Minutes of 169 th Meeting of SLBC of Andhra Pradesh

Transcription

1 Minutes of 169 th Meeting of SLBC of Andhra Pradesh ( Special Focus on Financial Inclusion, Banking outlets through Business Correspondents & Implementation of Prime Minister's 15 Point Programme for Welfare of Minorities ) Date : Venue : Jubilee Hall, Public Gardens Hyderabad STATE LEVEL BANKER S COMMITTEE OF A.P CONVENOR:: ANDHRA BANK H O, Andhra Bank, Dr. Pattabhi Bhavan, Saifabad, Hyderabad Phone : (D) Extn :2375, 2387 Fax : slbc@andhrabank.co.in

2 169th Meeting of the SLBC of Andhra Pradesh was conducted on at Jubilee Hall, Public Gardens, Hyderabad at 5.00 p.m. Shri Y Prasad, Convenor, SLBC of Andhra Pradesh welcomed Honorable Chief Minister of Andhra Pradesh, Dr K Rosaiah, Honorable Ministers, respected Chief Secretary, Principal Secretaries of Finance, Agriculture and Rural Development Departments, Dr N Krishna Mohan, Regional Director of RBI, and colleagues from Banking fraternity, Government officials and other Ladies and Gentlemen on behalf of SLBC of Andhra Pradesh to the 169th Meeting of SLBC. Shri R S Reddy, Chairman & Managing Director, Andhra Bank & President, SLBC of Andhra Pradesh, in his presidential address informed that - The meeting is being conducted with a Special Focus on Financial Inclusion and Implementation of Prime Minister's 15 Point Program for the Welfare of the Minority Communities. Several measures were initiated for improving the Banking Services in the state of Andhra Pradesh. Out of 1128 Mandals, FOUR Mandals are not having any bank branches. Steps are on to open branches in all these FOUR Unbanked Mandals by the end of March The President has emphasized the need for implementation of Financial Inclusion plan for extending Banking services in the villages of population over 2000 as per the Reserve Bank of India directions. With regard to the Financial Inclusion plan, commendable job has been done by the LDMs, District wise lists of villages allocated to individual banks have been sent to all the Banks. All LDMs were requested to ensure that the Sub- Committees meet every month and review the progress. Requested the State Government to support the banks to complete the task before March Our State is doing well in the SHG Bank linkage programme and occupied No.1 position in the country covering about 10 lakh groups with an outstanding amount of Rs.11,000 crore which is almost 50% of all India performance. However recovery has been slightly low in recent time and requested the Government to extend their support to banks for improving recovery in this area. Further the President informed that there are also some instances, especially in the district of Ananthapur, where SHG members are taking law into their hands to redress their grievances. There is an urgent need to correct this situation before it goes out of hand. Banks to give thrust for implementing Prime Minister's 15 Point Program for the Welfare of Minority Communities and there is need to step up lending to achieve mandate 15% target by the end of March, Finance to Agriculture Sector has crossed Rs.62,000 crore in the State which is the highest in the country. In the Khariff lending banks have surpassed the target and for the Rabi Crop Loan lending is at Rs.5178 crore against the target of 9400 crores as per the indicative figures i.e, achievement of 55%. Banks were requested to achieve the task before March, Farmers were not coming forward for re-schedulement of loans and all banks were appealed to take steps to ensure that no affected farmer is deprived of the benefit considering the sufferings of the farming community due to drought and floods. 2

3 Banks are facing field level problems with regard to financing Tenant Farmers and stated that in the recent meeting of the Lead Banks, it was agreed to extend finance to the tenant farmers under community based sustainable agriculture programme of the government. President, SLBC of AP has highlighted the major issue concerning the agriculture sector, i.e., existence of fake Pattadar Pass Books in the system and requested the Government to ensure that soft copies of updated land records are handed over to the banks immediately so that the Khariff 2010 lending is not hampered. President thanked the Government for the immediate steps initiated. President, SLBC of AP stated that steps were initiated for upscaling the operations and extending other banking services through implementation of Smart Card Project. President further stated that Andhra Bank has introduced a Pilot Smart Card Scheme exclusively to SHGs in select branches and planning to extend to all potential branches. He hoped that Banks would have piloted the project. In Andhra Pradesh State 21 RSETIs are functioning and one State Level Banker's Institute at Hyderabad is established in association with NABARD and State Government, for the skill development of Rural Poor. President, SLBC of AP placed on record the success of Andhra Pradesh in implementation of SHG Bank Linkage Programme and Pavali Vaddi scheme which has enabled many SHGs and other weaker section of the communities to stand on their own. Due to this the borrowings from money lenders have come down significantly and higher interest rates have also come down drastically Finally President, SLBC of AP stated that still a lot more is to be done by the Banking system as the magnitude of the poverty is high in the backward Districts of the State. On behalf of entire colleague bankers, President assured the Government that Banks in Andhra Pradesh will continue to actively participate in all the endeavors of the Government for improving the quality of life, of all categories of people in the State. Hon'ble Chief Minister of Andhra Pradesh Dr K Rosaiah delivered key note address to the gathering on this occasion. Hon'ble Chief Minister felt that he was glad to address on a review of the performance under the Annual Credit Plan with a Special Focus on `Financial Inclusion' and Implementation of Prime Minister's 15 Point Programme for Welfare of Minorities. Financial Inclusion Hon'ble Chief Minister said, Basic Banking facilities were to be provided to the villages having population of over 2000 by March This objective will be met by opening no-frills accounts, providing minimum credit needs to the beneficiary besides insurance and other banking services. As a part of Financial Inclusion, Smart Card Scheme is under implementation in 22 Districts of the State excluding Hyderabad Metro. Payments under NREGS and Social Security Pensions are being routed through the smart card in order to avoid delays and to have transparency in the transactions. About 1/3rd of the eligible beneficiaries have been issued smart cards (about 60 lakhs) and requested banks to issue remaining smart cards quickly to reach the levels of saturation in their allotted areas for routing payments under NREGS & SSP. 3

