CHAPTER-IV ECONOMIC PROFILE OF THE DISTRICT, PROFILE OF BANK AND THE BRANCHES

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1 CHAPTERIV ECONOMIC PROFILE OF THE DISTRICT, PROFILE OF BANK AND THE BRANCHES 4.1 District Profile 4.2 Important Economic Activities 4.3 Banking Business Data of the District 4.4 Linking Self Help Groups 4.5 Annual Credit Plan & Achievements 4.6 Recovery Position under Priority Sector 4.7 Profile of the Bank 4.8 Profile of Branches Selected for Study

2 CHAPTER IV ECONOMIC PROFILE OF THE DISTRICT, PROFILE OF BANK AND THE BRANCHES 4.1 District Profile: Kolhapur is located in southern part of Maharashtra and is spread through ranges of Sahyadri. The geographical spread of the district is of Sq. Kms. The city of Kolhapur is the district head quarter. The administration of the district is governed through four Revenue Sub Divisions, 12 Tehasils and 12 Panchayat Samittees. Table No.4.1 Sub Division Tehsils Covered a) Karveer Karveer, Panhala, Kagal, Shahuwadi b) Ichalkaranji Shirol, Hatkanangle c) Gadhinglaj Ajara, Chandgad, Gadhinglaj d) Radhanagari Bhudargad, Radhanagari, Gaganbawada Three types of soils are found in the district viz. Red laterite soil in Western Hilly Area, River bed deep soil in central part of the district and medium to heavy black soil in Eastern Part of the District. The district receives rainfall ranging from 1000 mm. to 4680 mm.with average rainfall of 2015 mm. The land admeasuring hectares is covered with forest.. The district is blessed with 7 main perennial rivers viz. Krishna, Warana, Dudhganga, Vedganga, Hiranyakeshi, Chatprabha and Panchaganga (Kumbhi, Kasari, Tulashi, and Bhogavati). All the rivers flow from West to East. The net irrigated area of the district is Ha, Which is about 26% of the net area sown which is Ha. The above mentioned seven prominent rivers and other rivers in the district irrigate about 62% of the net area by Surface water. The main cash crop of the district is sugarcane. Other crops grown in the district includes Paddy, Jawar, Nagli, Wheat, Soyabean, Tur, Gram, Groundnut, 74

3 Sunflowers, Vegetables, Potato, Tomatoes, and Cashew etc. Due to good irrigation facilities and well developed 20 sugar factories in cooperative sector more than hectares of land is under sugarcane cultivation. The credit needs are met by cooperative and commercial banks with tie up arrangement with sugar factories. 4.2 Important Economic Activities Dairy: There is a strong dairy cooperative structure, with a wellbuilt infrastructure in the form of more than 3249 CoOp. Dairy Societies spread through out the district. Kolhapur zilla Doodh Utapdak CoOp. Sangh (Gokul), Warna Sahakari Dudh Utpadak Prakriya Sangh and Mayur Sahakari Doodh Utpadak Sangh are the three major milk unions operating for collection of milk and milk processing activities in the district. Additional two milk Unions have also established and have commenced their operation in the district viz. Shri. Mahalaxmi Sahakari Dudha Sangh, Hamidwada and Shri. Hiranyakeshi Multi Purpose Dudha Sangh, Gadhinglaj Industries: Foundry, Engineering, Textile, Leather and Silver are the main Industrial activities in the district. Textile industries through CoOp. Spinning and Weaving Mills and small size power loom units have been developed in and around Ichalkaranji City. Kolhapur Chappals, Kolhapur Jaggary, Kolhapur Sliver works are famous in the country for its speciality. The district is having 15 cooperative sugar factories and 3 milk products coop. processing unions. The district has registered as many as industries. There are two big M.I.D.C. Industries established at Shiroli and Gokul Shirgaon with 663 and 610 units respectively. Beside M.I.D.C. has also developed mini industrial estates at Halkarni, Ajara and Gandhiglaj. Further, M.I.D.C. has recently set up Five Star Industrial Complex at Kagal, Hatkangale covering 1187 Ha. land to boost up industrial activities in the area and plots are being alloted. M.I.D.C proposes to develop silver park zone in and around Hupari area. Apart from this, seven Cooperative Industrial estates are developed in the district at Jaysingpur, UdyamnagarKolhapur, Hupari, Ichalkaranji, Hatkangale and Yadrav sites. 75

