22
MINUTES OF THE 103rd
MEETING OF THE STATE LEVEL BANKERS’ COMMITTEE,
HARYANA HELD ON 03.04.2008
The 103rd meeting of the State Level Bankers’ Committee, Haryana was held on 03.04.2008 to review the performance of banking system for the period ended Dec., 2007 at Hotel Taj, Sector-17, Chandigarh. Shri Pawan Kumar Bansal, Hon’ble Union Minister of State for Finance, was the Chief Guest and Dr. K.C.Chakrabarty, Chairman & Managing Director, Punjab National Bank presided over the meeting.
Shri R.K.Gupta, General Manager, Punjab National Bank, Convener, SLBC, Haryana extended warm welcome to Shri Pawan Kumar Bansal, Union Minister of State for Finance, Dr. K.C.Chakrabarty, Chairman & Managing Director (Chairperson of the SLBC), Shri Hardeep Kumar, IAS, Spl.Secretary, Finance and Director, IF&CC, Haryana, Shri Roshan Lal, IAS, Spl. Secretary and Director, Rural Development, Haryana, Dr. Amandeep Singh, IRS, OSD to MOS, GOI, Shri Sanjiv Jindal, Dy. Secretary, Ministry of Finance, Government of India, Shri A.Udgata, CGM, RBI, New Delhi, Smt. Kamala Rajan, GM, RBI, Delhi, Shri V.Rama Krishna Rao, CGM NABARD, Shri Surender Kumar, Executive Director, National Housing Bank, Shri V.Murli, GM, SBI, Shri N.Sheshadri, GM, Canara Bank and other dignitaries representing various Banks, Financial Institutions, Government Departments and Media persons. He expressed his gratitude for the continued support extended to Banks by the State Government, RBI & NABARD in meeting various developmental commitments. Shri Gupta also briefed the house about important proceedings of the meeting of Steering Committee to SLBC, Haryana held on 04.03.2008. Shri Gupta expressed his satisfaction over the performance of the Banks especially under National Goals, Financial Inclusion, Agri Credit, Credit Flow to SME Sector, Achievement under ACP and Nayak Committee Recommendations etc. Shri Gupta also requested the Banks to ensure submission of error-free data to SLBC and also to send the same data under various parameters as submitted to RBI and NABARD so as to avoid any inconsistency in data. Shri Gupta expressed his gratitude towards all the banker colleagues and Government Departments for extending full support for smooth conduct of Steering Committee meetings and Special meetings called for improving progress under PMRY. While concluding, Shri Gupta requested Dr. K.C.Chakrabarty, the Chairperson of the meeting to deliver his keynote address.
Dr. K.C.Chakrabarty, Chairman & Managing Director, Punjab National Bank, in his keynote address extended warm welcome to the Chief Guest Shri Pawan Kumar Bansal, Union Minister of State for Finance, Senior Dignitaries on the dais, Senior Officials of various Government Departments, Banks and Media personnel.
At the very outset Dr. Chakrabarty expressed his satisfaction about achievement under various developmental parameters up to the period ended Dec., 2007. He shared with the house that Lead Bank Scheme is very close to his heart but he pointed out that the banking has still not reached all the people. He put forth that during the last forty years of implementation of Lead Bank Scheme, the scheme has not been reviewed so far. However, it is for the first time that RBI has constituted a committee for the same of which he is also a member. He emphasized that without financial inclusion, inclusive growth is not possible and the main objective of Lead Bank Scheme must be the 100% Financial Inclusion. He appreciated the efforts of the banks operating in Haryana for the work done so far towards attainment of 100% Financial Inclusion. Dr. Chakrabarty also appreciated Shri Bansal for his keen interest in developmental activities of various states as he is attending SLBC meetings of other states also. Before presenting the report card, Dr. Chakrabarty shared with the house the macro level developments, which took place since last SLBC meeting
IMPORTANT DEVELOPMENTS IN MACRO ECONOMIC SCENARIO
· RBI has kept Cash Reserve Ratio (7.50% -10.11.07), Bank Rate (6% - 29.4.2003), Reverse Repo Rate (6%-25.7.2006) and Repo Rate (7.75% - 31.3.2007) as unchanged.
§ RBI has advised continuance of providing production credit by banks up to the principal amount of Rs.3.00 lac @7% and to claim the subvention @2% from RBI (Rs.1600 crore for 2008-09).
· The projection of GDP for 2007-08 has been retained at 8.5%.
Dr.Chakrabarty further said that We have also witnessed presentation of Union Budget for 2008-09 by the Hon’ble Union Finance Minister. The important proposals concerning Banks were also mentioned by him:
Ø A Multi Sectoral Development Plan for each of 90 Minority Concentrated districts (Total Rs.3780 crore and for 2008-09 – Rs.540 crore).