4 PM's 15 Point Programme for welfare of Minorities Hon'ble Chief Minister said that under the Prime Minister's 15 Point Programme for Welfare of Minorities, AP State Government is implementing several welfare schemes like improving access to school education, scholarships for minority students and focused that banks have to concentrate on two main issues, Opening of Bank Branches at Minorities Concentrated Places and comply with the Government of India directive that all banks should step up their lendings to minorities under priority sector to 15% in a period of 3 years ending GOI has identified 19 towns as Minority Concentrated towns in the state and it is observed that the share of minorities in Priority Sector advances of banks in the state is just 6.41% as at the end of December SLBC has been advised to pursue seriously in this regard and expressed that reaching the target of 15% lending by March 2010 appeared to be a difficult task. Hon'ble Chief Minister advised SLBC to fix financial targets under various Government Sponsored Schemes to provide Self Employment and Wage Employment for the poorer sections of minorities. Technical training is to be provided to them for up gradation of their skills. Agriculture Hon'ble Chief Minister observed that during the year 2009 our State witnessed unprecedented vagaries of nature resulting in undue hardship to the people in general and farmers in particular, while drought affected 89% mandals of the State. The effect of floods was equally devastating though it has hit only 5 Districts. Hon'ble Chief Minister recalled the special SLBC meeting held on wherein it was resolved to implement the guidelines of RBI in the conversion of crop loans / reschedulement of the term loans of the farmers and providing special packages towards rehabilitation of other affected people. Hon'ble Chief Minister placed on record that the banks have exceeded the target of Rs.14,100 crores under Kharif 2009 and expressed satisfaction on the performance of the banks. With regard to Rabi lending, conversion of crop loans and reschedulement of terms loans, banks have to sort out field level issues and pass on instructions to their branches to ensure that RBI guidelines in this regard are strictly complied with and a certificate to that effect is obtained from each branch by Financing Tenant Farmers Hon'ble Chief Minister expressed concern that the issue of providing finance to tenant farmers is bothering Government the most and this appears to be not picking up on the expected lines. Advised banks to coordinate with the officials of Agriculture Department and find out a solution to this problem so that their credit needs are met in a hassle free manner. Annual State Credit Plan Hon'ble Chief Minister stated that the Government has set ambitious target of Rs.55,500 crores against which the achievement as at the end of December is Rs.38,759/- crores, which is 69% only and advised Banks to work hard to fulfill their commitment by to achieve 100% targets. Hon'ble Chief Minister appealed to Banks and SLBC to implement the welfare schemes particularly benefiting SC/ST/BC and Minority Communities and not to disappoint the Chief Minister in maintaining the tradition of surpassing the targets of the Annual Credit Plan. 4

5 SHG lendings Hon'ble Chief Minister noticed that the disbursements under SHG linkage was very slow and the achievement was only 57%. The under performance in respect of SHG financing would adversely affect the Indiramma Housing Programme. Banks as well as SERP were requested to analyse the reasons for such low performance and take suitable steps to accelerate the progress in achieving the target of SHG lendings. Indiramma Housing Hon'ble Chief Minister stated that though sanctions under Indiramma Rural Housing were encouraging, it was not so, under the Indiramma Urban Housing Scheme. Hon'ble Chief Minister requested banks to come forward to help the urban poor by sanctioning loans upto Rs.30,000/- for each beneficiary and extend the benefits of interest subsidy of 5% provided under ISHUP Scheme. Department of Agriculture has supplied a list of 4.32 lakhs tenant farmers of which 1.33 lakh tenant farmers were given crop loans covering Rs crores Hon'ble Chief Minister in his concluding remarks stated that during the Khariff season Rs.14,100 crores was the target against which 14, crores was disbursed amounting to 102%. Now the Rabi lending is only 64% and requires gearing up to achieve 100% before Hon ble Chief Minister urged upon all the bankers to sanction the crop loans for Rabi season for the year and achieve the targets within three weeks time. With regard to SHGs' as against the target of 9000 crore, the overall achievement is Rs crores (57%) given to 3,29,545 SHGs as on Out of this General Bank Linkage is 2,68,318 SHGs Rs crores, TFI 34,686 SHGs Rs crores, Bridge Loans 45,684 SHGs, Rs crores. The Micro credit plans of about SHGs to the tune of Rs.2702 crores are pending with various bank branches for grounding during March MCPs for 10,644 SHGs for Rs crores are pending grounding in the flood affected villages of Mahaboobnagar, Kurnool, Guntur and Krishna Districts. Bankers are requested to ground all the pending MCPs before Instructions were issued to IKP staff to help bankers in 100% recovery. Hon ble Chief Minister congratulated the banks on their performance in the Khariff season and once again requested all the bankers to reach 100% Agricultural short term credit target and 100% SHG, banking services to expand to rural areas by tackling the problems and stated that the Government will fully support the banks. Hon'ble Chief Minister appealed to operationalise the Financial Inclusion, first state in the country with all efforts and that the banking services will be developed in every village and every household in the village should be included in the Financial Inclusion. The Government will continue to extend support in this aspect and find solutions for the problems. Dr N Krishna Mohan, Regional Director, Reserve Bank of India said that the focus of this SLBC is on Financial Inclusion and Implementation of Prime Minister s 15 Point Programme for the Welfare of Minorities. The Banking industry in India consists of 27 public sector banks, 7 new private sector banks, 15 old private sector banks and 31 foreign banks in addition to cooperative banks. The total number of branch network is 5

