Q.Explain the three-tier co-operative credit structure and show where the Maharashtra State Co-operative Bank fits into it.

The rural credit system is built as a pyramid of three levels, with the apex bank at the very top.

The three-tier co-operative credit structure organises short-term and medium-term rural credit as a pyramid of three levels, so that small societies can be made strong and money can flow from where it is plentiful to where it is scarce.

1. Base — Primary Agricultural Credit Societies (PACS). Thousands of small village societies whose members are the farmers of the village. They collect the savings of the village and lend directly to the cultivator for seeds, fertiliser and other short-term needs. They are the point of contact with the ordinary farmer.

2. Middle — District Central Co-operative Banks (DCCBs). One central bank per district, whose members are the primary societies of that district. Each acts as a balancing centre — pooling the surplus funds of some societies to meet the deficit of others — and links the village societies to the apex bank above.

3. Apex — the State Co-operative Bank. One bank for the whole state at the top of the pyramid. In Maharashtra this is the Maharashtra State Co-operative Bank (MSC Bank), whose members are chiefly the district central banks. It finances, guides and controls the whole structure, and links it to the RBI and NABARD. …

Do not describe the tiers without showing the flow of funds and where the apex bank sits. The key idea is that the apex bank …