STATE LEVEL BANKERS' COMMITTEE, TAMIL NADU CONVENOR: INDIAN OVERSEAS BANK. MINUTES OF THE 127 th S L B C MEETING HELD ON

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1 STATE LEVEL BANKERS' COMMITTEE, TAMIL NADU CONVENOR: INDIAN OVERSEAS BANK MINUTES OF THE 127 th S L B C MEETING HELD ON th SLBC Meeting of Tamil Nadu was held at Chennai on 16 th September, List of participants is furnished in the Annexure. Welcome Address :. Smt. Nupur Mitra, Executive Director, IOB welcomed the participants to the 127 th SLBC Meeting of SLBC, Tamil Nadu. In her welcome address, she solicited continued co-operation, support and involvement in the smooth conduct of the meeting and for meaningful & vibrant deliberations. She stressed on the following points in her welcome address. While Khariff crops and Crop Loans have assumed special importance in view of directives from Central Government, some special points have been discussed in the meeting. Some of these have come up as one-time-agenda and some others would continue as subjects of interest in all future meetings of SLBC. These special points of discussion were (a) Covering all farmers by granting them crop loans by way of cash credit before 15 th October 2011 (b) Routing of Social Security Benefit Payments and MNREGA payments through Banks (c) Adopting One-Panchayat- One BC model under Financial Inclusion; and (d) Empanelment Provided by UIDAI to Banks in Tamil Nadu for AADHAR 1

2 Smt. Nupur Mitra mentioned in her welcome address that making Financial Inclusion financially viable for the Banks and the Business Correspondents is the main focus. The simplified channel for the Central and State Governments to implement various welfare schemes is through Financial Inclusion channel. With a view to have the Business Correspondent, a more viable commercial unit, Government of India suggested village Panchayat as the base unit through which the Financial Inclusion to be implemented. Timely submission of the precise data and steady flow of information are the key factors to the success of SLBC and its co-ordinated activities for the development of the State. SLBC seeks the cooperation of all Banks in ensuring prompt submission of data. The various departments of the State Government are also requested to submit the required performance data relating to various Government Sponsored schemes well in time to enable SLBC to include the same in the agenda for a purposeful discussion by the forum. Inaugural Address:- Shri M. Narendra, Chairman & Managing Director, Indian Overseas Bank and Chairman, SLBC, Tamil Nadu in his inaugural address reviewed the progress made by the Banking system in Tamil Nadu under various key parameters and outlined the action areas for Banks as under: South west monsoon has brought above normal rainfall everywhere including Tamil Nadu. The Cauvery delta is benefited by opening of Mettur dam in June. Cauvery Delta area is poised to have three crops during the current year. The opening of other reservoirs also provides ample scope for raising crops in our state. This opportunity needs to be harnessed. 2

3 Secretary of Finance, Government of India has advised to provide crop loans by way of cash credit to all farmers by The deadline was originally set at 30 th September but was subsequently reset at 15 th October; allowing longer time to banks. SLBC convened special meetings and drafted action plans which was circulated to all member banks. He along with Mr.Bhasin, Chairman of Indian Bank had the opportunity of interacting with the Union Finance Secretary on 9 th September, through video conference who reiterated the need for simple ways of credit delivery and 100% coverage of farmers. The Secretary may have a video conference with the Regional and Zonal Heads of Banks in this regard. Today s agenda has flagged off this matter for deliberation. Financial Inclusion: Under the current Financial Inclusion Project, Banks have been extending banking services to villages having population over Shri. M. Narendra observed that 2505 villages have been covered by Banks up to June 2011 against the targeted level of 4385 villages by March Banks have still to cover 1880 villages by But it is a matter of grave concern that many banks are yet to cover even a single village. This is pulling down the overall performance of the state and nullifying the excellent work done by other Banks. He would take up the matter with CMDs of respective banks and also advised the local chiefs of these Banks to ensure 100% coverage by October 2011, though it is originally decided by this forum to complete on or before December,2011. He also observed that some Banks are giving misleading information about coverage of villages. A village cannot be claimed to have been covered under Financial Inclusion just by identifying or appointing a Business Correspondent. Accounts have to be opened, Smart Cards should be issued and actual transactions must take place before the village is accepted as covered. The information must necessarily be 3

