United Bank of India
Lead bank Division: Head Office
11, Hemanta Basu Sarani
Proceedings of the 97th Special SLBC Meeting for the State of Tripura held on May 19th 2010 at Agartala
At the instance of RBI a Special SLBC meeting was held at the Conference Hall of the State Guest House, Agartala on 19th May 2011 with a view to have focused discussion on certain important issues. The meeting was attended by Sri Manik Sarkar, Hon’ble Chief Minisrter of Tripura, Sri Badal Chowdhury, Hon’ble Finance Minister of Tripura, Dr D Subba Rao, Hon’ble Governor, Reserve Bank of India, Dr K C Chackraborty, Dy Governor, RBI, Dr. Shyamala Gopinath, Dy Governor, RBI, Shri Subir Gokarn, Dy Governor, Shri A Sinha, Dy Governor, RBI, Shri S K Panda, Chief Secretary, Govt. of Tripura, Shri Bhaskar Sen, CMD, United Bank of India, Shri A Krishna Kumar, Managing Director, State Bank of India, Smt Surekha Marandi, Regional Director, RBI, Guwahati, and other top executives of State Government, RBI, NABARD and participating commercial banks, Regional Rural Banks, Co-operative Banks and other dignitaries. A list of participants is enclosed.
At the outset Shri Manik Sarkar, Hon’ble Chief Minister of Tripura and Shri D Subba Rao inaugurated the website of SLBC, Tripura launched on the day for public visit. Thereafter, Shri Bhasker Sen, CMD, UBI welcomed all the participants to the meeting. Dr Subba Rao wanted the State Govt. representatives to present their observations first on the progress made by the banks in various sectors.
1. Responding to his request, Shri Manoj Kumar, Commissioner & Secretary, Finance Deptt., GOT apprised the house of the observations of the State Govt. through Power Point Presentation as under:
- CD ratio of the State though improved marginally from 30% as on 31.3.2010 to 33% as on 31.3.2011, it is still well below the national average of 73.6% and also below the average of North East (36%). CD ratio of RRB is better than Commercial Banks and Coop Bank.
- Aggressive credit plan is necessary for improvement of CD ratio. ACP has to be designed in such a manner so that the CD ratio shoots up to at least 40% by the end of 2011-2012.
- Banks have not been able to achieve the target of issuance of 65000 KCCs during the year under review and issued only 50290 KCCs. Average amount per KCC is also at a lower side. Physical Target for 2011-12 and 2012-13 should be 70000 and 75000 respectively plus backlog. MGNREGA Job Card holders should also be covered with KCC or GCC. 1.17 lac forest dwellers that have been given forest rights may be issued KCC involving an amount of Rs 440 crore.
- Performance under Mini Dairy Scheme is showing a declining trend and amount involved per case is also declining. NABARD and Banks should take proactive role to augment credit flow in this segment.
- Under Fishery scheme, performance under proposals sponsored by State Govt. has been dismal and wherever sanctioned, credit involvement has been found inadequate.
- Out of 52 centers identified by the State Government , 26 were identified for branch opening and remaining 26 centers were identified for coverage through BC model. Out of these, only 11 branches have so far been opened. UCO Bank and TGB are yet to open branches at Raishyabari and Challagang respectively. TGB & TSCB are scheduled to open branches in 13 remaining centers. Opening of 26 additional branches will solve the problem for the time being.
- The process of gradation and credit linkage of SHGs has to be speeded up by the banks.
- Quantum of loan disbursed to SGSY/ SHG is at a lower side, as the average credit limit allowed per SHG is Rs 1.54 lac only. Some of the branches are withholding the disbursed loan component in the SB A/C of the borrowers thereby exposing the borrowers to undue interest burden.
- Performance under SJSRY has also been unsatisfactory; disbursement per case should also be improved.
- Number of proposals disbursed under Swabalamban scheme has been low compared to the proposals sponsored.
- In some cases under PMEGP, only token amounts have been disbursed. Some banks are insisting on collateral security for proposals with credit limit up to Rs10.00 lac. Pvt. Banks are not entertaining proposals under PMEGP.
- TSCB should be allowed to become a member lending institution (MLI) of CGTMSE so that they can participate in PMEGP scheme.
- Performance of SIDBI is also at a lower side.
