Lead Bank/ SLBC (J&K)

Transcription

1 The Jammu & Kashmir Bank Limited Corporate Headquarters T +91 (0) E convenorbank@jkbmail.com M A Road, Srinagar F +91 (0) W Kashmir India Lead Bank/ SLBC (J&K) Ref. No. LBD/SLBC-97/ All Members of the State Level Bankers Committee (J&K) June 25, 2015 Sub: Minutes of the 97 th Meeting of J&K SLBC for necessary action on actionable points. Sir, We forward herewith a copy of minutes of the 97 th Meeting of J&K State Level Bankers Committee (SLBC) held on 10 th June, 2015 at SKICC, Srinagar for your kind information. You are requested to go through the same and initiate action on the decisions / actionable points pertaining to your Organization/ Department. Desired compliance/ progress may kindly be reported to this office over convenorbank@jkbmail.com / Fax enabling us to place the same before the house in next SLBC Meeting for review. Yours Faithfully For Convenor, J&K SLBC Sd/- Assistant Vice President (Lead Bank/J&K SLBC) Encls: Minutes of 97 th SLBC Meeting

2 MINUTES OF 97 th MEETING OF SLBC (J&K) HELD ON 10 TH JUNE 2015 AT SRINAGAR The 97 th meeting of J&K State Level Bankers Committee (SLBC) to review the performance of banks & financial Institutions operating in J&K State as on 31 st March, 2015 under Annual Credit Plan , was held on 10 th June, 2015 at SKICC, Srinagar. The meeting was chaired by Honourable Finance Minister, J&K State Dr. Haseeb A. Drabu. Top functionaries of the State Government, regulators and Banks who attended the meeting included Chief Secretary Mr. M. I. Khanday, Financial Commissioner, Industries & Commerce Department Mr. K. A. Ganai, Commissioner/Secretary, Finance Shri Navin Chowdhary, General Manager, RBI Mr. A. K. Mattu, Chief General Manager NABARD Shanker A. Pande, senior functionaries of state government, banks, Reserve Bank of India, NABARD, Heads of Government departments & developmental agencies and the representatives of various insurance companies operating in the State. List of the participants is enclosed as Annexure A. KEYNOTE ADDRESS BY CHAIRMAN & CEO, J&K BANK (CONVENOR J&K SLBC) Mr.MUSHTAQ AHMAD: At the outset the Convenor, J&K SLBC (Chairman & CEO, J&K Bank) Mr. Mushtaq Ahmad extended warm welcome to Dr. Haseeb A. Drabu, Hon ble Finance Minister and to the dignitaries, invitees, members and participants. He expressed satisfaction that with the level of participation the deliberations in the meeting would be purposeful and result oriented. Delivering the inaugural address, Chairman & CEO, J&K Bank (Convenor J&K SLBC) Mr.Mushtaq Ahmad stated that Financial Inclusion, which is the prestigious programme of GoI has always remained a high priority for promoting inclusive growth and bringing into the banking fold the people who are still financially excluded. He stated that the Central Government has declared the Financial Inclusion a National Mission for implementation through the special programme Pradhan Mantri Jan Dhan Yojana. Commenting on the progress achieved in implementation of various initiatives taken in the State the Chairman stated that: Following the successful completion of Swabhiman campaign, the Phase-II of Financial Inclusion Plan, which envisages providing banking facilities to 5,582 identified unbanked villages having population below 2000, is under implementation and against the cumulative target of covering 4077 villages during the FYs , and the five participating banks have covered 4,319 villages thereby achieving 106% of the cumulative target. Out of this J&K Bank has covered 2465 villages (57%), followed by SBI with 627 villages (15%), PNB with 294 villages (7%), JK Grameen Bank with 742 villages (17%) and Ellaquai Dehati Bank with 191 villages (4%). Out of 4,319 villages covered under Phase II, banking facilities to 164 unbanked villages were provided by establishing regular brick and mortar bank branches, 3,970 villages through BC Model and remaining 185 villages through other modes like mobile banking vans. Under Pradhan Mantri Jan Dhan Yojana (PMJDY), upto 15 th May, 2015 banks in J&K State have opened lakh fresh accounts with lakh beneficiaries provided Rupay Debit Cards. 97 th meeting of J&K SLBC 1