6 approximately 80,000. In spite of such a huge network, only 5% of our villages are having bank branches. Out of 6 lakh villages, bank branches are there in 30,000 villages only. A study has pointed out that only 40% of the population in the country has bank accounts. People having life insurance cover only 10%. People with non-life insurance cover are only 0.6%. People having credit cards and debit cards, their percentages are 2% and 13% respectively. It is also revealed in the study that out of the 90 million farmer households, 51% of the farmers do not avail any credit facilities either from the institutional sources or non-institutional sources. The above statistics underscores the importance of financial inclusion for sustainable and equitable growth in the country. In our State there are 9,517 villages with population of over 2,000/-. In respect of 2818 villages there are banking services available. In the remaining 6699 villages, banking services are required to be made available by March Road Map for achieving the objectives has to be submitted by banks to RBI by March Dr N Krishna Mohan stated that SLBC plays a very important role in the development at State level. In view of the large membership of SLBC, sub-committees are to be constituted for specific tasks. The sub-committees may be mandated to examine the specific issues in depth and devise solutions and recommendations for consideration of the SLBC. It was proposed to have a one day sensitization work shop at State Level in the months of either April or May every year. Our state is fortunate in having several institutions and academicians engaged in research and studies that have implications for sustainable development in agriculture and MSME sector. Associating research institutions and academicians with SLBC needs to be considered so that they bring with them new ideas. Therefore such experts should also be invited as special invitees to the SLBC. Dr N Krishna Mohan observed that the NGOs are playing a greater role in facilitating credit flow to the low income households. In the years to come, the role of corporate houses is also going to increase. Therefore, the banks linkage with such NGOs and corporate houses which are providing credit plus services can be captured as a success story. All these success stories could be presented in SLBC which serve as model that could be replicated. A monitoring mechanism has to be put in place to periodically assess and evaluate the progress made in achieving the road map to provide banking services within the time frame prescribed. For this purpose, unbanked and under banked areas have to be identified for providing banking services in a time bound manner with a view to achieve 100% financial inclusion. Immediate identification of specific issues inhibiting IT enable financial inclusion has to be done so that prompt corrective action can be taken. Dr N Krishna Mohan suggested the following issues in addition to the above action points which require careful monitoring Flow of credit to priority sector and weaker sections of the society. Assessment under Government Sponsored Schemes. Grant of educational loans Progress under SHG bank linkage MSME financing and bottlenecks etc. 6

7 Dr N Krishna Mohan suggested that the private sector banks should involve more actively by bringing in their expertise in IT. The Private sector banks should closely involve in Lead Bank Scheme while drawing up and implementing the various credit plays. Staff at the operational level of the banks and Government agencies associated with the implementation need to be aware of the latest developments. The SLBC may take initiatives in arranging staff sensitizing training Program at periodical intervals on an on going basis. Dr N Krishna Mohan insisted that there is an imperative need to accelerate flow of credit to the micro and small enterprises which is very critical for inclusive and equitable growth and larger economic empowerment. In order to address the above issues, there is need to strengthen the various fora under the Lead Bank Scheme. On behalf of the Reserve Bank of India Dr. N Krishna Mohan, Regional Director, assured the State Government, Banks, various agencies involved in the development that full support and cooperation would be extended for achieving the above objectives and ensuring the development of the State. Sri.Anil Girotra Executive Director Andhra Bank addressed the house on Financial Inclusion Plan (FIP) to be prepared by the Banks and given a power point presentation. Executive Director said as per Government of India directives, Banking outlets are to be provided in the villages with the population of 2000 and above by all banks by the end of March, These banks are need not be Brick and Mortar. These bank branches can be established by implementing any of the ICT + Business Correspondent (BC) Models. Executive Director said all the Banks and Lead District Managers are to prepare a Road Map for the year These Road Maps are to be approved in their respective Bank boards before 15 th of March, 2010 and are to be submitted to Reserve Bank of India. The above plan of action is to be implemented by March, Sri Anil Girotra informed the house that Andhra Pradesh State is having 27,597 villages of which 9517 villages are having a population of 2000 and above. Of this 2818 villages are already covered with Bank Branches. The other villages are 6699 villages where banking facilities are to be established. All these villages were allotted in the Sub Committee Meetings constituted for this purposed and duly passed in the DCC. SLBC of AP collected the information from all the districts and finalised the lists Bank wise which were sent to respective Banks. Executive Director clarified the Role of Banks and suggested the plan of implementation. Banks are to be ready with Road Map by March, Banks to put in place Service Providers and Business Correspondents by June, Banks should commence the enrollment of the accounts by July Executive Director informed that the transaction Flow is different from the NREGP payments. All the Savings Bank accounts 7

