Confirmation of the Minutes of the Earlier Meeting

AGENDA: 1 131st SLBC

CONFIRMATION OF THE MINUTES OF THE EARLIER MEETING

The minutes of the 130thState Level Bankers’ Committee Meeting convened on 28.06.2012 (already circulated vide SLBC letter dated 20.07.2012) may be confirmed.

AGENDA No: 2

New Issues 131st SLBC

1. Setting up of Rural Self-Employment Training Institutes (RSETIs)

All the Four Banks having Lead District responsibilities have since opened RSETIs in the lead districts allotted to them (Total 31 RSETIs).

In addition to the 12 Lead districts allotted, IOB has recently opened a RSETI (13th) at Kothagiri in Nilgiris District to impart skill training to Tribal People of the Nilgiris District.

Performance of the RSETIs during April to August 2012:

Sl No / Total Number of RSETI / No of training programme conducted during April- August(12-13) / No of persons trained / No of persons secured employment/self employment
1 / 31 / 180 / 4823 / 2652

The following RSETIs functioning in Tamil Nadu have been awarded “A” grade among all the RSETIs in the country:

1)IOBRSETI ( Indian Overseas Bank) -Thanjavur & Trichy - A

2)CANRSETI (Canara Bank) -Coimbatore, Theni, Nilgiris, Dindigul, Erode & Madurai – A

3)INDRSETI (Indian Bank) - Tiruvallur, Salem - A

The Directors of the above RSETIs have received the award from Shri.Jairam Ramesh, Union Minister of Rural Development in a function held on 28.07.2012 at Vigyan Bhavan Delhi. SLBC congratulates the Directors for their achievement.

New Issues 131st SLBC

2. Setting up of Financial Literacy & Credit Counselling Centres (FLCCC)

The High Level Committee set up by RBI had reiterated the necessity to cover initiatives under financial literacy and credit counselling while broad basing the Lead Bank scheme. On the basis of the above recommendation, RBI advised Lead Banks to open a Financial Literacy and Credit Counselling Centre (FLCCC) in every district where they have lead responsibility.

Four Lead banks namely IOB, Indian Bank, Canara Bank & State Bank of India have completed establishment of FLCCCs in their lead districts (31 districts). Apart from the four lead banks, Bank of India and ICICI Bank Ltd have opened FLCCC each one at Chennai.

FLCCC Progress Report for the Quarter ended June 2012.

Sl. No / Name of the Bank / No of FLCCC / No.of persons Counselled during the quarter / No. of Outdoor activities undertaken during the Quarter / No of persons participated in outdoor activities during the Quarter
1 / IOB / 13 / 772 / 78 / 4566
2 / Indian Bank / 10 / 1732 / 38 / 539
3 / Canara Bank / 7 / 945 / 112 / 5548
4 / SBI / 2 / 0 / 0 / 0
5 / BOI / 1 / 66 / 0 / 0
6 / ICICI Bank Ltd / 1 / 106 / 1 / 15
TOTAL / 34 / 3621 / 229 / 10668

Though State Bank of India has set up FLCCCs at their lead districts (Ariyalur & Thoothukudi), theyare yet to commence operations. State Bank of India is requested to take immediate steps to appoint counselors and to start Financial Literacy initiatives and Credit counselling.

New Issues 131st SLBC

3. Extension of Swabhiman – providing banking services in every villages having population of over 1600

A) Directions from Ministry of Finance, GOI

Ministry of Finance, Government of India, have advised the revised guidelines on financial inclusion - “Extension of Swabhiman” for providing banking services in every village having population of over 1600 by March, 2013.

Total villages identified and allotted to various banks stands at 1676 (villages with population over 1600 to 2000) as per 2001 census. Numbers of Villages allotted to various Banks in Tamilnadu isdisplayedin SLBC website (

As per the Monthly progress report submitted by banks in SW3 format, 98 villages only have been covered as on 31.07.2012. The details are furnished in the annexure. The progress is very low when compared to the total no. of 1676 villages to be covered. Member banks are requested to ensure extension of banking services to the allotted villages to the respective banks by before December, 2012 as already agreed in 130th SLBC meeting held on 28.06.2012.

As the progress report is to be keyed in directly in the Ministry of Finance website before 5th of every month, all the participating banks are requested to submit the monthly progress report (SW3- format enclosed) to SLBC by the 5th of the succeeding month without fail.

B) Directions from Govt of Tamil Nadu

The Chief Minister of Tamil Nadu has advised the banks to provide banking outlets in all villages in Tamil Nadu at the earliest. All banks accepted the views of the Chief Minister. It was also resolved in the 130th SLBC to cover all the villages in the State under Financial Inclusion by 31.03.2013 irrespective of the population.