3 The GoI, MoF initiative for 100% coverage of farmers under Kissan Credit Cards is being pursued with all seriousness. Against the revised target of covering 9.81 lakh farm-operating families in the State who are interested to acquire KCCs, 8.42 lakh KCCs have been sanctioned by various banks upto the end of March, 2015, which constitutes 86% of the target. EBT Scheme, which envisages direct transfer of benefits under various Social Security Schemes to the beneficiaries accounts, has already been implemented in six pilot districts of the State i.e. Srinagar, Ganderbal, Jammu, Rajouri, Kargil & Leh in the first phase and benefits under IGNOAPS have been successfully transferred into the accounts of beneficiaries. The data validation in respect of remaining 16 Districts is under process and these districts shall be covered under the scheme very soon. He expressed optimism that the objective of GoI, MoF shall be achieved in near future. Commenting on the credit disbursements in J&K State during the FY under ACP, Mr.Mushtaq Ahmad stated that 46 Banks/ FIs operating in the State with a network of 1936 branches have extended a total credit of Rs.16, Crore in favour of 5,04,256 beneficiaries (under Priority and Non-priority Sectors) against target of Rs.19, Crore for 8,83,458 beneficiaries under Annual Credit Plan , thereby registering achievement of 84% in financial and 57% in physical terms. This includes Priority Sector credit of Rs.9, Crore disbursed in favour of 3,74,083 beneficiaries against the target of Rs.12, Crore for 6,74,773 beneficiaries (72% achievement in financial terms and 55% in physical terms) and Non-priority sector credit of Rs.7, Crore in favour of 1,30,173 beneficiaries against target of Rs.7, Crore for 2,08,685 beneficiaries (104% achievement in financial terms and 62% in physical terms). Mr. Mushtaq Ahmad stated that with credit disbursement of Rs.6, Crore to the Priority Sector, J&K Bank has been the major contributor (share 69%) in financial terms followed by SBI with the contribution of Rs Crore (7%), PNB with Rs Crore (6%), RRBs with Rs Crore (6%) and Co-operative Banks with Rs Crore (3%). Under Agriculture Sector against the annual target of Rs.4, Crore for 4,19,015 beneficiaries, banks have disbursed total amount of Rs Crore in favour of 1,94,154 beneficiaries upto 31 st March 2015 registering achievement of 69% in financial terms and 46% in physical terms. Under Micro & Small Enterprise s Sector against the annual target of Rs.4, Crore for 1,43,623 beneficiaries, banks have disbursed an amount of Rs.4, Crore in favour of 1,11,727 beneficiaries upto 31 st March 2015, thereby registering an achievement of 109% in financial terms and 80% in physical terms. Under Education Sector against the annual target of Rs Crore in favour of 14,024 beneficiaries banks have disbursed an amount of Rs Crore in favour of 4,366 beneficiaries upto 31 st March 2015, achieving 17% of target in financial terms and 31% in physical terms. Under Housing Sector against the annual target of Rs.2, Crore favouring 38,771 beneficiaries banks have disbursed total amount of Rs Crore in favour of 25,381 beneficiaries upto 31 st March, 2015, achieving 34% in financial terms and 65.46% in physical terms. 97 th meeting of J&K SLBC 2