4 given in the prescribed proforma. Any oral information given in this meeting must be based on real achievement. Ministry of Finance, Government of India has already initiated steps for coverage of villages with population above 1000 in the next stage villages having population between 1000 and 2000 have been identified through respective DCCs and allotted to Bank Branches for extension of Banking Services. However no roadmap has been drawn for coverage of these villages. He requested all Banks to prepare their action plans for covering these villages, for which the given deadline is 31 st March The Ministry has advised all the SLBC convenors to ensure that all the subsidies / grants in 35 Centrally Sponsored Schemes are credited directly to the accounts of the beneficiaries electronically through bank accounts. The request is already made to the State Government. Banks are requested to open hassle free no-frill accounts, to facilitate smooth transition to 100% Electronic Benefit Transfer mechanism in our State. CMD, IOB acknowledged the initiatives taken by Government of Tamil Nadu towards achievement of the above goal. A pilot project has already been launched in three taluks of Tamil Nadu for payment of Tamil Nadu Government s Old Age Pension through the Smart Cards operated by Business Correspondents of various banks. The Hon ble Chief Minister of Tamil Nadu inaugurated the scheme on 2 nd September, 2011 at Chennai. The state government is also contemplating routing of grants under Dr. Muthulakshmi Maternity benefit Scheme, through bank accounts. He expressed confidence that all the payments of subsidies /grants/ pensions etc would be routed electronically through Bank accounts in the State. It is also desired by Union Finance Ministry that under Financial Inclusion, all villages in a particular Panchayat can be allotted to One Bank and one Business Correspondent in the long term. The same 4

5 strategy is to be adopted also for the 4430 villages which have population below One Panchayat- One Bank- One BC has to be the model for implementation of Financial Inclusion Plan. If more than one bank is allotted with different villages in a particular panchayat, then those villages can be swapped subject to willingness and convenience of both Banks. All the DCCs have been advised to initiate action in this regard. RSETIs & FLCCCs (Rural Self Employment Training Institutes and Financial Literacy cum Credit Counselling Centres) CMD, IOB observed that RSETIs have been set up in 22 out of the 31 districts in the state. The remaining 9 RSETIs have to be opened by two allottee Banks. The position remains the same from the 126 th SLBC. He requested the lead banks to set up RSETIs in their allotted districts expeditiously, so that Tamil Nadu could achieve 100% coverage of all districts. Though in SLRM 2010 held on , it was decided to set up FLCCCs in all the districts by June 2011, still 15 districts are yet to be covered. He appealed to all the three Lead Banks to set up FLCCCs in their respective districts immediately. He recollected that in the last SLBC, all Banks had assured to this house that they would operationalise the RSETIs and FLCCCs by the end of July It had not happened. He expected the SLBC discussions to be taken more seriously. Highlights of Banks Performance in Tamil Nadu He then listed out some of the highlights of the achievements of the Banking system in Tamil Nadu as at the end of June,

6 CD Ratio as of June 2011 has reached the level of %. Kancheepuram is the only district having CD Ratio below 60% (53%) Deposits have increased by 14.17% in the state year on year (June 2010-June 2011) Aggregate Credit Outstanding increased by 21.83% year on year (June 2010-June 2011) The share of Priority Sector advances to total credit is 40.09% as of June 2011 against the national norm of 40%. The share of agricultural advances as on June 2011 is 16.21% against the national norm of 18%. This is an area of concern. Banks should endeavour to reach the targeted level of 18% before December, The share of advances to weaker sections increased to the level of 9.54% as on June 2011 against the national norm of 10%. He appealed to the member banks to ensure that the target of 10% is surpassed before December, Under Swarnajayanti Gram Swarozgar Yojana (SGSY), Banks have disbursed Rs Crores in the current year upto June 2011 against the annual target of Rs Crores (36.23%). The Municipal Administration Department is requested to advise SLBC on the SJSRY targets and action plan for the current year ( ) Another area of concern is the performance of Banks under ISHUP (Interest subsidy for Housing Urban Poor). There is a wide gap between numbers of applications received and number sanctioned (71144 Vs 3971). He requested all member banks to expeditiously dispose of the applications and also to disburse the sanctioned loans. 6

7 Performance under Annual credit Plan ( ) upto June 2011 As per quick information reports received, under Annual Credit Plan Banks in Tamil Nadu have disbursed Rs Crores from April to June 2011, achieving 94% of the targeted Rs crores up to June, Credit flow to the agricultural sector amounted to Rs crores (99%) while Credit flow to Non Farm Sector was for Rs crores. Other Priority Sectors got Rs crores. Before concluding, CMD, IOB once again requested the State Government to notify all banked centers of the State under Transfer of Property Act as done by certain other states. This would help the borrowers to avail loans without having to go to another place to deposit their title deeds for creating mortgage. Secondly he requested the State Government to waive the stamp duty and registration expenses on Crop Loans which is one of the action areas emerging out of Finance Secretary s letter to all SLBC Convenor Banks. Thirdly he also requested Agricultural Department of the State Government to assist the Banks by providing them list of all eligible but uncovered farmers, as soon as the data is ready. The Union Finance Ministry had also advised that State Government can print and supply common Agricultural Loan application forms to all farmers and also collect the filled-in forms and pass on to Banks. 7