Ø 256 branches opened up to December, 2007 this year in Minority districts and 288 more be opened by March, 2008.
Ø All women SHGs are to be covered under LIC’s Janashree Bima Yojana.
Ø Agri Credit target for 2008-09 has been fixed at Rs.2,80,000 crore.
Ø Irrigation and Water Resources Finance Corporation has been proposed. (initial capital of Rs.100 crore).
Ø National Agriculture Insurance Scheme will continue during 2008-09 also. (Rs.644 crore have been proposed).
Ø Agri Debt Waiver:
Agriculture loans by Scheduled Commercial Banks, Regional Rural Banks and Cooperative Banks disbursed up to 31.03.2007 and which have become overdue as on 31.12.2007 but not repaid up to 29.02.2008 are covered in respect of Small & Marginal Farmers with land holding up to two hectares.
Ø For other farmers, an OTS for overdue loans as on 31.12.2007 and remained unpaid up to 29.2.2008 – rebate of 25% is to be given and 75% is to be repaid by the farmers.
Ø Rescheduled/restructured loans are also eligible for waiver/OTS.
Ø The debt waiver exercise is to be completed by 30.06.2008. Thus all banks have to work very hard for the same, Dr.Chakrabarty said.
Ø The farmers covered under Debt Waiver/Relief will be eligible for fresh financing also.
Ø RIDF Trenche XIV – 2008-09 will be provided Rs.14000 crores.
Ø SME Risk Capital Fund in SIDBI : The guarantee fee is to be reduced from 1.5% to 1% and annual service fee from 0.75% to 0.50% for loans up to Rs.5 lac.
Ø Financial Inclusion : Recommendations:
- All Commercial Banks and RRBs are to add at least 250 rural Household accounts every year at each of Rural & Semi Urban branches.
- To allow individuals, such as retired bank officials/Ex-servicemen etc. to be appointed as Business Facilitator/Business Correspondents or Credit Counsellers.
- In fact, the Hon’ble Finance Minister has advised banking fraternity to embrace the concept of total Financial Inclusion, he said.
Ø DRI :
- A revised eligibility criterion has been proposed as suggested by SLBC Forum.
- Annual Family Income of Rs.18000/- (enhanced from Rs.6400/-) for Rural and
- Rs.24000/- (enhanced from Rs.7200/-) in Urban areas .
Ø Banking Cash Transaction Tax (BCTT) will be withdrawn w.e.f. 01.04.2009. Banker colleagues and bank customers will feel happier, Dr.Chakrabarty said.
He also shared his satisfaction that Haryana’s economy is growing at about 11.2% which is higher than that of the nation. In fact, higher economic growth is the mantra for finishing the poverty and he was happy to share that the State Government is following the same which induces enthusiasm amongst bankers and other partners like NABARD and different Government agencies in economic development.
Action taken on the Action Points of last SLBC held on 17.12.2007
FINANCIAL INCLUSION:
Ø During the 100th SLBC meeting held on 26.05.2007, the house had identified 16 districts for 100% Financial Inclusion. The Convener Bank and Syndicate Bank had further identified Gurgaon and Faridabad districts while LDMs of Sonepat and Sirsa volunteered to cover their districts also under this mission. Thus, no district of the State was left out of this noble mission.
Ø He, however, said that we are not declaring 100% financial inclusion of entire State and advised the banks and LDMs to make another attempt to achieve 100% financial inclusion.
Ø The efforts put in by the banks and Lead District Managers are not being undermined, he said.
Ø Dr.Chakrabarty said that all will agree with him that this was only a beginning, just by opening of accounts does not tantamount to complete Financial Inclusion. Now, we all have to go a step further for providing financial assistance to all the needy people so as to behold a smile on their faces too.
Ø He, therefore, requested the Banks and the Lead Districts Managers to take another three months, give an advertisement in local papers requesting the remaining households to open accounts with the banks. Keep the authentic record regarding 100% Financial Inclusion fully ready for reality check by RBI officials
Establishment of Financial Education and Credit Counselling Centre
The concept of Financial Literacy should be given due cognizance by member banks so that it percolates to the rural areas also. This will definitely narrow the gap created by IT revolution between urban and rural populace. He was happy that Convener Bank has already opened one Financial Education and Credit Counseling Centre at Yamuna Nagar. Today, we have opened one more such centre at Chandigarh which will also cater to the needs of District Panchkula of Haryana. Canara Bank and Syndicate Bank have also established one such Centre each at Naultha in Panipat and Nuh in Mewat District respectively.
He, however, suggested that performance of these centres be reviewed regularly in SLBC meetings. We should assess its efficacy and share the success of such centre with member banks to popularize this concept in other districts jointly or individually.