4 4.2.3 Cooperation: Cooperative movement has touched every field of life of the district. It serves rural as well as urban areas with equal zeal and sincerity. There is 1611 Primary Agricultural Credit Coop. societies, 62 Urban Coop. Banks, 2307 Credit CoOp societies (Pat Sansthas), 20 Sugar Factories (Registered ) 353 Textile Societies, 44 Spinning Mills, 3 Milk Sangh with 3249 Milk Societies, 17 Agricultural Processing Societies and 543 Lift Irrigation Societies operating in the district Banking: The Lead Bank for the district is Bank of India. Apart from this there are 20 nationalized banks and 5 private scheduled Banks with 223 branches of which 168 branches have been allotted specific services area covering 1145 villages.the Kolhapur Jilha Madhyavarti Sahakari Bank Ltd., takes up major share of rural finance in cooperative sector. They have a net work of 207 branches in the district. There are 16 branches of Maharashtra State Cooperative Agriculture and Rural Development Bank (Ltd) functioning in the district to take care of medium and long term credit. However, the financial position of MSCARDB continues to remain critical owing to the poor recovery performance. Besides this, there are 62 Urban Coop. Banks and 2307 Cooperative Societies (Pat Sansthas) contributing to the development of the district. Maharashtra State Financial Corporation Ltd. (M.S.F.C.) is also operating in the District through its Kolhapur Office. In addition to above new private sector banks viz.hdfc, ICICI, UTI, IDBI have also opened their branches at Kolhapur. 4.3 Banking Business Data of the District: Progress of Banking in the district can be seen in terms of growth in the total deposits and advances along with various key indicators stipulated by the Govt. / R.B.I. Bank wise such data of the district as on 31 st March 2007and as on 31 st March 2008, 31 st December 2008 is as under. It will be seen from the following data that the performance of the district in respect of various key indicators in above the expected level in all the indicators. 76

5 Key Indicators Table No. 4.2 Banking Business Data Position as on 31/3/ /3/ /12/2008 a) Total Deposits (Rs. in Crores) b) Total Advances (Rs. in Crores) c) C.D.Ratio (Exp. Level 60% ) 110% 103% 90% d) Priority Sector Adv. (Rs. in Crores) Exp. Level(40%) e) Agricultural Advances (Rs.in crores) % of P.S. advances (Exp. Level 18%) f) Advances to Weaker Sector (Rs.in crores) % of W.S. to total adv.(exp.level 10% ) (Source Annual credit plan ) % 56% 67% % % % % % There are important Credit Linked Govt. Sponsored Schemes / Programs being implemented in the District through different departments in coordination with the banks for credit component. The detail of the schemes and the performance there under is given below: Table No. 4.3 Government Sponsored Programmes Government Agency/ Schemes/Programmes Department I) District Rural Dev. a) Swarn Jayanti Gram Swarojgar Yojana (SGS) Agency b) Loan and subsidy scheme for Rural Housing II ) Zilla Parishad a) Bio Gas Development Program b) Special Component Plan c) Sprinkler Irrigation d) Drip Irrigation G.O.I. scheme, G.O.M.scheme, DPDC scheme e) Power Tiller to paddy growers (IPDP) f) HYV Program g) Power Threshers to jowar & Ragi Growers h) Scheme of electric motor / pump sets (SCP) i) National Oil Seed Development Program 3% III ) District Industrial Centre a)seed Money Scheme 77