4 Credit Deposit Ratio (CD Ratio) Mr. Mushtaq Ahmad stated that Credit Deposit Ratio of the State has reached 46.23% as on He attributed the improvement of nearly 2% in the C. D. Ratio of the State as compared to the previous FY ( ) to the comparatively higher growth (13.39%) in advances than the growth achieved in deposits (9.37%). Commenting on the bank-wise position of CD Ratio, the Chairman, J&K Bank stated that during the period under review the CD Ratio of J&K Bank has improved by 3.56% from 43.92% as on to 47.48% as on , whereas C.D. Ratio of SBI has declined by 0.67% from 51.10% as on to 50.43% as on and that of PNB has declined by 7% from 34.67% as on to 27.67% as on He stated that CD Ratio of RRBs has improved by 1.95% from 43.73% as on to 45.68% as on while as in respect of Co-operative Banks it has improved by 1.52% from 34.78% as on to 36.30% as on Credit flow under Government Sponsored Schemes Highlighting the progress on implementation of the Government Sponsored Schemes, Mr.Mushtaq Ahmad stated that against the target of Rs Crore for 24,230 beneficiaries for all banks operating in the State, the achievement at the end of March 2015 under five major Government Sponsored Schemes, viz. NRLM, PMEGP, NULM, JKSES and SC/ST/OBC has been of the order of Rs Crore spread over 9,028 beneficiaries, thereby registering a performance of 47% in financial and 37% in physical terms against 59% achievement in financial & 34% in Physical terms as on corresponding date of the previous financial year. He pointed out that the unsatisfactory achievement under Government Sponsored Schemes has always remained an issue of concern for J&K SLBC. He, however, expressed optimism that the mutual cooperation and coordination between Government agencies and Banks, by actively and adequately participating in such programmes shall go a long way in ensuring noteworthy performance under this segment. The Chairman/CEO, J&K Bank stated that while banks have been playing a significant role in the economic development of the State, the banks continue to face difficulties in recovery of loans, particularly those disbursed under Government Sponsored Schemes. He therefore, requested the State Govt. to remove the disabling factors for facilitating loan recovery & creating a responsive credit climate in the State, which he said, would help banks to improve debt recovery from the willful defaulting borrowers. Address by the Chief Guest Dr. Haseeb A. Drabu, Hon ble Finance Minister, J&K State The Hon ble Finance Minister J&K State, Dr. Haseeb A. Drabu, in his address to the forum outlined that the only thing the State Government has ever talked about in SLBC is the Credit Deposit Ratio of the banking sector in the State. He stressed that the forum should rather look at the financial structure of the State and the banking activity consequent to that financial structure. Elaborating his view point he stated that C. D. Ratio is not a cause but a consequence of some other activity. Exhorting the house not to focus on the symptoms but on the disease, which he said was both systemic as well as structural, he stated that unless a proper structure and a certain modality of lending is put in place, the C. D. Ratio will not 97 th meeting of J&K SLBC 3

