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Meetings
MINUTES
OF THE 90TH MEETING OF STATE LEVEL BANKERS' COMMITTEE, RAJASTHAN
HELD AT JAIPUR ON 15TH SEPTEMBER, 2006 The 90th Meeting of SLBC, Rajasthan State was held on 15th September 2006 at Jaipur under the Chairmanship of Dr. Anil K. Khandelwal, Chairman and Managing Director, Bank of Baroda. Shri Anil Vaish, Chief Secretary, Government of Rajasthan, Shri S.K. Bhattacharyya, Managing Director, SBBJ, Shri B.P. Vijeyandra, Regional Director, Reserve Bank of India, Shri R. Narayan, Chief General Manager, NABARD, Secretaries to State Government, Representatives of Banks and other developmental agencies were also present on this occasion. The list of members, who attended the meeting, is annexed. Shri Nandan Srivastava, Convenor, State Level Bankers' Committee and Zonal Head, Bank of Baroda welcomed Dr. Anil K. Khandelwal, other dignitaries and participants to the meeting. He said that ever since the members last met on 11.07.2006, many events have taken place, particularly the State has been ravaged by unprecedented rains & floods in a dozen Districts causing extensive damage to crops, human & cattle lives. This has triggered focused deliberations on glaring problems of natural calamities and relief measures required for rehabilitation by Bank branches. He asserted that this needs to be deliberated upon with a view to evolve a coordinated approach of the administration and the Banks to lessen the misery caused by the unprecedented floods. He informed the house that the Banks in Rajasthan have extended credit to the priority sector to the extent of 60.07 percent of total advances of which the share of agriculture advances was 29.23 percent as of June 2006, as against the stipulations of 40 percent and 18 percent respectively - the benchmark set by Reserve Bank of India. Likewise the CD ratio of the State was 86.23 percent which by all standards ranks fairly well as compared to neighbouring States. Shri Srivastava stressed to explore new areas for increasing flow of credit to organic farming, agri exports, agro processing, cultivation of medicinal plants, contract farming, agri extension, wind & solar energy etc. and expressed his concern on the desired outcome of the recovery provisions. Shri R. Narayan, Chief General Manager, NABARD urged upon to synergise the efforts of all stakeholders to face the problems of natural calamities affected areas and also to concentrate on the financial inclusion. He observed that it would be easier to undertake relief works and other activities in this area through Self-Help Groups and ensure rural empowerment. He requested the Banks to increasingly come forward and participate in Farmers' Club programmes promoted by NABARD with a view to deliver credit and services to farmer clients through these vibrant farmers' club. Chief General Manager, NABARD reaffirmed his organization's commitment to expand credit in the areas like organic farming, agro processing medicinal & aromatic plant as also such other value addition based schemes. Shri. B.P. Vijayendra, Regional Director, Reserve Bank of India in his address shared the Reserve Bank of India's initiative of financial inclusion launched in Rajsamand District during August 2006. Expressing his satisfaction on good progress under the scheme as also of his wonderful experience with Government Secretaries, he called upon Banks to ensure that the entire district is fully covered by the end of March 2007. He also advised that RBI has signed an M.O.U. with State Government for reforms in urban cooperative sector Banks. He referred to the recent visit of Deputy Governor, RBI who interacted with Regional Rural Banks, Branch Managers of Rural Branches and controllers of Banks to make the rural credit delivery very healthy & robust. He emphatically said that this figures very high on their agenda. In this context he prevailed on The Bank of Rajasthan Ltd. to boost its credit flow under development activities at least to the mean level of all Banks in the State. While reviewing the doubling of credit flow to agriculture sector Sh. Vijayendra said that though Reserve Bank of India has already put appropriate policies at place, it is now to be ensured that credit percolates down to the needy farmers. He expressed all sympathies with the people affected by natural calamities and exhorted Banks to provide timely relief & come forward in the area of housing, which is an immediate need on account of tremendous loss, as some houses / units are totally submerged. All this prompted him to the need to look at the situation by duly prioritizing our activities. Regional Director, Reserve Bank of India further informed that Reserve Bank of India has taken some initiatives to see how the efforts of the Banks can be integrated with the relief measures