Review of Performance of Banks up to December, 2007
Ø He was happy to say that banking system in the State has achieved the National Goals in respect of Priority Sector, Agriculture Credit, CD Ratio and lending to Weaker Sections etc. for the period ended December, 2007.
Ø 140 new Branches of Commercial Banks and RRBs have been opened since December, 2006 raising the total number of branches to 1908. He expressed his pleasure to say that no Block of Haryana is unbanked. He suggested that problems in branch expansion, if any, be discussed. The agenda papers should also include the information regarding licenses in hand, progress in opening of rural branches particularly in minority concentrated districts.
Ø Total deposits increased from Rs.52222 crore as at December, 2006 to Rs. 65802 Crore up to December, 2007 showing a growth of 26%, which he rated as satisfactory.
Ø Total Advances during the period December, 06 to December, 07 have increased from Rs.33576 crore to Rs.42586 crore showing a growth of 26.83% which was again satisfactory.
Ø Priority Sector advances have increased from Rs.19915 crore as at December, 06 to Rs.24049 crore as at December, 07 showing a growth of 20.75%.
Ø Agriculture advances have increased from Rs.9676 crore as at December,06 to Rs.12476 crore as at December, 07 recording a growth of 28.93%.
Ø Advances to Micro & Small Enterprises have increased from Rs. 4129crore as at December, 06 to Rs.5388 crore up to December, 07 showing a growth of 30.49% which was quite satisfactory.
Ø Weaker Sector advances have increased from Rs.3034 crore as at December, 06 to Rs. 4192 crore as at December, 07 thereby showing an increase of Rs.1158 crore or 38.16% which he appreciated.
Ø Overall CD Ratio at State level including RIDF comes to 74%. However, he was happy to say that no district of Haryana has CD Ratio below 40% as at December, 2007.
Ø Performance of Banks Under SME: As against annual target of 20%, the Banks have registered a growth of 50.69% which he termed as quite satisfactory. The policy package stipulates Doubling of Credit to SME by 31.03.2010 but it was a matter of great satisfaction that Banks in Haryana have already surpassed the target much ahead of the target date. As per the annual target of 5 new units, per semi-urban/ urban branch, the pro-rata target comes to 3.75 Units whereas the Banks in Haryana have added 4.52 units during the period ended December, 2007.
Ø Performance under Annual Credit Plan- 2007-08
He was happy that performance of Banking system under prestigious Annual Credit Plan up to December, 2007 was quite good as the overall achievement was 109%.
Ø Performance of Banks under some important Government Sponsored Schemes
§ PMRY- 2006-07 : Banks have already achieved 105% of the target though the date was extended to 30.11.2007 for disbursement in milch animal cases.
§ PMRY- 2007-08: The %age achievement as at Dec., 07 was low at 45.43%. However, latest position up to 13.03.2008 show improvement as the achievement was 77.10% of disbursement vis-à-vis target. Since the financial year has already came to an end and PMRY as well as REGP Scheme are being merged into one scheme i.e. Prime Minister Employment Generation Programme (PMEGP), Banks should complete the disbursements on or before 31.05.2008 and achieve the annual target for the third consecutive year also, the Chairperson said.
§ Swarna Jayanti Sahari Rojgar Yojana (SJSRY) & Swarnajayanti Gram Swarozgar Yojana (SGSY) : The performance of Banks was satisfactory.
§ Self Help Groups (SHGs) : 25265 SHGs have been Saving-linked and 14953 credit-linked up to December, 2007. The percentage of Women groups at 68% is commendable. Micro financing has assumed greater importance and the role of banks has become even more demanding. There is a need to have close rapport with NGOs and other agencies including Social Welfare Agencies to help in formation and linkage of SHGs.
RECOVERY UNDER GOVERNMENT SPONSORED SCHEMES:
Ø The recovery position under Government Sponsored Schemes is, however, an area of concern:
PMRY : 49.46%
SGSY : 49.38%
SJSRY : 53.65%
SHG (under SGSY) : 78.72%
SHG (other than SGSY) : 77.91%
He requested all the Sponsoring Agencies/Government Departments to help the banks in improving their recovery position under Government schemes as low recovery has affected the recycling of public funds apart from giving rise to non-performing assets.
Ø Position Regarding Recovery Certificates:
§ 4684 Recovery Certificates amounting to Rs.53.94 crore were pending for disposal.
§ He showed his concern that 1417 cases amounting to Rs.7.85 crore are pending for more than 3 years. There is an urgent need to get this pendency cleared.
He expressed confidence that Government Departments and LDMs will bring the pendency of Recovery Certificates to almost Nil during current financial year 2008-09.