SLBC has already advised all DCC Convenors and LDMS to identify the villages and allot to the banks. So far we have received the data from 21 LDMs on the allotment of villages to the member banks. Identification and allotment of all villages with 0-1600 population will be completed soon. Member banks are requested to cover all the villages with 0-1600 population before March, 2013.

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PLEASE REFER SCANNED IMAGE NO.1

PLEASE REFER SCANNED IMAGE NO.1

New Issues 131st SLBC

4. Campaign to ensure at least one Bank Account for each family in all villages and urban areas.

Initially, Ministry of finance, Government of India advised to launch a campaign to ensure each family living in the FI villages has an account with the branch to facilitate electronic benefit transfer of subsidies under the 32 schemes of Govt. of India. For such electronic transfer of subsides, it is important that the beneficiaries have an account in the service area bank in tune with the guidelines of the Reserve Bank of India on “ One District- Many Banks-One Leader Bank” Model .

Ministry of Finance, Government of India has clarified that opening of accounts should not be restricted only to FI Villages and the campaign should cover all the rural villages and urban areas by banks in their service area.

Copy of the clarification letter from Ministry of Finance dated 15.05.2012 is enclosed. Further, Ministry of Finance informed that, as per 2011 census, only 52.5% of the households have a bank account in Tamil Nadu which is very low when compared to many other states.

In order to accomplish the account opening and to have proper monitoring of the progress the various modalities are suggested by Ministry of Finance letter dated 03.08.2012. A copy of the letter is enclosed. It has been decided in the special SLBC held on 10.08.2012 to ensure opening of “One bank account for one family” in all the villages and urban areas in the State.

All the member banks and Lead Districts Managers are requested to carry on the campaign for opening of accounts as per the directives. All member banks are requested to submit the monthly progress report on or before 4th of every succeeding month to SLBC.

The latest bank wise position as of 31st August,2012 in opening bank accounts for each family is enclosed.

STATE LEVEL BANKERS' COMMITTEE, TAMIL NADU
CONVENOR : INDIAN OVERSEAS BANK
Progress Report On One Bank Account for Each Family in all Villages and Urban Areas as on 31.08.2012
S.No / Name of the Bank / Total Number of Accounts Opened upto August 2012
1 / Allahabad Bank / 13227
2 / Andhra Bank / 1183
3 / Axis Bank Ltd., / 0
4 / Bank of Baroda / 53741
5 / Bank of India / 12422
6 / Bank of Maharashtra / 0
7 / Canara Bank / 301969
8 / Catholic Syrian Bank Ltd. / 225
9 / Central Bank of India / 69309
10 / City Union Bank Ltd. / 25979
11 / Corporation Bank / 4252
12 / Dena Bank / 5938
13 / Dhanalakshmi Bank Ltd. / 173
14 / Federal Bank Ltd. / 182
15 / HDFC Bank Ltd / 1409
16 / ICICI Bank Ltd / 3955
17 / IDBI Bank Ltd / 0
18 / Indian Bank / 294384
19 / Indian Overseas Bank / 537700
20 / Indus Ind Bank Ltd / 0
21 / ING Vysya Bank Ltd. / 0
22 / Jammu & Kashmir Bank Ltd / 0
23 / Karnataka Bank Ltd. / 0
24 / Karur Vysya Bank Ltd. / 6281
25 / Kotak Mahindra Bank Ltd / 0
26 / Lakshmi Vilas Bank Ltd. / 0
27 / Oriental Bank of Commerce / 1539
28 / Pallavan Grama Bank / 17609
29 / Pandyan Grama Bank / 109360
30 / Punjab & Sind Bank / 0
S.No / Name of the Bank / Total Number of Accounts Opened upto August 2012
31 / Punjab National Bank / 14480
32 / South Indian Bank Ltd. / 6070
33 / State Bank of Bikaner & Jaipur / 0
34 / State Bank of Hyderabad / 0
35 / State Bank of India / 475707
36 / State Bank of Mysore / 1089
37 / State Bank of Patiala / 0
38 / State Bank of Travancore / 54610
39 / Syndicate Bank / 82822
40 / TamilNaduState Apex Co-op / 0
41 / Tamilnadu Mercantile Bank Ltd / 659
42 / U C O Bank / 821
43 / Union Bank of India / 38119
44 / United Bank of India / 0
45 / Vijaya Bank / 7127
TOTAL / 2142341

F. No. 6/23/2012-FI

Government of India

Ministry of Finance

Department of Financial Services

*******

JeevandeepBuilding, Sansad Marg

New Delhi, dated the 24th July, 2012

To

All SLBC Convener Banks

Subject: (i)Urban Financial Inclusion - Launch of campaign to ensure atleast
one bankAccount for each family

(ii) Capturing of Biometrics while opening accounts - regarding

Sir,

I am directed to refer to this Department’s letter no. F.No.8/11/2011-FI dated 15th May, 2012 wherein banks were advised to launch a campaign to ensure at least one bank account for each family in the service area of a branch having rural villages attached to it.