undertaken by the State Government. Shri S.K. Bhattacharyya, Managing Director, SBBJ, heavily underlined the imperative need of relief measures to be initiated in flood affected areas. He wondered that an area such as Barmer, which hardly saw good rains in the past, is reeling under flood. He touched upon the problems of restructuring and rescheduling of loans in the areas affected by natural calamities. He brought to the notice of the house that 3-4 years ago, loans were rescheduled with moratorium of 2 years wherein the first installment is due in Nov. 2006. He raised a basic question - what will be the situation where loans are already rescheduled and now these beneficiaries are flood affected? Under the circumstances if loans are not rescheduled again, Bankers will have a pile of NPAs. He requested Reserve Bank of India to consider this issue - an issue which is hammering the mind of Bankers and being a mutual problem, has to be sorted out collectively. Managing Director, State Bank of Bikaner and Jaipur further advocated for the diversification of agricultural loans in the new areas like Allovera. Reiterating his concern for scaling up SHG programme, he suggested that with a large number of SHGs already linked with Banks, there is a need for micro enterprise promotion, which could best be done through federation of SHGs. Dr. Anil K. Khandelwal, Chairman and Managing Director, Bank of Baroda extended a warm & hearty welcome to all the dignitaries and participants. At the outset, he eloquently appreciated the proactive approach of vibrant Government officials to help the Bankers for the development of the State. On behalf of Bankers, he assured the Government that Banks would continue to play quite a significant role through the input of finance in this extra ordinary situation of the flood in the State. In his Key note address, he elaborately touched upon economic and Banking Scenario of the country and said that economic & monetary conditions of India would certainly cast their shadow on Banking business as the Country has witnessed a healthy economic growth accompanied with macro-economic stability during the last three years. Economic growth in the year 2005-06 was 8.4 percent, following 7.5 percent and 8.5 percent in the previous two years & with all future indications India is bound to accomplish the GDP growth of 10-12 percent in near future. Chairman and Managing Director of Bank of Baroda contended that the policy-makers have succeeded in absorbing the inflationary shock originating from higher global oil prices through an appropriate mix of fiscal and monetary measures and managed to bring down the inflation closer to 5.0 percent in the current fiscal year. With the help of relevant statistical data, the Chairman informed that as per the Advance Estimate of Agricultural Crops Production, total agricultural crop production grew by 7.6 percent during 2005-06 against 3.2 percent rise in the previous year. As per the CMIE estimates, agricultural production will grow by 1.2 percent in 2006-07. Food grains production is projected to grow by 1.7 percent and non-food grains by 0.7 percent, further Industrial activities continue to remain buoyant. India's key infrastructure industries grew at the rate of 9.0 percent in July 2006 compared with 2.3 percent a year ago and 6.4 percent in June 2006 as per the latest estimates. Similarly, India's industrial sector grew by 9.6 percent in June 2006 compared with 12.2 percent a year earlier and 11.1 percent in May 2006. Industrial growth in June 2006 was driven mainly by the manufacturing sector especially capital goods and consumers durable. He cited encouraging examples of the resilient economy which will have positive effects, like both the investment and consumption estimates in the economy are quite strong as capital goods and consumers durable within the manufacturing sector grew 23.7 percent and 19.9 percent, respectively. This industrial growth was much above market expectations, hence considering the overall picture the real GDP growth for the year 2006-07 is expected to be in the range of 7.5 percent to 8.0 percent. While highlighting the Monetary Conditions and Interest Rates, he mentioned the following trends. The latest statistics show that money supply in Indian economy has expanded by 19.9 percent (Y-o-Y) as of 18th August 2006. The growth was higher than 14.6 percent recorded a year ago.
With
regard to latest developments, he pointed out that the Micro, Small and
Medium Enterprises Development Bill, 2006 which will come into effect
from 02.10.2006, aims at strengthening small and medium enterprises and
helping them to remain competitive in the global market. Now the
Services sector is also included under the ambit of SME, the scope for
lending to SME sector by the Banking institutions has further widened.
