CM Bhagwant Mann Launches Big Reforms to Strengthen Punjab’s Cooperative Banks

In a significant move to revive Punjab’s agricultural credit system, Chief Minister Bhagwant Singh Mann has launched a sweeping reform initiative to ensure that Cooperative Banks once again become a lifeline for small and marginal farmers.

Speaking at a high-level meeting in Chandigarh, CM Mann emphasized that farmers who repay on time should not suffer because of large defaulters who continue to block the flow of credit. “It’s unjust when those who work hard and pay back on time are penalized because others don’t. That ends now,” said Mann.

 Targeting Defaulters, Prioritizing Farmers

The Chief Minister noted that the worst-hit by this lending logjam are the honest, small and medium farmers. Surprisingly, he pointed out that many large farmers and even government employees have defaulted on cooperative bank loans, creating a financial bottleneck.

He has ordered the Cooperation Department to aggressively recover dues, especially from such defaulters. “Recovery from them is not just a financial necessity—it’s a moral responsibility,” he said.

 How Crop Loans Work—And Why Timely Repayment Matters

Punjab’s cooperative banking system disburses around ₹8,000 crore in crop loans annually through more than 3,500 cooperative societies. Loans are offered at a concessional interest rate of 7%, and farmers who repay on time enjoy a 3% interest rebate, effectively reducing the rate to 4%.

However, defaulting farmers not only miss out on this benefit—they end up paying 9.5% interest and often lose access to future loans.

CM Mann expressed dissatisfaction over the 65% average recovery rate, stressing the urgent need to boost it. “Those who pay on time should never have to suffer because others didn’t,” he reiterated.

 Celebrating Success: Dhuri Circle Leads the Way

In a heartening development, Mann praised the Dhuri circle, which boasts a 99% loan recovery rate. He announced plans to honour cooperative societies like these and showcase them as models across Punjab.

 A Call to NABARD & Streamlining Bank Leadership

The CM also addressed the cut in concessional refinance limits by NABARD, stating that it hurt a state like Punjab that carries the burden of feeding the nation. He committed to raising the issue directly with NABARD’s Chairman and called for restoring the ₹3,000 crore loan ceiling for 2025–26.

Further, in a move to reduce bureaucracy and improve accountability, CM Mann abolished the dual leadership system in district cooperative banks—removing overlap between Managing Directors and District Managers to ensure clearer command and responsibility.

Conclusion

This push by the Mann government signals not just a financial reform, but a moral reset. It prioritizes honesty, accountability, and fairness in agriculture finance—giving Punjab’s farmers the dignity and support they deserve.