2. Government of India has been emphasising the need for transferring all benefits including MGNREGA wages and various cash subsidies to beneficiaries by direct credit to their bank accounts. These beneficiaries are not only inhabitants of rural villages but also comprises of urban poor and slum dwellers residing in the Urban/ Metro centres.

3.In order to provide banking services to entire population residing in Urban and Metro Centers – (Urban Financial Inclusion) , so as to financially include the urban poor, slum dwellers and the inhabitants of urban / metro villages and facilitate electronic benefit transfer in respect of benefits/ subsidies under various Government schemes directly into the account of the beneficiaries residing at these centres, it has been decided that the said campaign to ensure one bank account per family should also be launched in such Urban areas for the purpose of Urban Financial Inclusion .

4.All urban areas have a Municipal Corporation or a Municipality or a Municipal Council and the entire area is divided into “Wards”. Districts in Metros may not have Lead District Manager (LDM). Generally, the service area approach is not adopted for urban areas. In districts, where LDM has already been provided, necessary instructions may be issued to the LDMs to allocate a Ward or group of wards to a particular branch (for the purpose of opening of accounts as per instructions issued vide letter No. F.No.8/11/2011-FI dated 15th May, 2012) as follows:

(i) In Wards/ circle where a branch of bank exists, the responsibility should be entrusted to that branch;

(ii) In Wards/ Circle, where branch of more than one bank exists, the responsibility may be assigned to one of the branches operating in the ward.

(iii) In Wards/ circle where no branch of a bank exists, a neighbouring bank branch may be assigned the responsibility;

In case of non – lead Districts without LDMs, the above exercise of allocating wards to bank branches be done by a duly authorised senior officer of the SLBC convener bank. The allocation of branches for opening of accounts as above by LDM/ duly authorised officer be subsequently got ratified by SLBC.

5.It is under stood that under the campaign, some of the banks while opening accounts, are not capturing the biometric details of the customers and the campaign is restricted to FI villages. It is clarified that:

(a) The campaign is to be launched by the bank branch to open an account for the family in all villages attached to the service area of the branch and not just in FI villages. The subject matter of letter dated 15.05.2012 under reference may accordingly be read as “Launch of campaign to ensure at least one bank Account for each family in rural villages– regarding”.

(b)Since accounts opened under the campaign would facilitateEBT including transfer of all benefits and various cash subsidies to beneficiaries by direct credit to their bank accounts and the beneficiary should be able to withdraw the benefit from the BC channel, banks should while opening new bank accounts also ensure to capture biometric details of the customer (as done during the ‘Swabhimaan’ campaign) as per the standards notified in the recent RFP for engaging BCs.

6.All SLBC convener banks are requested to bring the contents of this letter to all member banks to ensure compliance.

Yours sincerely,

(J.K. Mehan )

Under Secretary to Govt. of India (FI)

Tel: 23748767

e-mail:

Copy to:

1.Chief Secretary of all States/ UTs

2.Secretary, (Urban Development), Ministry of Urban Development, Govt. ofIndia

3.CMDs of all PSBs

4.CEOs of Pvt. Sector Banks

5.CEOs of Cooperative Banks

6.Chairmen of all RRBs ( through sponsor PSBs)

7. NIC – for uploading on the website of DFS

F. No. 6/23/2012-FI

Government of India

Ministry of Finance

Department of Financial Services

*******

JeevandeepBuilding, Sansad Marg,

New Delhi dated the 3rd August, 2012.

To

1.Chairman/ CMDs of all PSBs

2.Chairman of all RRBs ( through Sponsor banks)

2.All SLBC Convener Banks

Subject: Opening of one bank account per family

Sir,

Please refer to this Department’s circular FI dated 15th May 2012 regarding opening of one bank account per family to facilitate electronic benefit transfer and financial inclusion. It was clarified that families must have one account in a bank on Core banking Solution and having NEFT facility.

2.It would be noted that, as per 2011 census, about 58.7% households, comprising of 54.4% rural households and 67.8% urban households, had reported availing banking facilities. Out of the 24.69 crore households, 14.48 crore households reported availing banking services. Nearly 10 crore households were not availing banking services. State wise details are enclosed.

3.Under Swabhimaan, over 3.25 crore bank accounts in rural areas have been opened. It would be seen that there still remains a large number of households which do not avail banking services. It was in the context of financial inclusion of the excluded and to facilitate the electronic benefit transfer that banks were advised to ensure opening of one bank account per family.