8 CMD, IOB & Chairman, SLBC acknowledged the whole hearted and continued support received from the various Departments of Government of Tamil Nadu, Reserve Bank of India, NABARD and the member Banks both at the State level and at the Districts level and thanked them for the same. Keynote Address Shri. K. Shanmugam, I.A.S., (Principal Secretary, Finance, Government of Tamil Nadu) Shri.K.Shanmugam, I.A.S., Principal Secretary, Finance, Government of Tamil Nadu congratulated ED Smt. Nupur Mitra on her elevation as CMD and observed the following in his keynote address:- 1. Focus of the new Government is mainly on the primary sector. More allocation has been made in the budget to Agriculture/Animal Husbandry and tiny sector. 2. Distribution of Goats and Sheeps/Dairy development is done as a welfare measure. More thrust is given to increase milk production. More number of Co-Operative Milk Producers Societies are to be formed to augument milk production and procurement. 3. Similarly lot of thrust is given to the Fisheries Sector, particularly deep sea fishing. Substantial subsidy assistance upto Rs.5.00 lacs (20%) is given for purchase of fishing vessels/equipments/tuna liners. 4. Investment credit under Agriculture is to be given a big boost. Schemes like drip irrigation is provided with 100% subsidy for small and marginal farmers and upto 75% for big farmers. 5. The Finance Secretary emphasized the importance of Agro Processing units coupled with contract farming. The farmers can also have 25% ownership in the processing units. The share capital of 25% for the farmers shall be borne by the State Government. A subsidy allocation of Rs.5.00 crores has been made. Units like Chillies processing in Ramanathapuram, Mango pulp production in Krishnagiri and Seed production in Dindigul can 8

9 be initiated. Based on the success more number of such units can come up in the State in future. 6. Similarly Green House cultivation/polyhouse cultivation of Horticultural crops, Farm machinery are some of the items on which much focus has been given in the budget. Three levels of farm machineries are contemplated, i.e., very big machineries by the Government, Medium sized machines by the Co-operatives and small level machines by the individuals. 7. He has also informed the forum that T.N. Government s Agriculture Department has initiated a scheme to train the educated youth to start Agro Service Centres. The trained people can have their own infrastructure to undertake farm operations/technical advice etc. Self Help Groups can also be involved who can undertake the total work of raising crops on contract basis including raising of nursery, preparation of field, planting etc. Similar kind of models may come up in future in raising crops like sugarcane, post harvest processing etc. 8. The Finance Secretary also stressed the need for implementation of financial inclusion in full swing. The Government wants the people to access the banking services at their doorsteps. Despite the availability of a bank branch, people for obvious reasons prefer to get banking services through Business Correspondents at their doorsteps. The State Government now has decided to route all their assistance schemes through banks only. He requested the bankers to utilize this opportunity. 9. He was sure that once all the payments are routed through banks especially through Business Correspondents, then the viability is not a question at all and the concept is very much workable. The Finance Secretary assured the forum that the issue of notification of all centres for the purpose of creation of equitable mortgage would be examined. He also informed that the issue of waiver of mortgage fee shall also be discussed at the appropriate level and decided. 9

10 Shri. N.S. Vishwanathan, Regional Director, RBI Chennai in his special address to the forum made the following observations:- 1. It is a pleasure to note that unlike SLBC meetings of other States, the State Government in Tamil Nadu appreciates the good work done by the banks in the development of the State and also extends its full co-operation. All are happy that the targets are met under overall credit disbursement. Due to the reclassification of priority sector advances by RBI, additional lending to this sector is to be done to reach the targets. 2. He expressed dissatisfaction that a lot to be done under MSE sector especially micro sector. Thrust to be given in this area. 3. RBI issued recent guidelines on the electronic payment of grants/subsidies etc., which is to be integrated with Financial Inclusion plan. Tamil Nadu State Government has already launched a pilot project on payment of Old Age Pension in three taluks successfully through banks. 4. The Regional Director commended the role of banks in implementing the pilot project successfully and applauded the State Government s decision to make all payments electronically henceforth. 5. The Regional Director advised the Banks and Government to make arrangements to route MNREGA payments also through Banks. 6. The Government has already given instruction to reach and to finance all the farmers by 15 th October, By doing this the targets can be achieved easily. 7. Banks are requested to sensitize the field level staff, about the importance of financing MSME sector. The CGTMSE scheme can be used instead of insisting on collateral securities. Special Address:- Shri. Ramesh Tenkil, General Manager, NABARD in his special address to the forum observed the following:- 1. NABARD is planning a pilot project in Villupuram district on mobile based Kisan Credit Cards to farmers. The project is ready for roll 10