5 97 th meeting of J&K SLBC 4 improve. He stressed need for constituting a sub-group of the SLBC to look for the new financial architecture for J&K State. Commenting on the existing financial structure of the State, Dr. Drabu stated that there are about six layers of financial institutions operating in the State, which included J&K s own State Owned Private Bank, i.e. the J&K Bank being in the first layer, the Public Sector Banks which have been operating in the State since long with a large network of branches form the 2 nd layer of the financial institutions in the State. In the 3 rd layer are the new generation private sector banks, which have a different focus, a different format and a different management style. The Cooperative Banks happen to form the 4 th layer, RRBs the 5 th layer and the SFC and DFC forming the sixth layer of financial institutions. Dr. Drabu stressed upon the need to combine all these six layers of financial sector in the State, which he stated would eventually give the State an economy that is financially well intermediated. Recognizing the position and the dominating role of J&K Bank in J&K State, Dr. Drabu conceptualized some specific synergy within the existing financial sector in the State and desired that J&K Bank should explore the possibilities of building a credit portfolio, breed it for some time, season it, do the rating inside and across and then sell it to some Public Sector or Private Sector Banks operating in the State who may not have expertise to lend in some specific sectors or areas. He desired that RRBs, which are operating in the State since long with a vast network of rural branches, should take on the role of genuine MFIs. Similarly the Cooperative Banks could focus on being the only financers of the Self Help Groups or the Joint Liability Groups in the State. Citing an example, Dr. Drabu stated that if the Constituency Development Fund of the State Legislators is deposited in the Regional Rural Banks, it would give the RRBs a certain role and would build a lot of business for them and will change their entire functioning. Similarly, in the case of SFC and the DFC, which have not been doing well, he stressed that SLBC being the forum of collective stakeholder-ship should look for earmarking a certain specific segment, so that these financial institutions would also be able to contribute towards economy of the State. Dr. Drabu impressed upon the banking sector to strive for changing the methodology of lending and work for business based and turn-over based lending rather than the balancesheet based / asset based lending. Stressing the need to synergize private lending and the public expenditure, Dr. Drabu pointed out that under the present circumstances the District Credit Plans are being prepared and approved without any proper direction. He stated that the institutional mechanism of the Government for building a District Plan is done by the District Development Board which is chaired by the Chief Minister or other ministers. Given the emerging realities of how development is being financed, the District Development Plan will have two components the regular public expenditure component which the Government is going to put into the district and the layer of the private funding component from the banks, thus forming the public-private participation expenditure. So, with the intention and objective of bringing together the financial services sector and the Government, he said the Credit Plan of the District will be discussed in the District Development Board meetings, so that in a period of 5 years from now, wherever private investment is lacking, public expenditure will supplement it. For example, in District Srinagar, which has a high degree of private lending, the need for public expenditure may be low, but in a district like Kupwara the public expenditure would be

6 97 th meeting of J&K SLBC 5 higher than the private lending. He stated that with a little bit of incremental effort and a little bit of understanding and interacting with decision making bodies in the Government, the District Credit Plans shall get executed well with better results. Emphasizing upon the need to create a culture of Public-Private participation, Dr. Drabu stated that there may be some projects which we may want to approve but we do not have funding for these and we may provide some equity support to it and the banks provide the debt part of it, which would lead to a robust system of consortium lending, whereby equity comes from Government of J&K and debt comes from the banking sector, with J&K Bank being the lead member of that consortium and other banks would be the participating members, which would result in a higher level of lending comfort for the banking sector. Commenting upon the impact of the devastating floods, Dr. Drabu stated that the devastation has been so large that as much we do will not be enough. He stated that whenever such a devastation takes place, banks cannot take a hit on their balance sheets. Therefore, recently in a meeting with the Governor, RBI, he has proposed that whatever banks do in terms of restructuring, remissions etc. for the borrowers affected by the devastating floods, should qualify as CSR for the banks, so if a certain amount of money is given up by the banks as the interest remission, that amount of money should qualify for CSR. Apart from this, he has also proposed to the Government of India that for 2 years post-disaster the entire lending in J&K should be declared as the priority sector lending. Regarding the role of banks in relief and rehabilitation of flood- affected, he said the financial institutions should focus more on liability management of borrowers than on assets. Dr. Drabu said that though RBI has through a Circular already advised for cutting the paper work while taking measures for relief and rehabilitation, yet these instructions need to be implemented in letter and spirit, as he has been receiving enormous representations that the paper work has not been reduced. Commenting on the delegation of powers vested with the Branch Heads and the Controlling heads of Public Sector and Private Sector Banks operating in J&K State, Dr. Drabu stressed upon the banks to review the same so that they will be adequately empowered to decide the proposals locally rather than taking approvals for specific things every time from their corporate offices. Regarding implementation of SARFAESI Act, Dr. Drabu stated that previously it had been decided that the State shall have its own SARFAESI Act on the lines of the national SARFAESI Act. J&K Bank had last time prepared the draft for such Act which was then forwarded to the State Government for further action. He further stated that he had proposed setting up of an Asset Reconstruction Company (ARC) funded by the State Government and the J&K Bank as the owners with SBI and others contributing to it. Dr. Drabu assured the house that he will speak to the Hon ble Law Minister on the subject and see further course of action in the matter. However, he expressed readiness of the State Government to provide all possible comfort to the banks till such time as the empowered Legislative Assembly of J&K passes the J&K SARFAESI Act. Regarding impairment of assets of banks, Dr. Drabu stated that in the current situation there was need to look at the two categories of impairment, i.e. business impairment that has happened in the normal course and the flood-related impairment of assets and these need to be treated separately in terms of the classification in prudential norms, for which RBI will