Likewise Union Budget 2006-07 envisages the grant of short-term credit
to farmers at an interest rate of 7 percent p. a. on the principal
amount upto Rs.3 lacs for crop loans availed by the farmers for Kharif
and Rabi 2006-07 and RBI has already issued guidelines to the Banks in
this regard. After this aggregate reference of economic development at the national level, he congratulated the Banks operating in Rajasthan for their silent & significant contribution to the State economy, which has become possible as a result of their collective efforts and positive environment in the State. He categorically advised The Bank of Rajasthan to establish strong emotional attachment & swing in spurring campaign for the development of the State. Chairman and Managing Director, Bank of Baroda advised Bankers to see the farmers and the rural artisans as customer and not as beneficiaries because the moment we start seeing them as customer, we have to design new products, new channels for distributions and the mind's whole paradigm is changed for them. Dr. Khandelwal expressed satisfaction on CD ratio, which is placed at 86 percent as of June as compared to 40-50 percent as seen 4-5 year ago. He was also comfortable on the progress of most of the Banks under Government Sponsored Programmes. While coming to SHG & Women empowerment issue, he wished to see new activities and requested Bankers to make the SHG linkage programme meaningful in a much more organic manner. Dr. Khandelwal once again requested the State Government to amend the Public Demand Recovery Act in order to enable Bankers to be emotionally encouraged to take up these activities. He spelt out an urgent need to understand the fundamental nature of recovery process for efficient recycling of the funds (which is public money) by Banks. Shri Anil Vaish, Chief Secretary made a detailed presentation on the flood calamity in the districts of Barmer and Jaisalmer. In his opening remarks, he mentioned that the reason for the flood calamity was extraordinary heavy rainfall, taking place in a period of 3 to 7 days in the Districts of Barmer and Jaisalmer. This rainfall was almost double of the normal annual rainfall and given the topography of area, the flood water could not recede and got accumulated over 9 villages of Barmer and 6 villages in Jaisalmer which are completely submerged till date. The State Government is in the process of resettling these villages in adjoining areas. Seeking the help of Banking system in the resettlement programme, he called upon the Banks to support construction of 1500 housing units, 12 units of gypsum mines and replacement of about 50000 animals. Shri Lalit Panwar, Principal Secretary, Relief also spoke on the occasion and emphasized the need for timely action. As a follow up, SLBC has constituted a committee to be chaired by Regional Director, Reserve Bank of India with NABARD, major Banks and Shri Subhash Garg, Secretary, Finance, Government of Rajasthan as members to quickly work out the relief packages. Thereafter Shri Nandan Srivastava, Convenor took up the agenda items for discussions. Agenda No. 1
Agenda
No. 2 Performance under Key Business Parameters as of Sept. 2006. The house noted that performance of the Banks on Key Business Parameters as of June 2006 amply demonstrate that Banking in Rajasthan has made possible the accelerated dimensions. Banks have facilitated agriculture, industries and other priority sector credit support during last 3 and half decades. Banks have done exceedingly well on the front of Social Banking :
Commercial Banks, RRBs and Cooperative Banks put together have
registered 2.71 percent and 2.28 percent growth in aggregate deposits
and aggregate advances respectively over March 2006. It was also
informed that the growth of deposit and advances is very minimal. Agenda No. (3 to 7) GOVERNMENT SPONSORED PROGRAMMES Agenda Item from 3 to 7 dealt with the progress posted under various poverty alleviation and employment generation Government Sponsored Programmes. The progress during the first quarter is not satisfactory either because of late sponsoring of applications or late trickling down of targets to the branches. The achievements are even less than proportionate time frame in the process of phased implementation. The following observations were made with regard to these programmes :
It
was suggested that the following remedial measures are required to be
initiated immediately :
Progress of SGSY Convenor SLBC informed the house that as of June 2006, 4946 applications have been sanctioned and out of these only 1584 applications have been disbursed. He called for a perfect coordination among Bankers and Government Officials for achievement of the targets. He requested Banks to immediately disburse the sanctioned cases as performance upto June 30th, 2006 is not satisfactory. He also requested DRDAs to take help of NGOs and District Women Development Agencies (DWDA's) in forming and nurturing SHGs. Shri Abhay Kumar Singh, State Project Director, DPIP was invited to make a presentation on issues concerning financing of SHGs / CIGs under DPIP. Deputy General Manager, NABARD supplemented the presentation of Shri Abhay Kumar and requested the Banks to scale up financing of CIGs on the pattern of SHGs since only such of the CIGs which conform to SHG philosophy are being sponsored by the Banks