11 out shortly. NABARD supports the project through various funds. In this process the farmer need not go to the brick and mortar branch to operate his KCC account. 2. NABARD reiterates its initiative to finance KCC to all eligible farmers and the 20% increase in targets set by Govt. of India to be achieved. 3. The interest subvention incentive of 3% offered to farmer s upto the loan amount of Rs.3.00 lacs is not availed by all the farmers in Tamil Nadu. Lack of adequate publicity may be the reason. Banks including PACB s need to step up their publicity efforts. The scheme can be popularized through farmers clubs, placing publicity material in the branches, organizing awareness camps etc. 4. The General Manager, NABARD also suggested the Agricultural Co-operative Staff Training Institute should include sessions on the Interest subvention scheme in all their training programmes and also requested the sponsor banks of RRBs to include sessions in their training programmes for their staff. 5. The Government of India contemplates to infuse funds for the Weaver sector, which programme is to be finalized shortly. 6. Government of India proposes to increase the credit to Agriculture through Co-operative sector. There are 4531 PACS in Tamil Nadu. The seasonal credit requirements of the PACBs can be funded by Commercial banks and RRBs. 7. Under the scheme for artificial recharge of dugwells, lot of subsidy is yet to be utilized by banks. Controlling offices of all the Banks are requested to refund the unutilized subsidy to NABARD. 8. For poultry units a new Capital subsidy scheme is introduced by NABARD, in lieu of the Venture capital scheme which has been closed. 25% capital subsidy is available for the farmers with 33% subsidy for SC/ST beneficiaries. Capital subsidy is available for cold storage, feather processing units, etc. 9. The General Manager, NABARD also emphasized the need for reaching the target under Swarojgar Credit Cards. He also appealed to the banks to address the issues arising out of micro credit finance to SHGs. As an alternative JLGs can be considered 11

12 for joint finance. The General Manager also mentioned about the Andhra Pradesh Land Licensed Cultivators Ordinance 2011, which envisages issue of Loan and other benefits Eligibility cards to lessee/tenant farmers and requested the forum to explore the possibility of bringing in a similar Ordinance in Tamil Nadu. After the addresses by the dignitaries the Agenda was taken up for discussion. AGENDA: 1 CONFIRMATION OF THE MINUTES OF THE EARLIER MEETING The forum confirmed the minutes of the 126 th SLBC meeting held on AGENDA No: 2 Follow-up action on the decision of the earlier meetings: Notification of Centres for Deposit of Title Deeds for Creation of Equitable Mortgage Transaction (EMT) The forum appealed to the State Government once again to expedite notification of all centres where Bank branches are located as notified centres. This would enable the borrowers to avoid traveling long distances for creation of equitable mortgage. Shri. K. Shanmugam, I.A.S., Principal Secretary, Finance Government of Tamil Nadu, during his keynote address assured the forum that the issue would be examined by the Government shortly. Action : State Government AGENDA No: 3 New Issues 1. Providing Banking services in every village having population of 12

13 over 2000 Shri. S.N. Misra, GM, IOB explained the forum that the banks are in the process of extending banking services to villages having population over The Banks are allotted with 4385 villages to be covered before December, He observed that so far only 2505 villages have been covered by the Banks which is just above 50%. Though some of the Banks have done exceedingly well, some banks are yet to commence operations in their allotted villages. The figures given in the booklet relate to June Many banks have achieved 100% coverage after June A list of banks who are yet to cover a single village is given in the booklet. Shri. K. Raghuram, Chief Manager, Bank of India assured that they will cover the villages allotted to them before December, Mr. Misra advised the forum that the Banks should not exchange villages among themselves without informing SLBC. Shri. M. Narendra, Chairman & Managing Director, IOB, and Chairman, SLBC, Tamil Nadu advised the Banks to cover the villages allotted to them before December, Some of the Banks informed that they have started the coverage of villages which they are confident of completing before December, After the deliberations, the forum advised the Banks to complete the coverage of all the 4385 villages by December, 2011 and to advise periodical progress to SLBC. Action : Banks 2. Financial Inclusion a) The forum noted that lacs no-frill accounts have so far opened by Banks in Tamil Nadu. The forum advised Banks to submit data promptly in time to SLBC. Action : Banks b) The forum requested the State Government to route all the benefit payments like wages under MNREGA also through bank accounts as the State Government has already commenced payment of Old Age Pension through banks in 3 taluks in the State. Action : State Government 13