- Out of 8 operational LCS, BANK extension counter is available only in one center. Foreign exchange facility should also be extended in other seven centers to promote Trade with Bangladesh.
- Resifting of Pension Processing Center of State Bank of India from Guwahati to Agartala.
- Permitting TGB & TSCB to open Currency Chest Branches.
- Recapitalisation of TSCB and TGB.
2. In addition to the above issues, Shri Badal Chowdhury, Hon’ble Finance Minister of Tripura, gave his observations as under:
- RBI should ensure introduction of Clean Note Policy in Tripura to replace soiled and mutilated notes that are in circulation.
- Banks should open Note Exchange Counters in branches.
- Branches should be provided with double displaying note-counting machines.
- Banks are also to install forged note detecting machines so that customers / bank employees do not suffer loss.
- There should be easy access to Banking Ombudsman – It is to be ensured that the Pensioners are not harassed.
- People do not know the Banking Correspondents who should be replaced by Bank Employees. If branches are set up in these areas, banking services can be catered in 2 to 3 GPs.
Thereafter Dr Subbarao, Governor, RBI asked Shri Bhaskar Sen, CMD, UBI if it would be possible to raise the CD ratio of the State to 40% by the end of 31.3.2012. Shri Sen apprised the house that the outstanding credit of the State has improved from Rs 2491.03 crore as on 31.3.2010 to Rs 3136.82 crore as on 31.3.2011 at a growth rate of 26 % compared to 19% achieved during the corresponding period last year. CD ratio has also improved from 30% as on 31.3.2010 to 33% as on 31.3.2011. In the current year, target under ACP has been kept at Rs.1625.00 crore based on the PLP prepared by NABARD which is 33% higher over the previous years target. Considering the repayment factor, we may have to revise the target under ACP to a level that can achieve 40% CD Ratio at the end of the year. Shri Sen, However, expressed his hope that the banks will be able to achieve 40% CD Ratio by March 2012.
Shri A Krishna Kumar, Managing Director, SBI opined that as scope for large industrial advance is limited in the State, more focus on Agriculture advance could be of some help to increase CD ratio of the State.
Shri Prakash Bakshi, Executive Director, NABARD opined that credit flow to Agriculture sector should be increased as only 1/3rd area of the State is covered by organizational credit. Scale of finance can also be enhanced from the present level to boost up outstanding credit. For better flow of credit, JLGs may be formed so that the aggregated land holdings would be large enough to make finance viable for banks. He informed that NABARD extends support of Rs 2000/= per JLG.
Dr K C Chackraborty, Dy Governor, RBI observed that out of the 419 villages with population of over 2000, only 6 villages are identified to be covered under branch mode, which was too low to sustain BC operations in the State. More bank branches were needed in the State. The Governor advised the SLBC Convenor, in coordination with State Govt. Officials, commercial banks operating in the State and Reserve Bank of India, to draw up a plan to open 26 brick & mortar branches in the State before March 2012, in addition to the existing programmes. Tripura Gramin Bank (TGB) was also advised to revised its schedule for opening of the remaining three branches under the subvention scheme. TGB sought time up to December 2011 to open theses branches. However, as advised by CMD, UBI, TGB agreed to open these three branches by Sept. 2011. Dr. Chakraborty advised to open these branches directly in CBS mode with the support from the sponsoring bank. Ass regards the problem of Manpower in TGB, the sponsor bank agreed to provide all support, including staff, if necessary so as to complete opening of the three branches by September 2011. Alongwith brick & mortar branches, the BC model also need to be pushed in the State, as it may not be possible to have physical branches in all centres. Disbursement under KCC can also be made through the Business Correspondents.
Shri Kumar Alok, Commissioner & Secretary, RD & Panchayet Deptt., GOT informed the house that the Govt has entered into a MOU with TGB & TSCB for making payment under MGNREGA. through Business Correspondents. TGB has engaged 129 BCs and TSCBs has engaged 47 BCs(the issue of non- release of loan amount under SGSY/SHG as reiterated by Shri Alok Kumar has been mentioned in item 1. Viii earlier) . Shri Alok Kumar also alleged that Passbooks are not being issued to the SHGs; however, bankers present in the house presented a different view. The issue of withdrawal of Rs 1.32 lac from the subsidy account for SGSY in some branches of SBI without prior permission of the State Govt. was also discussed. Shri A Krishna Kumar, MD, SBI described the act as a mistake on the part of concerned Officials against whom the bank will initiate appropriate action. There is no reason to assume that the act was committed willfully with an ill motive to defalcate money or to derive any undue benefit.
