interest on the principal amount in default for the period during which the default persists.

10. In the event of default in payment of interest or any part thereof on due dates, the State Government shall be liable to pay to NABARD interest at one percent over and above the rate of interest applicable on principal loan amount (or such other rate as may be fixed by NABARD) on the interest amount in default, for the period during which default persists.

11. No drawals against the sanctioned loans will be permitted, if submission of utilisation certificates in respect of loans disbursed earlier is in arrears and / or the unutilised amount is not refunded or any default under principal or interest is not cleared.

Sanction of NRC (LTO) Loans to State Governments under section 27 of NABARD Act 1981 for the year 2003-04

Sr.No.	Name of PACS	Regn.No./Date	Amount Sanctioned
DISTRICT: SALEM
1.	Vakurampatti	1570/29.05.1915	0.50
2.	Thalogai	1277/10.10.57	0.50
3.	keerampur	441/27.11.36	0.50
4.	Konoor	5561/24.02.21	0.50
5.	Muthalaipatty	7823/27.01.47	0.50
6.	Kattampalli	786/27.01.47	0.50
7.	B.Sellapamatty	463/10.02.38	0.50
8.	N.Minnampalli	462/02.06.38	0.50
9.	B.Kosavanpatti	418/21.11.35	0.50
10.	Pottanam Hindu	445/29.03.37	0.50
11.	Muthugapatty	467/24.11.37	0.50
12.	Alanganatham	4280/05.12.19	0.50
13.	Kolathupalayam	1074/26.5.50	0.50
14.	N.Thottakkoorpatty	133/09.03.22	0.50
15.	S.Nattamangalam	243/28.06.27	0.50
16.	A.K.Samudram	255/17.08.37	0.50
17.	Pachal	165/27.11.23	0.50
18.	Ramanaikkanpatty	262/13.12.29	0.50
19.	Vettambady	1775/01.06.16	0.50
20.	N.Pudukottai	1418/26.05.61	0.50