14 3. Ministry of Finance, Government of India s directives on Lending to Agriculture: Shri. S. N. Misra, General Manager, IOB explained to the forum that Govt. of India has given guidelines to Banks to ensure that all non-default farmers get an agricultural credit limit by which is now extended upto The responsibility of identification and allotment of villages, arranging application forms and collection of filled up forms has been given to the respective DCCs. SLBC has convened a special meeting of the banks and on and necessary instructions have been given to all the 31 LDMs and member banks. As per the data made available by the Agriculture Department there are nearly 82 lakh farmers in the State. As per the data collected by SLBC from the Banks already 70 lakh farmers have availed crop loans. The balance 12 lakh farmers are to be covered by all banks. Shri. Misra also informed that IOB had deputed 30 officers from its Central Office to its 12 lead districts to implement the process along with branch officials. Shri. Selvam Veeraraghavan, General Manager, Indian Bank, informed that Indian Bank has given instructions to all their LDMs, RDOs and Branch Managers to cover all the uncovered farmers. All banks have assured 100% coverage before Agricultural Officer from the Commissionerate of Agriculture informed that the data relating to 21 lakh farmers would be ready only by April, CROP INSURANCE SCHEMES The forum observed that there is some improvement in the coverage of crops under National Agricultural Insurance Scheme, when compared to the previous meetings. However the coverage should improve substantially to cover all eligible farmers. Shri. C. Anbarasu, Regional Manager, Agricultural Insurance Scheme of India Ltd (AICI) explained that there are 3 insurance schemes operated by AICI namely: 1. National Agriculture Insurance Scheme (NAIS) 2. Weather Based Crop Insurance Scheme (WBCIS) 3. Modified National Agricultural Insurance Scheme (MNAIS) The new scheme of MNAIS is implemented on village basis. The Govt. Of India has selected 3 districts in Tamil Nadu under the new scheme namely 14

15 Sivaganga, Cuddalore and Namakkal. He also said that though the Crop Insurance is compulsory the coverage in the State is very poor. After deliberations the forum reiterated that all the crop loans should be covered under insurance for all the notified crops in the notified areas without fail. Action : Banks 5. Seizure of Tractors of willful defaulters by Banks: Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained that when the banks resort to seizure of tractors as a last step for recovery, that too only from the wilful defaulters their attempts are resisted not only by the borrowers but also by the District Administration. The view of the SLBC is taken note of and the State Government is requested to issue instructions in this regard. Action : State Government 6. Setting up of Rural Self-Employment Training Institutes (RSETIs) The forum advised the banks to expedite opening of RSETIs in the lead districts allotted to them. There are 9 more RESTIs yet to be opened in the State to reach 100% coverage. Action : Indian Bank/ Canara Bank 7. SETTING UP OF FINANCIAL LITERACY & CREDIT COUNSELLING CENTRES (FLCCC) The forum advised the banks to expedite setting up of Financial Literacy & Credit Counseling Centres in the remaining 15 districts. FLCCCs have been opened in 16 districts already. Action : Indian Bank/ Canara Bank/SBI 15

16 8. Government of India s Agricultural Debt Waiver & Debt Relief Scheme (ADWDRS) 2008 CAG Audit Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the forum that the Comptroller & Audit General (CAG) has taken up audit of ADWDRS The SLBC is facilitating the smooth conduct of audit throughout the State in various bank branches. Despite repeated requests few banks (list given in the booklet) are yet to submit the data required for the audit. Shri. M. Narendra, Chairman & Managing Director, IOB, and Chairman, SLBC, Tamil Nadu advised the banks to submit the required data immediately. Action : Banks 9. Detection of Counterfeit Banknotes- Revised Procedure advised by Reserve Bank of India: The forum advised the banks that the revised procedure advised by Reserve Bank of India has to be complied with immediate effect. The banks are advised to report the progress in this regard. Shri. N. S. Viswanathan, Regional Director, RBI, Chennai informed that there is a change in the procedure of filing FIRs in the case of detection of counterfeit banknotes. Banks are advised to follow the procedures. The monthly reporting is to be done in the format provided along with the circular in the agenda booklet. Action : Banks 10. Opening of Bank Accounts for SHGs of Transgender Community and Srilankan refugees: Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the forum that the Tamil Nadu Corporation for Development of Women (TNCDW) have formed nearly 70 SHGs of Transgender Community nurtured by the Mahalir Thittam. The State Government announced economic assistance upto Rs lakhs to these groups with 25% subsidy. There are certain problems faced by these groups in opening of bank accounts. The main reason for the reluctance by the banks is the gender issue. He also clarified that SLBC has taken the legal opinion from the Law Department of IOB and there is no legal impediment in opening accounts for the transgender community. The banks are advised to open accounts without any hesitation for transgenders as this is a 16