8 should have inbuilt over draft facility to the enrolled members. Kisan Credit Card (KCC) facility is to be extended to all the farmers in the village. Remittance arrangement of Small amounts can also be taken up. The other products like Insurance and Recurring Deposits can also be added up. All the households are to be covered by the end of March, No frills accounts to be opened by adopting simplified KYC norms. Sri Anil Girotra reiterated that the Sub Committee of the DCC should monitor the implementation of Financial Inclusion Plan. In some cases as per the necessity some of the villages may be re-allocated by the Sub Committee in the DCCS. In case of nonviable propositions, the villages may be re-allotted to other Banks by the Sub-Committee of DCCs. Sri Anil Girotra informed the house that the State Government and Government machinery will play a major role by giving assistance for implementation of this scheme like Publicity for the proposed Banking facilities in these villages; providing necessary infrastructure for the Banking outlets in the villages; Awareness Creation Financial Education of Rural People and assistance of Government agencies in enrollment process and providing land records for enabling them to avail KCCs. Credit shall be the main component of Financial Inclusion. Providing suitable technology solution to comply with the specified standards by the Service Providers is very important task for the Banks. Banks are to make due diligence in appointing Business Correspondents within the villages. A proper training is to be provided for Customer Service Provider (CSP). ABOVE ALL CUSTOMER SATISFACTION IS THE UTLIMATE GOAL. Sri R S Reddy, President, SLBC of Andhra Pradesh in response to Hon'ble Chief Minister's address provided the latest information with regard to achievement of banks in the Agriculture Sector. President stated that the crop loans disbursed was 86.84% as on February, 2010 against 76% in December Achievement under Khariff was at 102% against the target of Rs.14,100 crores. The disbursement for the Rabi crop was 82.83% as at February 2010 as against 64% in December Agriculture Term Loans was 82.30% in February 2010 as against 79.35% in December Disbursement for Allied Activities was achieved at 92% in February 2010 as against 89% in December Total Agriculture credit was 78.73% in December, 2009 is increased to 87.15% in February, With regard to Non Farm credit in December 2009, 60.69% was increased to 66.70% in February Other Priority Sector has also shown improvement from 55% in December 2009 to 65% in February With this the total Agricultural Credit increased from 69.84% in December 2009 to upto February 2010 and the President expressed confidence to achieve the target by the end of March Smt Rachel Chatterjee, IAS, Special Chief Secretary to Government, Agriculture Department remarked that the crop loans clubbing together Rabi and Kharif, only 64% is achieved and Rs.20,000 crores more credit is to be disbursed before March

9 Smt Rachel Chatterjee urged upon the Bankers to issue necessary instructions for achieving the targets for Rabi lending. Sri R Subrahmanyam, IAS, Principal Secretary, Rural Department stated that the Smart Card Project is being done on war footing and stated that by the end of , 75% of the villages will be brought under Biometric Smart Cards through CSDs and the balance 25% is proportionately allotted to State Bank of Hyderabad, Syndicate Bank and Andhra Bank to cover these Districts. If these Banks review the position and gear up, 100% biometric Smart Cards target can be achieved by July The Principal Secretary further stated that Government of Andhra Pradesh has taken the lead to organize camps in this regard. As a part of Women Empowerment, the State Government has decided to sanction Rs.20,000 to each CSP as total grant for purchase of POS device where SHGs are appointed as CSPs. Shri Anil Girotra, Executive Director, Andhra Bank said that all the people in the villages are covered with Smart cards for payment of NREGP and Social security payments. Role has been given to LDMs to complete the target of 100%. ED observed that some kind of publicity material is required in the villages to educate them which will develop their economic personality and this will help to open the accounts. ED requested the Revenue Department of the Government to provide the list of farmers in that village through Gram Panchayat records and play service provider role. Hon'ble Minister for Rural Development Shri V Vasanth Kumar observed that implementation of the Financial Inclusion plan in a phased manner is a welcome measure and that the state would definitely reach the 100% target by March Hon'ble Minister stated that the SHGs in the state would be saturated and the Smart Card project commencing from April could not be completed. Hon'ble Minister requested SLBC to coordinate and focus in this direction to reach saturation in these two categories. To achieve the Total Financial Inclusion as per the SLBC guidelines, each branch is taking up two villages every year. This will take long time to cover all the villages, so from onwards plan of action to be drawn to cover more number of villages to cover TFI for all the villages so that complete saturation can be achieved within three years. Hon'ble Minister stated that the Government did not want any leakage and each rupee should be transferred to the poor. Shri N K Prasad, Managing Director, Andhra Pradesh State Housing Corporation Ltd., informed the house that the Corporation has completed opening of 7 lakh bank accounts to the beneficiaries of the Housing Scheme and stated that services can be provided to 10 lakh beneficiaries in case the remaining accounts are opened. MD stated that unless banks open the accounts, the funds cannot be disbursed as the scheme is only through bank accounts. MD informed that the Corporation is ready to provide the data available Gram Panchayat wise for the Financial Inclusion plan and the MD offered assistance for filling up of the applications for the opening of the accounts. 9