6 b) PMRY c) National Equity Scheme d) Special Component Plan f) Nursing of sick units g) Single Window h) Women Entrepreneurs i) Exservicemen IV ) K.V.I.B. / K.V.I.C. a) Bio Gas Development Program b) Special Component Plan c) Financing Rural Artisans & their Cooperative societies d) Margin Money Scheme V) MPBCDC Ltd. a) Special Component Plan Scheme b) Seed Money Scheme VII) Maharashtra Charm. & Charmkar Vikas Maha.Ltd. (LIDCOM) IX ) Lokshahir Annabhanu Sathe Dev. Corpn Ltd. X) Other Backward Class Dev. Corpn. XI ) Social Welfare Dept. c) Assistance to Scavengers a) Special Component Scheme b) Margin Money Scheme a) Special Component Plan (Subsidy) b) Margin Money assistance a) Seed Money Scheme a) Self employment for physically handicapped XII ) Kolhapur Municipal a) Suvarna Jayanti Shahari Rajgar Yojana Corpn. & 9 Muni. Councils (SJSRY) b) Dwcua Group Financing. XIII) Dept. of Animal Husb. a) Supply of milch animals under special component plan XIV) Dept. of Fisheries a) Seed money assist for inland fisheries Self employment XI ) Dist. Employment and a) Motivation schemes for employment and Self Employment guidance self employment. Centre b) Shramijivi Yojana Scheme for funding XX ) State Agriculture Dept. (Source Annual credit plan ) Seva Societies of Unemployed Youth. a) Credit Linked Back ended Capital Subsidy Scheme under National Horticulture Mission

7 Table No. 4.4 Performance under Government Programmes Amount Rs. in lakhs Scheme Targets No. of applications Phy. Fina. Sent San Rtn /Rej Pending 1.S.G.S.Y a) SHG(Credit)+subisidy b) Individual Cases (Cr.) P.M.R.Y M.P.B.C.D.C. a) S.C.P.(Suibsidy) b) Seed Money c) Scabengers L. Annabhau Sathe Dev.Coropn. a) SCPSuibsidy b) Seed Money Vasantrao N.T. Seed Money Other Backward Dev.Corporation Seed Money K.V.I.B S.J.S.R.Y. a) K.M.C. b) Other Nagarpalika c) KMC (DWACRA) d) Others (DWACRA) (Source Annual Credit Plan ) Linking Self Help Groups: SHG is homogeneous group of people voluntarily formed to save whatever amount they can conveniently save out of their earning and mutually agree to contribute to common fund of the group, to be lent to the member for meeting their productive and emergent credit needs. Concept of SHG has taken strong roots in rural area of the district and emerged as massive movement of people. The banks in the District along with NABARD and NGOs have made efforts for formation of SHGs. As on 28/2/2008 the total number of groups formed were26737 with 20591groups linked with the banks the details re as under: 79

8 Table No.4.5 Linking Self Help Groups Name of the Bank SHG formed Com/6 Month Com. Gradation SHG Linked Amt. Sanc. Amt. O/S Total Comm. Bank KDDC Total all Banks (Source Bank of India Annual Credit Plan ) 4.5 Annual Credit Plan Outlay & Achievements: All the banks in the district are participating in the implementation of the District Credit Plan, prepared by the lead bank, covering important segments as well as the schemes for development. The targets set and the achievements under the plan for the last three years are given below: Table No.4.6 Targets &Achievements under District Credit Plan Year Sector Target Achievement % Achievement Agriculture S.S.I N.F.S. O.P.S % 112% 57% Total % Year Sector Target Achievement % Achievement Agriculture S.S.I N.F.S. O.P.S % 90% 76% Total % Year Sector Target Achievement % Achievement Agriculture S.S.I N.F.S. O.P.S % 28% 32% Total % (Source Bank of India Annual Credit Plan ) 80

9 4.6 Recovery Position under Priority Sector: Timely recovery of Banks is very important after introduction of prudential norms for income, recognition, Asset classification and provisioning exercise in Banking Sector. The banks are making all out efforts to reduce the level of Nonperforming Assets by adopting various recovery measures. With a view to boost up recovery performance of banks under priority sectors especially under Government Sponsored Programmes, recovery camps are being organized in coordination with Block Level Government functionaries. Results of such recovery camps are quite encouraging in some of the areas. The performance of the recovery of banks in the district is summarized in the following tables. Table No.4.7 Recovery Position of Banks under Priority Sector Sector 1. Agriculture Demand Collection % Recovery June % June % Amount Rs. in lakhs June % June % 2. Small Scale Industry Demand Collection % Recovery % % % % 3. Other Priority Sector Demand Collection % Recovery % % % % 4. Total Priority Sector Demand Collection % Recovery % % % % 81