Shri S K Panda, Chief Secretary, GOT informed the house that in the nineties a good number of branches were shifted from its original location on the ground of disturbed law and order situation, which has improved substantially. In some of these centers new branches have been opened but there are centers, which are still unbanked.
Dr Subba Rao requested the Regional Director to comment on the issue of quality of currency note. Ms Surekha Marandi, CGM, RBI, Guwahati, pointed out that there were some hurdles in smooth movement of treasure/lifting of soiled notes in the North Eastern Sates, particularly in arrangement of security when treasure has to move from one State to another. While the possibility of using special aircrafts of the Postal Department for this purpose is being explored, arrangement of adequate security to accompany the remittance will remain a requirement. The State Government assured to provide security for each remittances.
Dr Subba Rao stressed the need to enhance financial awareness levels to improve credit absorption capacity in the State and requested all the commercial banks to conduct financial literacy and awareness campaign across the State and cover atleast 40 villages (one village per block) during the year March 2012.
Shri S K Panda, Chief Secretary, Tripura. opined that there is a vibrant Panchayati Raj system in Tripura which can be of great help in organizing such programme.
Shri Manik Sarkar, Hon’ble Chief Minister of Tripura should take the initiative for conducting awareness and literacy drive and assured the house that the State Govt. will provide all necessary assistance that will be needed to organize such programme. He requested RBI to arrange financial literacy materials translated in to Bengali. Ms Marandi assured him that such literatures could be procured from RBI Kolkata and will be provided in the curriculum.
In respect to various other issues raised by the State Government representative, Dr. K. C. Chakraborty informed the house that the branches having cash transaction of rs.50.00 lac per day are required to necessarily have fake note detecting machines. As regards note counting machines (NCM), it was pointed out that the NCMs in use have a dual display, which is visible to the customers as well.
Governor, Dr Subba Rao summed up the proceedings as under:
- CD ratio of the State has to be improved to 40% by the end of March 2012.
- Annual Credit Plan of the State for the year 2011-12 has to be revised upwards to achieve the above CD Ratio. Expected recovery has to be factored into its preparation.
- 26 additional Brick & Mortar branches have to be opened in the State by March 2012 in addition to existing measures for the opening of such physical branches.
- Tripura Gramin Bank will revise its schedule for opening of the remaining 3 branches allotted to it under the subvention scheme so as to complete the same by September 2011.
- For clean note policy, the feasibility of airlifting soiled notes from Tripura has to be examined.
- SBI and UBI will coordinate financial literacy cum awareness drive in all blocks across the State.
- Financial literacy as part of school curriculum could be considered.
The following major action points emerged in the meeting:
- CD ratio to be improved to at least 40% by the end of the year: To achieve this goal, targets set under ACP –2011-12 has to be revised upwards in consultation with NABARD so that CD ratio of 40% is achieved. Amount of recovery that may be made during the year should also be considered while finalizing the revised target under ACP. Recasting of ACP is to be completed by 10th June, 2011. (Action: Banks, LDMs and Govt. Deptts.)
- Spreading awareness on Financial Inclusion: Such awareness programmes in remote areas are also to be undertaken to promote Financial literacy amongst the people at large. In addition to SBI, UBI, TGB, other banks should also be encouraged to organize such programme. Assistance of State Government should be sought for organizing such programmes successfully. All the 40 Blocks in the State have to be covered within 31.03.2012. Preparation of road map is to be finalized by 10th June, 2011. (Action: Banks, LDMs and Govt. Deptts.)
- Financial literacy as part of school curriculam: State Government may consider introducing financial literacy as part of school curriculam. A copy of the sample financial literacy material in Bengali will be made available to the Tripura Government by the Reserve Bank. (Action: State Govt and RBI)
- Opening of 26 branches: A survey will be completed at the earliest & the same should be placed before the meeting where RBI, NABARD, State Govt. & other bankers will remain present for discussion & the entire process of allocation should be completed before 10th June 2011 where branches could be opened. (Action: Banks, LDMs and Govt. Deptts.)