10 Hon ble Minister for Social Welfare Sri Balaraju stated that in the tribal areas, banking services are much required and that there were some Mandals without banks. This point also may be looked into and Hon ble Chief Minister may advise the Bankers suitably. Hon'ble Minister further stated that in some of the Districts some of the Mandals are not having bank branches due to which people are not getting due share of banking facilities. Hon'ble Minister further stated that in Visakhapatnam District, UCO Bank, SBI and Indian Bank have closed their branches in some of the places and the Pattadar Pass Books of the borrowers of these places were not yet handed over to the beneficiaries. Hon'ble Minister requested for opening of branches at these places and requested SLBC to focus on this issue. Hon ble Minister for Housing Shri Silpa Mohan Reddy stated that the Banks were not coming forward for opening of individual accounts for the Housing Corporation beneficiaries. Hon'ble Minister also mentioned that individual accounts should be opened by banks for giving cheques to the housing beneficiaries and specially village based accounts due to which the disbursement in this category is pending. Hon'ble Minister further stated that the Bridge Loans in the First Phase to SC/ST beneficiaries in the rural areas at Rs.20,000 and urban area at Rs.34,250 were disbursed and the II phase was also disbursed. To ensure total disbursements under the scheme, the Hon ble Minister sought cooperation of all the Bankers. Hon'ble Minister informed that a decision was taken in the Vijayawada Municipal Corporation that the interest portion of the Vambay Housing Scheme may be waived off for repayment of these loans. Basing on the resolution the Hon'ble Minister requested to implement OTS scheme, specially for these beneficiaries who were ready to repay the loan in full. With regard to ISHUP scheme, banks are advised to send their proposals for RGK schemes. In Kurnool, Mahaboobnagar, flood affected Districts; NGOs are adopting villages for overall development and reconstruction of the villages. In such a way bank s branches are also requested to adopt one or two villages for each branch to help in this manner. Smt Renu Challu, Managing Director, State Bank of Hyderabad stated that SBH achieved 50% target on priority sector and 66% with regard to Rabi lending. The total achievement as per the Action Plan is 85% for this year and 75% in all the Districts, 91% with regard to annual action plan with regard to SHGs. MD, SBH has assured that the balance of the targets would be achieved by the end of March MD, SBH expressed confidence in achieving targets under all categories of finance. Shri Shiv Kumar, Chief General Manager, State Bank of India stated that they have issued 18 lakhs Smart Cards and put in operation. SBI has got 1100 branches in state of which 700 branches are in the rural and semi urban areas. SBI has decided to open 100 new branches in the first quarter of the next financial year CGM also informed that their bank is specially recruiting 2000 Rural POs for Rural 2000 Financial Inclusion Plan. Their bank is covering 15 to 20% in rural area and the Bank s CD Ration is 108%. Achievement under agriculture lending is 93% of their target. SBI has got 97,764 SHG groups amounting to Rs.1296 crores. Lending to SHGs doubled in 3 years. 10

11 SBI achieved crop loans of 93% by February end. SBI is confident to complete the Financial Inclusion plan as per the Road Map. Shri K V Raghavulu, Chief General Manager, NABARD informed the house to look into the issue of farmers not being covered under Loan Waiver Scheme of Government of India. A Task Force Committee has been formed under the Chairmanship of Shri U C Sarangi, IAS, Chairman of NABARD. The task force has formed four sub-groups to look into the issues of farmers of different regions. The Southern Regional Group of Task Force which is headed by Ms.Shashi.R.Rajagopalan (Board of Director in RBI & NABARD) along with other members and Shri K V Raghavulu, Chief General Manager, APRO, NABARD visited a few villages viz., Enabhavi Village (Lingala Ghanpur Mandal), Chagallu village (Ghanpur Mandal) and Dharmarajupalli village (Huzurabad Mandal) in Warangal District which are covered under Community Managed Sustainable Agriculture development (CMSA). The Committee was impressed by the performance of the farmers in these villages. These farmers who are following IPM model, with less cost were able to get good income compared to farmers using fertilizers and pesticides. It is suggested that the farmers covered under CMSA may be provided loans on the lines of MCP i.e., Rs.5 lacs to those group of farmers under 2 nd dose of loans and Rs.10 lacs to those group of farmers under 3 rd dose of loans. CGM, NABARD indicated that NABARD provided Rs.3442 crore as refinance to Banks under Long Term Loans and Rs.15oo crore under Crop Loans as refinance to RRBs and Cooperative Banks. CGM, NABARD expressed that a lot has been done by the Cooperative Banks and Regional Rural Banks along with Nationalised Banks. CGM stated that Rs.800 crores were disbursed as crop loans. Long term credit first time Rs crores to Banks financed in state of which Rs.3000 crores were disbursed by Cooperative Banks and Rs.1600 crores were disbursed by RRBs. At large, NABARD targeted the Financial Inclusion plan of 82 crores under Smart Cards project. An amount of Rs.3.55 crores were released to APGVB under FITF for upgrading the technology of the bank. CGM requested other banks to avail the facility. CGM informed that the Government appointed a committee under the Chairmanship of NABARD and study conducted on Rural Finance of which bank finance is only 34% and still borrowings from money lenders is 66%. It needs to be addressed immediately. CGM stated that in the Financial Inclusion plan 4000 villages should be covered. CGM stated that banks have covered 2-3 lakhs JLGs against 28 lakhs JLGs existing in the state. CGM also stated that conversion of crop loans was done by the Cooperative Banks. Shri Y Prasad, Convenor, SLBC of Andhra Pradesh has taken up the Agenda item-wise, for discussion. 11