17 social obligation for their upliftment. He has also made a mention about the exclusive skill training conducted by IOB-RESETI, Thanjavur by which 21 members of the transgender community benefitted and started their own ventures. Similarly 416 SHGs of Sri Lankan refugees living in various camps are also facing problems in opening bank accounts. They are to be provided with revolving fund assistance by the Government. Shri. Ganesh Khanna, AC, (Microcredit) TNCDW informed the forum that 50 more SHGs of Transgender community are to be formed during the current year. The forum after deliberations advised the banks to facilitate opening of bank accounts for SHGs of Transgender and Sri Lankan refugees. Ms. R.V. Shajeevana, Additional Project Director, Puduvazhvu project informed the forum that they are facing problems in opening of bank accounts for SHGs as some of the members are more than 65 years old. The forum advised the banks not to resist opening of accounts as the members are legally entitled to get bank accounts opened. Action : Banks 11. UIDAI-Aadhaar card empanelment by Banks as Registrars of UIDAI: Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu informed the forum that UID Authority of India have empanelled various banks as Registrars in various districts for enrollment of the residents for Aadhaar with a choice of choosing a particular bank. The list of the banks is provided in the booklet. There are 29 banks involved in the process of enrollment as Registrars in 32 districts. The details of the RFE (Request for Empanelment) document are available in the website of UIDAI. 17

18 AGENDA No: 4 REVIEW ON BANKING DEVELOPMENTS IN TAMILNADU ON KEY PARAMETERS AS OF JUNE 2011 The forum noted that year on year incremental Deposit & Credit growth was to the extent of 14.17% and 22.79% respectively for the period June 2010 & June The CD ratio has gone up from % as of June 2010 to % as of June As the banks are expected to cover 100% farmers in their command area before , this would take care of the achievement of stipulated 18% norms under Agricultural sector. The forum advised the banks to accelerate lending under DRI scheme. Shri. G. Selvarajan, Agricultural Officer, Dept. of Agriculture requested uploading of Agenda in the SLBC Website. Action : Banks/ SLBC AGENDA No: 5 REVIEW OF PERFORMANCE UNDER ANNUAL CREDIT PLAN : APRIL 2011 TO JUNE 2011 The forum took on record that achievement under ACP (April 2011 to June 2011) is to the extent of 94% with the achievement under Farm Sector, Non-Farm Sector & other Priority Sector being 99%, 88% and 89% respectively. The forum advised Banks to ensure 100% achievement under ACP under all the three sectors. Action : Banks 18

19 AGENDA No: 6 SWARNA JAYANTI SHAHARI ROZGAR YOJANA (SJSRY) Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the forum that details of progress under SJSRY for the programme year as on is given in the booklet. The subsidy utilization is 93.17% & 95.25% under USEP and UWSP Schemes respectively. Banks are advised to speed up the sanction/disposal to ensure 100% utilization of subsidy. Shri. R.S. Krishnan, A.P.O., Municipal Administration informed the forum that the entire 100% subsidy would be utilized before end of October For the action plan under USEP, Rs crores is allotted. Under UWSP also Rs crores financial targets are given. Specific instructions have been given to all the Municipalities to utilize the funds before March, Action : Banks/Municipal Admn. Dept. AGENDA No: 7 Prime Minister s Employment Generation Programme (PMEGP) Shri. R. Prabhakar Rao, State Director (PMEGP), KVIC, Chennai informed that against the physical target of 2374 projects, 1071 projects have been sanctioned by banks upto (1324 upto ). The subsidy amount of Rs.2.93 crores are yet to be utilized by nodal banks. The pending subsidy amount will be received shortly from the Government. A deadline of is set for receipt of pending margin money claims from banks. All the banks are requested to submit the pending margin money claims immediately. The forum advised the banks to submit the claims expeditiously. Action : Banks/KVIC 19

20 AGENDA No: 8 SWARNJAYANTI GRAM SWAROZGAR YOJANA (SGSY ) Shri. J. Ganesh Khanna, AC (Microcredit), TNCDW informed the forum that during the year , banks in Tamil Nadu have disbursed credit to the extent of Rs crores under SGSY against the target of Rs crores with 36.23% achievement in the four months period from April 2011 to July He also informed that the National Rural Livelihood Mission (NRLM) is going to be launched in the month of January, Hence, the targets given under Revolving fund assistance and Economic activity are to be achieved by December end. The forum after deliberations advised banks & TNCDW to work together to ensure achievement of targets. Action : Banks/TNCDW AGENDA No: 9 Interest Subsidy for Housing the Urban Poor (ISHUP) Shri. K. Muthusamy, Superintending Engineer from Tamil Nadu Housing Board informed that the performance under ISHUP is below par. The applications sent to banks are pending for sanction for a long time. The banks are requested to speed up the sanction process. The representative from HUDCO requested that henceforth the disbursement details under ISHUP may also be provided. The forum advised the banks not to keep the applications pending. Action : Banks/TNHB/LDMs 20