in the 7 districts covered under DPIP. Shri Abhay Kumar also raised the issue of financing CIGs / SHGs having membership less than 10. He apprised the house about some 4000 odd sub groups promoted under State Director, DPIP. Reacting to the request of the DPIP. Deputy General Manager, NABARD indicated that the State Government has also taken a view not to finance groups having membership less than 10 under SGSY. However since these groups are already in existence under DPIP and have already been provided with large investment grants, therefore, Banks may consider individual SHG on case by case basis. (Action : Banks and State Government) Performance under Prime Minister Rojgar Yojana (PMRY) It was informed to the house that as of June 2006, 278 applications have been sanctioned and out of these only 145 applications have been disbursed. Convenor, SLBC requested the Banks to expedite disbursement in the cases where sanctions have already been accorded. Chairman and Managing Director, Bank of Baroda expressed his concern that the reason behind the poor performance of the Banks in financing PMRY scheme is low recovery percentage so Banks are not inclined to come forward. Representative of Industries department echoed that performance of some Banks is still poor and requested the Banks to sanction 90-95 percent of the loan and accord the disbursement so that training can be imparted to the applicants. (Action : State Government and Banks) Implementation of Swaran Jayanti Sahari Rojgar Yojana (SJSRY) As of June 2006, 2266 applications have been sanctioned and out of these 1594 applications have been disbursed. The house noted that Progress under this scheme is also very low as sanction is only 18 percent and disbursement is mere 5.41 percent. (Action : All Banks) Progress under SCDC/ SLR Schemes Convener, SLBC requested SC/ST Corporation to help the Banks for recovery of overdues under the aforesaid schemes by arranging recovery drives. As of June 2006, 1884 applications have been sanctioned and out of these only 616 applications have been disbursed. He said that the percentage of sanctioned applications to sponsored applications under SLRS is not satisfactory and requested Banks to expedite disposal of applications. (Action : All Banks) Rural Employment Generation Programme. The house was informed that against the quarterly target of 46 projects, Banks have sanctioned only 5 projects involving an amount of Rs.11.98 lacs (against the target of 51.53 lacs Margin Money). Banks are requested to expedite the disposal of pending applications and speed up disbursement of sanctioned applications and submit the subsidy claims within the stipulated time. Secretary (SSI & KVIB) urged KVIC/ KVIB to put in more efforts to sponsor adequate no. of applications. (Action : All Banks, KVIC, KVIB) Agenda No. 8 Doubling the flow of credit to Agriculture : The house appreciated that the Banks in Rajasthan are committed to make available both production and investment credit support to farm as well as non-farm sector activities. Performance of the Banks under farm sector package was very impressive during 2004-05 when the Banks not only surpassed the set target under the farm credit package, but the targets for doubling the farm credit in three years was nearly achieved in the first year itself. However, during 2005-06, some Banks could not achieve the targets given to them (90.20%). However, their achievement in the first quarter of 2006-07 is commensurate with the quarterly targets (27.14%). The performance needs to be further improved in terms of extending fresh loans to farmers covered under relief measures, financing of agricultural term loans, expanding credit flow for agri clinics and agri business centres and financing for redemption of private debt. etc. Therefore, all Banks were requested to plan a suitable strategy for stepping up credit flow to agriculture sector, thereby ensuring achievements of targets allocated to them for the year 2006-07. It was also observed that numbers of new farmers are not being reported correctly by Banks. Convenor, SLBC made a fervent appeal to Banks to improve the reporting technology & furnish correct information to SLBC and all other concerned agencies. (Action : Banks) Agenda No. 9 Self Help Group - Bank Linkage Programme Smt. Alka Kala, Principal Secretary (Women & Child Development Department) expressed her concern on certain practices of Banks where in certain cases :
(Action : NABARD, WCD & Banks) Agenda No. l0 Natural Calamities and Banks The meeting was predominantly characterized by the discussions on flood affected district and relief measures to be provided by Banks. All the members in an unequivocal voice, showed serious concern on the distress of the people in 12 Districts ravaged by flood, particularly the Barmer District where normal life and business have been crippled & means of production are destroyed. It was informed by Convenor, SLBC that though it may be a difficult task to combat these extreme acts of nature, but at the same time it is not insurmountable. As a matter of fact Banks have a duty to participate in the relief operations, especially by promptly providing credit. While the State administration has already placed its spearhead team in action, Bankers will also be required to provide relief measures. The Chief Secretary, Government of