10 (Source Bank of India Annual Credit Plan ) 4.7 Profile of the Bank History: Bank was founded at the beginning of 20 th century by a group of eminent businessmen of Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized along with 13 other major banks. The Government s holding has come down to percent. The Bank has been paying dividend to its shareholders The Bank Today: At the end of March 2008 Bank of India has 2909 branches, comprising of 2883 branches in India, and 26 branches outside the India. The bank has 91 extension counters at March end 2008 with special focus on niche banking, the Bank has opened 155 specialized branches to cater to the exclusive target groups to develop are advantage for future growth The Business: At the end of March 2008, the global deposits of the Bank stood at Rs crore and global net advances at Rs crore. Export credit outstanding as at March end 2008 of the Bank amounted to Rs.666 crore operating profit at stood at Rs.3701 crore. In the Metropolitan and Urban areas, the thrust is more on installing ATM and inter branch connectivity so as to provide customers anytime anywhere banking Kolhapur Zone of the Bank: In the process of restructuring of bank s administrative set up Kolhapur Zone was created in 2001 with the amalgamation of 51 branches of erstwhile Sangli Region with 40 branches of erstwhile Kolhapur Region covering Kolhapur, Sangli and Satara districts. It has Lead Bank responsibilities in two districts the zone has basically agricultural business and entire economy is dependent on crop of Sugarcane and Sugar Industry. This area covers 52 Cooperative Dairy Societies. All branches have been converted into TBM with all modules. 82

11 Table No.4.8 Population GroupWise Distribution of branches in the zone Location wise Kolhapur Sangli Satara Urban Semiurban Rural Total Table No.4.9 Business Mix & Profit Rs. in crore Particular Aggregate Deposits Aggregate Advances Operating Profit/Loss Profile of Branches Selected for Study Rural Branch: The Branch is located in rural area in Panhala taluka of Kolhapur district. The branch is functioning at the village since At the time of study it had completed 27 years of functioning in the area. The bank undertakes all types of banking activities and business such as deposit mobilization, extending credit to various sectors and segments of the society, retail banking, selling insurance and other third party products. However, being situated in rural area, the main thrust of the branch is on financing to priority sectors namely agriculture, SSI and Service sector. The branch is also financing to priority sectors namely agriculture, SSI and Service sector. The branch is also participating in financing Government Sponsored Programmes such as SGSY, PMRY, REGP, and SJSRY. The branch is also very active linking SHGs. The branch is fully computerized and has 7 villages under service areas wherein the major agricultural business of the branch is concentrated. Brief financial particulars of the branch are as under. 83

12 Table No.4.10 Business Mix Amount Rs. in lakhs Parameters Deposits Advances Agriculture Small Scale Industry Total Priority Sector Staff SemiUrban Branch: The Branch is located in Semi Urban area in Hatkanangale taluka of Kolhapur district. The branch is functioning at Jaysingpur since 1972 and has competed 36 years of functioning in the area. Being located in a very potential area, the bank has undertaken all types of banking business including selling third party products. However, being situated in semi urban area, the main focus is on financing to Priority Sectors namely Agriculture, SSI and Service Sector. The branch is also participating in financing Various Government Sponsored Programmes including microfinance through SHGs. The branch is fully computerized. The service area of the branch includes 5 villages. The branch is closely associated with sugarcane growers and sugar factories in the area.. Brief financial particulars of the branch are as under. Table No.4.11 Business Mix Amount Rs. in lakhs Parameters Deposits Advances Agriculture Small Scale Industry Total Priority Sector Staff

13 4.8.3 Urban Branch: The Branch is located in urban area in Kolhapur city. The branch was opened in the year 1974 and for last 34 years it is providing various banking services to different segments of the society in the command area of the branch. During this period the branch has undertaken different diversified business activities covering industry, service, business and commerce sectors. The branch has also given loans to retail sector commerce & business. The bank undertakes all types of banking activities and business such as deposit mobilization, extending credit to various sectors and segments of the society, retail banking, selling insurance and other third party products. The branch is also participating in financing Government Sponsored Programmes such as SGSY, PMRY, REGP, and SJSRY. The branch is fully computerized and caters to the needs of urban areas in Kolhapur city. Brief financial particulars of the branch are as under. Table No Business Mix Amount Rs. in lakhs Parameters Deposits Advances Agriculture Small Scale Industry Total Priority Sector Staff Reference: 1. Bank of India, Annual Credit Plan Bank of India, Annual Credit Plan Profile of Rural Branch 4. Profile of Semi urban Branch 5. Profile of Rural Branch