21 AGENDA No: 10 BANK FINANCE UNDER HOUSING SCHEME: The forum took note that housing loan disbursement was to the tune of Rs crores during the first quarter of ended June The forum also noted that the quantum of housing loans sanctioned has come down, comparatively. More number of loans have been granted under sub Rs.5.00 lakhs category (4659). AGENDA No: 10(A) GOLDEN JUBILEE RURAL HOUSING FINANCE SCHEME (GJRHFS) The forum noted that 1542 loans amounting to Rs lakhs were disbursed under the above scheme during the first quarter ended June Action : Banks AGENDA No: 11 Educational Loans The forum observed that the area of concern here is the rising level of NPAs. Shri. M. Narendra, Chairman & Managing Director, IOB, and Chairman, SLBC, Tamil Nadu advised the banks that Educational loans are National Priority and all eligible candidates should be provided hassle free educational loans. The forum took on record that loans to the tune of Rs crores have been granted during the first quarter ended June 2011 of which SC/ST, Minority Communities & Women account for 4481 loans amounting to Rs crores, 6676 loans amounting to Rs crores and 7758 loans to the tune of Rs crores respectively. Shri. M. Narendra, Chairman & Managing Director, IOB, and Chairman, 21

22 SLBC, Tamil Nadu advised the banks to initiate concerted efforts towards reduction of NPAs taking advantage of the restructuring schemes announced by RBI & Ministry. ACTION : BANKS AGENDA No: 12 MICRO & SMALL ENTERPRISES (MSE) SECTOR Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu advised the banks to utilize the opportunities available under the micro sector of MSE and also added that by and large the coverage under MSE is not upto the mark. Shri. N.S. Vishwanathan, Regional Director, RBI Chennai advised that advances to the MSE Sector can well be covered under CGTMSE without insisting for collateral security. The forum took on record that credit flow to Micro and Small Enterprises amount to Rs crores and Rs crores respectively. The share of Micro Enterprises for the quarter ended June 2011 was to the extent of 26.42%. The forum advised the banks to enhance the share of Micro enterprises to 55% in tune with RBI directives. ACTION: BANKS AGENDA No: 13 CREDIT FLOW TO WOMEN The forum noted that the share of credit to women constituted 6.95% of total Bank credit as of June

23 AGENDA No: 14 SELF HELP GROUPS (SHGs) The forum noted that the achievement under SHG-Bank credit Linkage is Rs crores during the five months period ended against the annual target of Rs.4000 crores. The forum advised the banks to step up lending to SHGs and to ensure reaching of the targets. Shri. Ganesh Khanna, AC, (Microcredit) TNCDW requested the forum that the second and subsequent doses of the credit to SHGs may be released for economic activities by the bankers. Action: Banks/TNCDW AGENDA No: 15 CREDIT FLOW TO MINORITY COMMUNITIES Shri. Rizwan Ahmed, Manager, TAMCO thanked the forum for publishing the disbursement details in the agenda booklet as requested during the previous meeting. The forum noted that 1,11,538 accounts amounting to Rs crores were disbursed by the banks to Minority Communities during the quarter ended June, The share of credit to Minority Communities should be 15% or more. However, only 4 Public Sector Banks have reached 15% or above. The forum advised the other PSBs to enhance the share of Credit to Minority Communities to reach the desired level of 15%. ACTION: Public Sector Banks / SLBC 23

24 AGENDA No: 16 KISAN CREDIT CARD SCHEME (KCC) The forum advised the banks to work towards achievement of the target of providing crop loans to all the farmers by as directed by the Ministry of Finance. By achieving the target the quantum of KCC would increase automatically. The forum noted that during the period from April 2011 to June 2011, Banks in Tamil Nadu have issued 2,16,018 Kisan Cards to the tune of Rs crores. Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu informed the forum that out of the 12 lakhs uncovered farmers in the State, Banks have financed nearly 3.00 lakhs farmers as on The remaining farmers are to be covered before for which SLBC has initiated all necessary steps. AGENDA No: 17 Progress Report on Economic Development Schemes implemented by TAHDCO Shri. Vijayrajkumar, I.A.S., Managing Director, TAHDCO, informed the forum that, 1) Tamil Nadu Govt. has pumped additional share capital to TAHDCO recently. 2) During an increased Special Component subsidy of Rs.73 crores is made available by Central Govt. 3) An enhanced subsidy limit of upto Rs.2.25 lacs (30%) per beneficiary is available for SC beneficiaries. 4) Even professionals like dentists, doctors can be supported under the new 30% scheme. MD, TAHDCO requested the banks to utilize the opportunities to clear all the loan applications giving due importance to the scheme. The forum requested TAHDCO to send the progress report on the schemes to SLBC. 24