Rajasthan narrated at length the heavy losses in terms of property & livestock ravaged by the unprecedented rains in 12 Districts of south east and western Rajasthan, more particularly in Barmer District, which is almost all the time drought prone area, but this time it has paradoxically received excess rains to the extent of 197 percent of the annual normal rainfall in 3 days. He made a very painful observation that many villages of the Districts are submerged in the water, as percolation of water in sub soil is slow because some part of the District is endowed with Gypsum. Consequently houses are completely submerged, people have lost their house and are still sitting on sand dunes. Referring to the nature of relief work initiated by the Government, he said that they are in the phase of resettlement and rehabilitation. While indicating the priorities for the flood affected area, the Chief Secretary heavily underlined the need for housing loan (Shelter), financing animal husbandry (animals being major source of their income), short term advances like crop, certain type of non farm activity loans to provide economic base for sustenance of these people etc. He stressed to do all this in a campaign mode. The house expressed an urgent need to convene special DCC meeting for the cause. The Chief Secretary, told that he would ask the collectors to coordinate with the representatives of the Banks in the districts and impressed upon controllers of the Bank to instruct their field functionaries on the very next working day to approach the District administration for initiating a coordinated strategy. The Chairman and Managing Director, Bank of Baroda said that SLBC being too large a forum, discussion on this issue may not elicit desired results immediately, hence a small groups of Banker & Government Official be formed to work on relief measures. He requested the Regional Director of Reserve Bank of India to coordinate the efforts of this committee. Accordingly as per the nomination of the Chief Secretary and representation of Bankers the following committee was formed.
Shri Lalit Panwar, Principal Secretary (UHD) briefed the house about the nature of dwelling units to be constructed according to agro climatic conditions and various other activities like arts and crafts to be financed by Banks. It was reiterated that the Lead District Managers of these 12 districts should be in continuous touch with district collector and initiate all preparatory action to combat the Natural Calamities. (Action : State Government, Banks & LDMs) Agenda No. 11 Financial Inclusion Convenor, State Level Bankers Committee informed the house that financial Inclusion is an effective tool to meet the objectives related to saving, livelihood & economic infrastructure apart from providing an efficient system. He told that there is a large segment of population, which does not have access to basic Banking services. He proposed a committee of SLBC for the purpose of monitoring the progress of financial inclusion in Rajsmand District - an identified district for 100 percent financial inclusion in the State. The composition of the committee is as under : Chairman - State Bank of Bikaner & Jaipur Members - RBI - NABARD - Bank of Baroda (SLBC Bank) - The Bank of Rajasthan Ltd. The committee was duly vetted by SLBC. Secretary, Rural Development pointed out that he has come across some incidents where groups' accounts are reckoned as tools for attaining the objective of Financial Inclusion. Regional Director, Reserve Bank of India objected to this kind of second category financial inclusion & asserted that financial inclusion approach should not be based on groups but on individual, thus he advised to do away with such practices. It was decided to declare the Rajsamand District 100 percent financial inclusion by March 2007. The progress shown so far by The Bank of Rajasthan & State Bank of Bikaner and Jaipur is satisfactory. (Action : Banks) Agenda No. 12 Credit Flow to Artisans : It was informed that the Artisans Credit Card (ACC) Scheme aims at providing adequate and timely assistance from the Banking institutions to the artisans to meet their credit requirements. The Scheme is to be implemented both in the rural and urban areas. Secretary SSI & KVIB expressed his anguish on the tardy progress of the scheme despite the fact that State Government has already initiated all enabling measures to facilitate the financing process by Banks. He was unhappy to point out that despite a series of meetings at different fora & nice talking at all level, we are not even nearer to the targets. The Chairman impressed upon Bankers to implement the scheme in letter & spirits and pass on instructions to operating units immediately. In order to effectively implement the scheme, the following strategy was suggested :
He advised all concerned to initiate all possible steps for smooth implementation of "Artisans Credit Card" and Credit Guarantee Scheme which will enable the financially starved Artisans to revive the age old handicrafts sector with innovative dimensions and thus enrich the cultural tradition of the State in more than one way. (Action : All Banks and DICs) The meeting concluded with a vote of thanks to the chair and to the most distinguished guests. Nandan Srivastava Convenor, SLBC |
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