12 Smt.K Sunitha. IAS, Mission Director, MEPMA focused the following issues: 1. SHG Bank Linkage Upward revision of linkage dosages Doses Existing Proposed 1 st Dose 0.50 Lakhs 1.00 Lakhs 2 nd Dose 1.50 Lakhs 2.50 Lakhs 3 rd Dose onward on MCP 5.00 Lakhs 7.50 Lakhs (Maximum) 2. The upper limit of Rs.5.00 lakhs per SHG may be enhanced to Rs.7.50 lakhs without collateral security. 3. Introducing revolving credit In place of existing term loan system, revolving/cash credit system may be introduced to Self Help Groups to enable them to draw unutilized balance for sanction of certain emergency loans to their members or to draw the amount which was rapaid earlier but within the limits set for the group by the banks. 4. Opening of Dedicated Branches for Micro Finance by all the Banks So far Indian Bank and Canara Bank opened dedicated branches for financing exclusively to SHGs in the towns of Hyderabad, Tirupati and Vijayawada. State Bank of India and State Bank of Hyderabad are delivering similar services through centralised loan processing centres. Other banks may also consider to sanction/process loans to SHGs from s single / dedicated branch. Empowerment of Persons with Disabilities Reserve Bank of India, vide its letter number DBOD No.Leg.BC.51/ / dated issued guidelines to all the banks to open the accounts of disabled person s and also for mentally retarded persons with the guardianship of their parents/relatives. However some banks are not in favour of opening of accounts of the SHGs of persons with disabilities and further sanction of loans to them. Banks are requested to open SB accounts and sanction loans to them to the natural/court appointed guardian of the mentally retarded and minor persons with disability. Urban Self Employment Programme Under USEP, 8796 units were sanctioned against a target of for the year Out of the above sanctions 5784 units were grounded up to Banks are requested to sanction remaining units and ground before Abhaya Hastam Banks are not opening the accounts of Abhaya Hastam pensioners and insisting deposits at the time of opening. In the State, in urban areas 7000 accounts were opened against eligible. Banks are requested to open No Frills accounts to Abhaya Hastam pensioners as they are poor. Banks may also see the possibility of issuing of ATM/Smart cards to Abhaya Hastam pensioners. Self Help Groups recovery of loans The overall recovery performance of SHG loans is around 85%. In all the Town Level Bankers Committee meetings (TLBC) the recovery aspect is discussed as the first and foremost agenda item. Banks are requested to give the lists of defaulters to the recovery teams constituted under Community Based Recovery Mechanism (CBRM) and participate in recovery. 12

13 Sri T Vijaya Kumar, IAS, Chief Executive Officer, SERP stated that Bank linkages, activity wise, Rs.2700 crores pending for sanction in various drought affected Districts and Rs.500 crores in flood affected areas of Krishna and other Districts are to be grounded by CEO has assured that the Government would assist for recovery of the dues from SHGs. CEO opined that Bankers should conduct recovery meetings taking the assistance of CBRMs of the Government on monthly basis and the Branch Managers should be proactive to ensure 100% recovery. The recovery has shown improvement from 82% to 90% in some Districts. CEO further stated that wherever Branch Managers are taking interest, the recovery is 100%. CEO further stated that 100% computerisation of SHGs in the State is completed and suggested that banks can ascertain the recovery position, if the data available with the banks is matched with the data in their computer system. Smt Rachel Chatterjee, IAS, Special Chief Secretary to Government, Agriculture Department said that scales of finance should be followed with regard to Crop Loans or Agriculture Short Term Loans. Special Chief Secretary has requested to reiterate the guidelines once again so that at branch level full scale of finance will be sanctioned without any deviation. Smt Rachel Chatterjee, appraised to the house that a study team reported that still 49% people are benefited by bank finance and still 51% people are borrowing from money lenders. Special Chief Secretary requested NABARD to take up the fixing of scales of finance for Agriculture Term loans so that the Investment Credit under Agriculture can improve. Special Chief Secretary has congratulated the Banks for achieving the Khariff lending and requested to achieve the 100% Rabi lending also. Sri R Subrahmanyam, IAS, Principal Secretary, Rural Department stated that recently a special meeting was conducted with all Lead Bank Executives on the Community Managed Sustainable Agriculture (CMSA) initiative by SERP and action points were drawn. Principal Secretary has requested the Forum to pass the resolution on these action points for implementation of the new initiative. Shri K L Malleswara Rao, General Manager, APCOB, felt that the achievement under the PM s 15 point Programme for the Welfare of the Minorities is poor due to lack of awareness. Lead Banks in the respective Districts shall join hands with AP Minorities Finance Corporation to conduct training programmes and awareness camps about the scheme to achieve the targets. In reply to the above, MD, APSFC informed that such awareness programmes are being conducted at regular intervals. Shri Y Prasad, Convenor SLBC of AP informed that on 6th March, National Conference was held for Minorities in Hyderabad and Andhra Bank has distributed loans sanction letters to the tune of Rs.1.52 crorres. 13

