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NATIONAL BANK FOR AGRICULTURE AND RURAL
DEVELOPMENT
Department for Cooperative Revival and Reforms (DCRR)
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NB.DCRR/ /CAS/2007-08

18 May 2007

Circular No. 71/DCRR-04/2007

The Registrar of Cooperative Societies

Government of …………………….
……………………………………….
……………………………………….
……………………………………….

Dear Sir

Implementation of Revival Package for STCCS –

Introduction of Common Accounting System for PACS

Revival Package for the Short Term Cooperative Credit Structure (STCCS) announced by the
Govt. of India is now being implemented in your State. As you are aware, in accordance with
clause 8 (b)(ii) of the MoU executed by the State Government with GoI and NABARD in this
regard, NABARD is required to design and provide assistance for installation of a Common
Accounting System (CAS) for PACS.

2. A Common Accounting System for use by PACS has now been designed after
extensive consultations with various tiers of the STCCS and other stakeholders. The major
components of this CAS are :

(i) Applicability of universally accepted basic concepts and principles in

maintenance of accounts by the PACS.
(ii) Adoption of standard financial statements, viz. Balance Sheet, P&L A/c. and
Trading A/c.
(iii) List of a common set of General Ledger Heads of Account compatible with
financial statements; and
(iv) Maintenance of minimum essential and Standard Books of Accounts.
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ºã㶪Æã-‡ãŠìÊããà ‡ãŠãù½¹Êãñ‡ã‹Ôã, ºã㶪ÆÆã (¹ãîÌãÃ), ½ãìâºãƒÃ 400 051 Plot C-24,
G-Block, Bandra-Kurla Complex,Bandra (East), Mumbai 400051
›ñãäÊã Tel ( 022 ) 26530024/26539564 ¹ãõŠ‡ã‹Ôã Fax (022 ) 2653 0023 e-mail
dcrr@nabard.org

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3. Accounting systems and practices currently followed in PACS are largely determined
by the requirements of the Cooperative Societies Acts of the States concerned. However, lack
of uniformity in the accounting systems and standard financial statements coupled with
absence of provisioning for bad assets and other accepted practices have not only hidden their
actual financial position (as has evidently got reflected in the special audits conducted under
the GoI Package) but also hindered their business growth in many cases. Therefore, as
envisaged in Revival Package, it is necessary that the Common Accounting System, as
suggested now, is made applicable to all PACS including LAMPS and FSS. For the sake of
transparency, better maintenance of accounts and for presenting true and fair picture of the
financial position of the societies, it is imperative that all PACS prepare the financial
statements in the formats prescribed in the CAS.

4. In order to prepare the financial statements properly, it is necessary that the PACS
strictly use the GL A/c heads as suggested in the system and do not arbitrarily add any new
account heads.

5. As regards Books of Accounts, the societies are already having many of these books in
different formats. It is, therefore, left to the discretion of the CCS to decide about the use of
the Books of Accounts recommended here.

6. As decided in the second meeting of the National Implementing and Monitoring

Committee (NIMC) held on 7 September 2006, the PACS are required to prepare the financial
statements as indicated in the enclosed guidelines for CAS. This will ensure consistency,
transparency, data build-up and comparability of the PACS across the State, while adopting
basic and standard principles of accounting. In other words, while the State would have the
option to introduce the recommended CAS in full or to improve its existing system based on
the components of CAS, but it is compulsory that the contents, format and periodicity of the
financial statements with underlying basic principles of accounting indicated under the CAS
are introduced forthwith so that the annual accounts of 2008-09 are submitted as per these
statements.

7. It may be noted that this CAS and Management Information System (MIS) would be
the basis for the computerization in PACS. As steps are separately being taken for
computerization of PACS, it is necessary that the CAS is introduced in the PACS to be used
manually immediately so as to be ready for its computerization later.

8. It is emphasized that the course modules designed for PACS secretaries and board
members cover CAS, along with management, governance and business-development related
subjects. While the training on the subject will successfully introduce the CAS to the
participants, the Cooperation and Audit Departments also will have to provide guidance and
hand-holding support to the PACS in the beginning. NABARD will be willing to provide all
support to the Department in this regard.

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9. It is requested that suitable instructions may be issued at your end to the PACS for
introduction of the CAS and compulsorily preparing the financial statements as indicated in
the CAS with effect from 01 April 2008.

Yours faithfully

Sd./-

Prakash Bakshi
Chief General Manager

Encls: As above

Endt.No.NB.DCRR/ /CAS/2007-08 of date.

Copy together with enclosures forwarded for information and necessary action to :

1. The Joint Secretary (FS), GoI, Ministry of Finance, Deptt. Of Economic Affairs,
Banking Division, Jeevan Deep Bldg. Parliament St. New Delhi 110001
2. The Chief General Manager, Rural Planning & Credit Department, Reserve Bank
of India, Central Office, Fort, Mumbai 400 001
3. The EA to Chairman, NABARD, HO, Mumbai
4. The EA to Managing Director, NABARD, HO, Mumbai
5. The EAs to all Executive Directors, NABARD, Mumbai/New Delhi
6. The Chief General Manager, NABARD, All HO Departments, Mumbai
7. The Managing Director, National Federation of State Coop.Banks Ltd.
(NAFSCOB), J K Chambers, 5th floor, Plot No.76, Sector 17, Vashi, Navi Mumbai
400703.
8. The Chief General Manager/Officer-in-Charge, NABARD, All ROs/SOs. He is
requested to take up with the respective RCS to issue necessary guidelines to
PACS.
9. The Principal, National Bank Staff College, Lucknow.
10. The Principal, Regional Training College, NABARD, Mangalore
11. The Principal, Regional Training College, NABARD, Bolpur
12. The Joint Director, BIRD, Lucknow

H A P Rao
Assistant General Manager

shila pc/sheela/CAS MIS ICS/CAS Circular 22 may