25 AGENDA No: 18 REVIEW OF NPA ACCOUNTS IN PRIORITY SECTOR LENDING MARCH 2011:- The forum noted with concern, the increase in the quantum of NPA from crores in March 2010 to Rs crores in March, Shri. Sunil Mehta, Deputy General Manager, Allahabad Bank informed the forum about the simplified procedure of creation of charge on the agricultural land for availing agricultural loans and also about the waiver of mortgage charges practiced in Rajasthan. He also narrated that in some states like Rajasthan, the NPA is recovered as arrears of land revenue and suggested that the same procedure may be followed here if found feasible. The forum noted with concern the increase of NPA in Educational Loans and advised the banks to strengthen their appraisal and recovery mechanism. ACTION: BANKS AGENDA No: 19 Success Story:- Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu appealed to the banks to contribute success stories to SLBC. SLBC plans to publish the success stories as a separate booklet if the success stories received are more in number. 1. Additional Agenda: Financing of Licensed Cultivators /Tenant Farmers & Action Plan to finance all farmers by as per Government of India s directions:- Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the forum that the State Government is requested to examine the possibility 25

26 of introducing a similar Loan and other Benefits Eligibility Cards in Tamil Nadu as done by the Andhra Pradesh Government. All banks are expected to complete the financing of uncovered farmers in their command area as it is a commitment given by the banks to the Government of India. ACTION: BANKS 2. Additional Agenda: Disposal of applications seeking finance from Public Sector Banks: Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the various steps advised by the Ministry of Finance, Govt. of India regarding disposal of applications seeking finance from PSBs and advised all the banks to adhere strictly to the guidelines. The State Government is requested for expeditious clearance of the projects coming up in the State where Banks/Financial Institutions have sanctioned the projects but disbursement is pending for want of clearance. ACTION: BANKS/STATE GOVT. 3) Additional Agenda: Routing of Government of India subsidies directly to the account of the beneficiaries, electronically through banks:- Shri. K. Shanmugam, I.A.S., Secretary Finance, Govt. of Tamil Nadu in his keynote address announced that the State Government has already taken a decision to route all the benefit payments through banks only. Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the forum that when the pilot project on Old Age Pension was to be launched, there was some hesitation among the banks and they wanted more time for implementation. However it has been successfully implemented in time. Already 24,000 beneficiaries were covered under the scheme. He advised the banks to extend maximum co-operation to the Government to implement the electronic payment concept fully. 26

27 Shri. M. Narendra, Chairman & Managing Director, IOB, and Chairman, SLBC, Tamil Nadu advised the banks to take the matter seriously as it is a very good business proposition as all the banks are working in a CBS environment. 4)Additional Agenda: Financial Inclusion One Panchayat /One Bank /One Business Correspondent model:- Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the forum that initially under Financial Inclusion villages are allotted to various banks for introduction of banking services in the unbanked areas. Now for a better coverage the focus is shifted from village as a unit to One Panchayat as a unit. Due to this shift in focus, 1. The Business Correspondent will get more coverage and more work and more remuneration as a resultant effect. 2. The banks would be able to cover more villages with the same BC. 3. This is a win-win situation for all. If there are more than one bank operating in more than one village in one Panchayat swapping or mutual adjustment could be done between such banks. After deliberations, the forum resolved to implement the One Panchayat /One Bank /One Business Correspondent model concept. ACTION: BANKS 5) Additional Agenda: Implementation of Electronic Benefit Transfer (EBT) and its convergence with Financial Inclusion Plan(FI):- Shri. S.N. Misra, GM, IOB & Convenor, SLBC, Tamil Nadu explained the salient features of the communication of RBI dated regarding Electronic Benefit Transfer (EBT) and its convergence with Financial Inclusion. 27

28 He also advised that in Tamil Nadu One District- Many Banks model is already is in practice. ACTION: BANKS Table Agenda 1 Bank wise Credit mobilization target under SGSY :- The details of the bank-wise credit mobilization targets under SGSY for is furnished in the table agenda. The forum advised the member banks and TNCDW to ensure 100% achievement of the targets by March ACTION: BANKS/TNCDW Table Agenda No: 2 SWAROZGAR CREDIT CARD SCHEME ALLOCATION FOR The forum advised the banks to work towards achievement of the target of cards for Tamil Nadu during and also advised to submit quarterly progress report to NABARD. ACTION: BANKS The forum acknowledged the excellent contribution made by Smt. Nupur Mitra, Executive Director, IOB for nearly 2 years to SLBC, Tamil Nadu, who would be assuming charge as Chairman & Managing Director of Dena Bank shortly. The meeting ended with a vote of thanks proposed by Shri. S. Murali, Deputy General Manager, Union Bank of India, Chennai. 28