4.In order to accomplish the objective and to have proper monitoring of the progress the following modalities are suggested:

Opening of Bank Accounts

1. Service area bank in rural areas and banks assigned the responsibility in specific wards in urban area would be responsible for ensuring that every house hold has one bank account. This would be achieved in collaboration with other banks in the area

1. Latest voter list of the area concerned may be taken as a reference for verifying that every house hold has a bank account.

1. In case Cooperative or Urban Cooperative or Local Area Banks are on CBS and have NEFT facility, there should be no need to open another account in other bank.

1. To facilitate Electronic benefit Transfer, the names of other family members can be added to any existing account. Banks need not insist on opening a new account unless the person concerned desires a new account.

1. Information about opening of bank accounts must be prominently displayed in the villages by the service area bank/designated bank along with the person/bank to be contacted.

Monitoring Progress

1. Lead District Managers in the districts and the SLBC Convenor in the State would be responsible for monitoring and ensuring that every house hold has a bank account.

1. The figure for number of households as per the latest census data may be used to compare the number of saving bank accounts. Since many households would have more than one saving bank account, number of saving bank accounts should be over 100% of the number of households, preferably 125-140%.

1. LDM and SLBC Convenor would compile information on number of households and the number of saving bank accounts every week to monitor progress.

1. State wise information on the number of households and the number of saving bank accounts would be sent to the Department of Financial Services at by 5th of every month by SLBC Convenor banks. This would be sent from August 2012.

5.CMDs of SLBC Convenor Bank would are expected to supervise and guide the process of opening of bank accounts in the respective states.

6.This issues with the approval of Secretary ( FS) .

Yours faithfully,

(Sandeep Kumar)

Director (FI)

Encl: as above

Copy for information/ necessary action to:

-All Nodal Officers of DFs for SLBCs

Annexure

State wise Percentage of Households availing Banking Services in 2011

S. No. / India /State/UnionTerritory # / Percentage of Households availing Banking services
01 / A & NIslands / 89.3
02 / Andhra Pradesh / 53.1
03 / Arunachal Pradesh / 53.0
04 / Assam / 44.1
05 / Bihar / 44.4
06 / Chandigarh / 80.1
07 / Chhattisgarh / 48.8
08 / Dadra & Nagar Haveli / 56.7
9 / Daman & Diu / 65.4
10 / Delhi / 77.7
11 / Goa / 86.8
12 / Gujarat / 57.9
13 / Haryana / 68.1
14 / Himachal Pradesh / 89.1
15 / Jammu & Kashmir / 70.0
16 / Jharkhand / 54.0
17 / Karnataka / 61.1
18 / Kerala / 74.2
19 / Lakshadweep / 85.3
20 / Madhya Pradesh / 46.6
21 / Maharashtra / 68.9
22 / Manipur / 29.6
23 / Meghalaya / 37.5
24 / Mizoram / 54.9
25 / Nagaland / 34.9
26 / Odisha / 45.0
27 / Puducherry / 64.0
28 / Punjab / 65.2
29 / Rajasthan / 68.0
30 / Sikkim / 67.5
31 / Tamil Nadu / 52.5
32 / Tripura / 79.2
33 / Uttar Pradesh / 72.0
34 / Uttarakhand / 80.7
35 / West Bengal / 48.8
All INDIA / 58.7

Tamil Nadu

No. of Households not having bank account : 87. 81 lacs

No. of accounts opened upto August 2012 : 21.43 lacs

No. of households yet to be covered : 66.38 lacs

Source: Census of India 2011

New Issues 131st SLBC

5. Strategy and approach for “Electronic Benefit Transfer “ (EBT)

Ministry of Finance, Government of India has advised that benefits like pension, subsidies and grants under 32 central government schemes should be transferred to the beneficiaries’ bank accounts by electronic transfer system only.

Electronic benefit transfer system would include compilation of information on benefit transfer compatible with the banking system; transfer of funds to the beneficiaries’ accounts; facilities for withdrawal of the amount by the beneficiaries as per their requirement. This system will be extended progressively to the entire country.

In order to transfer the benefit electronically to the beneficiaries’ accounts, the following strategies and approach are given by Ministry of Finance.

Opening of bank accounts for the beneficiaries and mapping the list of beneficiaries with the bank account details.

Transfer of benefit to the beneficiaries’ accounts with help of Central Plan Scheme Monitoring System (CPSMS).

Till such time the departments are ready for transfer of benefits through CPSMS, they will furnish the electronic transfer details of beneficiaries by hard/soft copies to the banks and banks can start EBT.

Once, NPCI stabilized the EBT will be done by automated clearing house mechanism.

The charges to be reimbursed to the banks by the concerned department of Central government would be 1.5% of the value of the transaction or 25 % of the permissible administrative expenses, whichever less.