- RBI Subvention Scheme: Tripura Gramin Bank to revise its schedule for opening of the remaining three branches under the Subvention Scheme and the sponsor Banks is to provide all support, including staff, iff necessary so as to complete the same by September 2011. (Action: Tripura Gramin Bank, UBI.)
- Clean Note Policy: To ensure supply of clean notes in the State of Tripura and on the assurance that security personnel will be provided by Tripura Government for movement of cash to and from Guwahati, the feasibility of airlifting soiled notes from Tripura to be ascertained by RBI, Guwahati. (Action: State Govt. & RBI)
- Disbursement of Loan and Subsidy Component under SGSY scheme. As it has been placed that banks are withholding disbursement of loan component under the scheme in the SB A/Cs of the SHGs, all member banks are requested not to resort to such practice as alleged, and arrange prompt release of fund so as to avoid interest burden on un disbursed loan amount. (Action: Banks, LDMs )
- Issuance of Passbooks to SHGs: All banks are requested to issue Passbooks in all SHG A/cs. at the earliest, if not issued by now. (Action: Banks)
- Disposal of pending proposals under Govt. Sponsored Schemes: All member banks are requested to dispose of all pending proposals on merit. (Action: Banks and LDMs)
- Disposal of pending proposals under Mini Dairy/ Fisheries Scheme: Performance of the banks under these two activities are far from satisfactory and large number of proposals, sponsored by State Government which are pending with the banks has also to be disposed immediately by all banks on merit. (Action: Banks and LDMs)
- Emphasis on financing Agriculture and allied activities, Horticultural projects, Forestry, Fishery, Dairy etc will continue. The line Deptts will sponsor adequate number of such proposals duly filled in to the banks. NABARD to head a committee which will formulate the modalities of purchasing cattle from the State of Assam. (Action: Banks, LDMs and Govt. Deptts.)
- During the year 2011-12, at least 85000 fresh KCCs are to be issued. Agril. Term Loans and consumption loans to farmers are also to be routed through KCCs. The Govt Deptts will ensure rectification of the defects in the KCC proposals sponsored to the banks with details of Dag /Khatian no. etc. issued by VLWs. Bankers will also scout new proposals on their own. (Action: Banks and LDMs and Govt. Deptts)
- Gradation of SHGs, wherever pending, are to be completed so as to enable the eligible group to receive Bank Credit also. SHGs already deposit linked but not yet credit linked are to be linked up with credit in all eligible cases on continuing basis. (Action: Banks and LDMs)
- No collateral security is to be insisted upon for granting credit limits under MSE up to Rs 10.00 lacs. All eligible MSE proposals including under PMEGP and Swabalamban scheme, will be covered under CGTMSE scheme. (Action: Banks & LDMs)
Vote of Thanks:
Thereafter, Shri Pranab Kumar Roy, General Manager (Prisec & FI), United Bank of India, while giving vote of thanks described the Special SLBC meeting as a landmark in the history of SLBC ( Tripura) as the representation from the State Government and Reserve Bank of India both are at the highest level which has never happened in the past. The banking community has been immensely benefited from the deliberations of Shri Manik Sarkar, Hon’ble Chief Minister of Tripura, Shri Badal Chowdhury, Hon’ble Finance Minister of Tripura, Dr D Subba Rao, Hon’ble Governor, Reserve Bank of India, Dr K C Chackraborty, Dy Governor, RBI, Shri Bhaskar Sen, Chairman & Managing Director, United Bank of India, Shri S K Panda, Chief Secretary, Govt. of Tripura, Shri A Krishna Kumar Managing Director, State Bank of India, and Smt Surekha Marandi, Regional Director, RBI, Guwahati and other top executives from State Government, RBI, NABARD and banks. The banking fraternity of the State will render all possible efforts to act in accordance with the decisions taken in the meeting with special emphasis on Financial Inclusion. He also extended sincere thanks to all the dignitaries / participants who have made the meeting purposeful and led it to a grand success.
- To review the assistance required and provided by Govt. agencies.
- To oversee the implementation of branch expansion programme.
- To review the recovery performance.
- To consider problems referred by the district level forums and take necessary follow-up action.
- To solve operational problems in implementation of Service Area Approach, Credit Plans, Govt. and other agencies programmes etc.