14 Shri Sudhakar Reddy, Chief Manager, Indian Bank informed that in Kurnool District, SERP has extended support during the recovery campaign and he thanked the CEO, SERP for the same. Shri S Lakshman Rao, LDM, Krishna informed that there were problems in recoveries in SHGs in Krishna District. LDM informed that Rs.10 crores was held up in SBI, Kaikalur and requested MD, SERP to help in recovery. Further the LDM has requested the Government to take steps for improving recovery and weeding out the duplicated groups or presence of SHG members in more than one group and improve the dynamics of the group. Shri Sai Prithvinath, Deputy General Manager, Bank of Maharashtra informed that he was the Convenor earlier for SLBC, Maharashtra. DGM observed that in Andhra Pradesh participation is very active and felt that it needs to be congratulated all the Government Officials and Bankers of Andhra Pradesh. DGM mentioned that their bank has a very small participation in the State of Andhra Pradesh. However, in Nalgonda District and Visakhapatnam District, their Bank has taken the help of Christian Machinery for all banking activities. Shri Y K Raghavendra, LDM of Anantapur stated their bank was taking the help of MEPMA in the recovery of urban SHGs. LDM also stated that the group meetings were not held properly with regard to SHGs. The group leaders should be made responsible for the recovery of the loan and banker need not go for each household for recovery but follow up with the leaders. Shri D P Shanker Chatterjee, Sr. Associate Professor, NIRD stated that in Andhra Pradesh the NREGS is doing well. Sri Chatterjee recalled that NREGS is named as Mahatma Gandhi NREGS. The banking net work in Andhra Pradesh and SHGs micro credit plan is good and appreciated the State for its activities. Sri R Shankara Rao, LDM, West Godavari District informed that the interest subsidy was not received by any of the banks in their District under Pavala Vaddi Scheme. Special Chief Secretary, Agriculture Department assured that she would look into the same. Shri Vijaya Kumar, CEO, SERP stated that the main focus of the State Government was to concentrate on recovery of the Self Help Groups on top priority. CEO has informed that after re-election of Dr.Y S Rajasekhar Reddy as the Chief Minister of Andhra Pradesh, in his first video conference Dr Reddy advised the District Collectors to focus on recovery of SHGs on top priority. It itself shows that the commitment of the Government for the welfare of lending under SHG and shown interest on recovery of the SHG loans. CEO further stated that the Branch Managers are requested to conduct meetings within the SHG representatives and recover the dues. CEO further insisted that the Branch Managers to participate in the monthly CBRMs (community based recovery mechanism) meetings which may solve most of the branch problems including recovery. 14

15 Sri R Subrahmanyam, IAS, Principal Secretary, Rural Department informed that their department developed a new system of SMS based on line mechanism. With the help of this system, any default in repayment of one or more EMIs, banks can check up the website and concentrate follow up on such defaulted borrowers. Shri V Elisha, Director National Commission for Scheduled Castes/Scheduled Tribes, Govt., of India commented that the disbursement under Pavala Vaddi Scheme is only 17,539 farmers during and the amount disbursed is Rs.1.16 crores which is not a satisfactory. Director, NC of SC/ST insisted for higher allocation and higher disbursement during and The Director requested for the number of SCs who were given Kisan Credit Cards. Further it was observed that it is mandatory to have 16% allocation and achievement in ME, SE & ME categories, the Director hence requested for copy of guidelines DBOD No.BP.BC.37/ / dated With regard to the Industrial promotion, Director requested for formation of Trust to provide Credit Guarantee Fund for SC/ST entrepreneurs. The commission required to discuss with Government and SLBC and get details for in depth study. This has to be reflected in industrial policy also, as Government is proposing to leverage the credit limit to SC/STs upto Rs.5 crores without security. The figures indicated against loans to SC/STs as observed by the Commission, as disappointing which was only 9.80% advances and requested for the role of banks, in economic development of SC/STs and insisted that there is need to kick off a debate on this subject. The commission felt that the SCs are not getting their due share in Government sponsored schemes like SGSY, SJSRY, PMEGP, etc. Shri R S Reddy, President, SLBC of Andhra Pradesh, Chairman & Managing Director, Andhra Bank, in his concluding remarks stated that fruitful discussions were held with the Chief Secretary, Govt. of Andhra Pradesh and the Government officials. President of SLBC assured that all the said targets would be achieved by the end of this month. In reply to some of the LDMs points, President felt that these issues are to be discussed at the respective DCCs as these are pertaining to Districts. President of SLBC thanked the participants for making the meeting meaningful and successful. Shri B Anantha Rao, General Manager, Andhra Pragathi Grameena Bank proposed Vote of thanks and before that GM has raised two issues. One is about the Pavala Vaddi Scheme, where the interest under the scheme was not received by APGB from and the second one is about the bogus Pattadar Pass books. GM stated that due to huge number of Pattadar Pass books the MROs were not in a position to go through these records and certify. GM has requested the Government to help bankers in this direction. The detailed emerged in the Meeting are given below. The list of participants is enclosed separately. 15

16 Agenda Discussed S.No. Contents 1 Financial Inclusion & Providing Banking Services in Un Banked Areas Financial Inclusion Financial Inclusion by Extension of Banking Services Use of Business Correspondents (BCs) Financial Inclusion Plan Preparation by Banks Un Banked and One Banked Mandals in the State Financial Literacy and Credit Counseling Centres FLCCs 2. Prime Minister s 15 Point Programme for the welfare of minority communities Reschedulement of Khariff, loans Loans to New Non Loanee Farmers and Tenant Farmers Pavala Vaddi Scheme Kisan Credit Cards 3. Investment Credit Pattadar Pass Books Tenant Farmers ADW&DRS 2008 Un paid accounts of farmers covered under Relief scheme Extended time upto Preparation of State Annual Credit Plan Micro Small & Medium Entrepreneurs Credit Guarantee Fund Trust for Micro & Small Enterprises ( CGTMSE ) Industrial Promotion Formation of A.P. Industrial Credit Guarantee Fund Trust for SC/ ST Entrepreneurs ( A Trust Floated by AP Government ) Industrial Policy of GoAP for 2010 to15 Issues to be Included Swarojgar Credit Card Scheme 6 High Level Committee Recommendations to Lead Banks & Commercial Banks 7 Self Help Groups ( Rural & Urban ) Sub Committee Report on issues relating to SHG Bank Linkage Rural S H Gs - Urban S H Gs Pavala Vaddi Scheme S H Gs - Empowerment of Persons With Disabilities in Urban Areas Opening of SB a/cs and Financing of SHGs of Persons With Disabilities (PWDs) S H Gs - Abhaya Hastham Social Security Pension Scheme for SHGs S H Gs Rural Splitting of SHGs for formation of New Groups Functioning of VOs Mandal Samakhyas / Federations S H Gs Recovery of Loans extended Urban & Rural S H Gs JLGs & Activity Based SHGs S H Gs Low progress in setting up of Micro Enterprises, Non Farm Sector and related activities S H Gs - NSCFDC Micro Credit Scheme S H Gs Reschedulement of Bridge Loans under Indiramma Housing Loans S H Gs - Community Managed Sustainable Agriculture(CMSA)initiative of SERP 16

17 8 Housing Loans HLs under RGK, VAMBAY, INDIRAMMA Recovery Steps to be taken to enable beneficiaries become eligible for incentive scheme of the GoAP Budget Announcement % Interest Subvention on Housing Loans upto Rs.10 lakhs guidelines c. ISHUP d. Reverse Mortgage Scheme 9 Educational Loans Interest Subsidy 10 Loans to Weaker Section & Women 11 Loans to Scheduled Caste / Schedule Tribes Financing SC / ST Entrepreneurs for establishment of Industries Self Employment Scheme Assistance to Safai Karmacharies 12 Rural Self Employment Training Institutes Government Sponsored Schemes Centrally Sponsored Government Programmes Progress (SGSY, SJSRY, DRI, PMEGP, ISHUP ( data ) State Sponsored Government programmes Progress 17

18 Agenda No. 1 Financial Inclusion- Providing Banking Services in Un Banked Areas Financial Inclusion As part of the report Dr. C. Ranga Rajan Committee has recommended the establishment of two Funds in NABARD, namely Financial Inclusion Fund (FIF) for meeting the cost of development and promotional interventions for ensuring Financial Inclusion and the Financial Inclusion Technology Fund (FITF) to meet the cost of technology adoption with an overall corpus of Rs.500 crore each. Reserve Bank of India has initiated the following for Financial Inclusion: Banks have been urged to make available a basic banking `no frills account either with `nil or very low minimum balances as well as changes. [As a result, 3.30 crore new `no frills bank accounts were opened up to 31 st March 2009 in the country.] Banks have been asked to issue General Purpose Credit Cards (GCCs) for these no frills accounts. All the Banks are requested to Dispensing with no dues certificate (NDC) for small loans up to Rs.50000/-. All the Lead Banks to Considering opening of counselling centres before March All the Banks to Extending credit to landless labourers, share-croppers and oral lessees based on the certificates provided by local administration / Panchayat Raj Institutions were accepted and banks have been advised accordingly. All the Lead District Managers are advised to ensure implementation as per Road map. The Districts which have completed opening of no frills accounts >75% are advised to reach 100% by March, Opening of No Frills accounts on going basis with the help of GoAP. SBH, SBI, Indian Bank and Syndicate Bank to ensure opening of FLCCs in their districts before SBH & SBI to ensure opening of RSETIs in their lead districts immediately. GoAP, Rural Dev. Dept., may consider increasing Service charges from 2% to 4%. RBI may consider of Rs.50/- per card for all the cards issued without any restrictions regarding payments on NREG Smart Cards. All the Banks which have undertaken the Smart Card Project are advised to complete the issuing of Biometric Smart Cards by June, All the Banks to confirm that they are following RBI guidelines in respect of Business Facilitators/ Business Correspondents and obtaining prior approval of DCC while appointing, whenever there are deviations. ( Action: All Controllers Banks & LDMs ) 18

19 Financial Inclusion by Extension of Banking Services Use of Business Correspondents (BCs) Reserve Bank of India advised all banks to take necessary action for implementing the various recommendations of the Working Group as indicated in the Annex. Banks are permitted to appoint the following entities as BCs, in addition to the entities presently permitted: (i) Individual Kirana/ Medical / Fair Price Shop owners (ii) Individual Public Call Office (PCO) operators (iii) Agents of Small Savings Schemes of Government of India/Insurance Companies (iv) Individuals who own Petrol Pumps (v) Retired teachers and (vi) Authorised functionaries of well run Self Help Groups (SHGs) linked to banks. Reserve Bank of India, with a view to ensuring the viability of the BC model, banks (and not BCs) are permitted to collect reasonable service charges from the customer, in a transparent manner under a Board-approved policy. All Banks may initiate steps for up scaling the usage of Business Facilitators/ Business Correspondents keeping in view the RBI guidelines Banks to inform the number of Business Correspondents/ Business Facilitators appointed in the State and the details of the activities being taken up them to SLBC immediately. The Rural Development Department may inform the short list and empanelling the Business correspondents in each district and work out modalities to rate them. ( Action: All Banks ) Financial Inclusion Plan Preparation by Banks Financial Inclusion denotes delivery of financial services at an affordable cost to the vast sections of the disadvantaged and low-income groups The various financial services include credit, savings, insurance products and payments and remittance facilities. The objective of financial inclusion is to extend the scope of activities of the organised financial system to include within its ambit people with low income groups and who are residing in remote areas thus excluded from the formal Banking Network. 19