7 have to take a view. Stressing that the banking sector is becoming more fragile because of impairment of assets and realizing that no banking system can survive with the higher impairment of assets, Dr. Drabu expressed that the Government of J&K will be happy to extend all possible help in terms of legislative procedures, administrative approvals, so that the framework is put in place for the banks to effect recoveries. He impressed upon the banking sector to build a robust credit history of the borrowers, which can be made available to everybody. While stressing for making SLBC meetings smaller, focused and theme- based, Dr. Drabu stated that if we have 5 key issues, we could have 5 theme-based SLBCs to deliberate upon and have focused attention on those key issues. In this regard Dr. Drabu advised that the first theme-based SLBC should be convened for deliberating upon the issue of Self Help Group (SHGs) in J&K State, which will also focus on Joint Liability Group (JLG) lending and expressed the hope that by doing so we could open up a new credit line in the State. (Action: J&K SLBC Secretariat) Power Point Presentation: A Power Point Presentation encompassing the achievement of banking sector in J&K State under lending to priority sector, non-priority sector, Government Sponsored Schemes viz-aviz the Annual Credit Plan, priority programmes of Government of India like financial inclusion plans and other social security schemes with reference to 31 st March, 2015, was made by Mr. S. K. Bhat, President (J&K SLBC/Strategy & Business Dev.), J&K Bank. The Power Point Presentation was quite interactive and excited a good discussion. This was followed by exhaustive review on performance by the banking sector in the State. The same have been captured and mentioned item-wise under respective agenda items hereafter. Thereafter, agenda of the meeting was taken up for deliberations as under: SEGMENT- 1 (REVISION) CONFIRMATION OF MINUTES OF 96 th MEETING OF J&K SLBC As no amendments to the minutes of the 96 th meeting of J&K SLBC held on 23 rd February 2015 were received from any quarter, the house confirmed the minutes. FOLLOW-UP OF ROLLED OVER ACTIONABLE POINTS OF PREVIOUS SLBC MEETINGS: A) LEGISLATING SARFAESI ACT: As already mentioned, the Hon ble Finance Minister in his address to the house stated that previously it had been decided that the State shall have its own SARFAESI Act on the lines of the national SARFAESI Act. J&K Bank had prepared the draft for such Act which was then forwarded to the State Government for further action. Dr. Drabu assured the house that he will speak to the Hon ble Law Minister on the subject and see further course of action in the matter. However, he expressed readiness of the State Government to provide all possible comfort to the banks till such time as the empowered Legislative Assembly of J&K passes the J&K SARFAESI Act. (Action: J&K Govt.) 97 th meeting of J&K SLBC 6

8 B) Inclusion of chapters on financial Education in the School Syllabus: 97 th meeting of J&K SLBC 7 The Commissioner/ Secretary Finance, Mr. Navin Choudhary pointed out that despite the directions having already gone to the Directorate of School Education, nothing positive had happed in the matter. After a brief deliberation Reserve Bank of India was asked by the house to provide some 4-5 chapters of text on Financial Inclusion, so that the same could be forwarded to the Directorate of School Education for inclusion of the same in the syllabus of the schools. (Action: RBI / J&K Govt.) C) Printing of Agricultural Credit/ KCC application forms by J&K Bank sharing of expenditure by other banks on pro-rata basis: The Chairman, J&K Bank stated that while J&K Bank, SBI, PNB, EDB, Oriental Bank of Commerce and J&K Grameen Bank had already paid their respective shares, it was quite embarrassing to note that despite lapse of a long period HDFC Bank, Central Bank of India and Punjab & Sind Bank were yet to pay the same to the SLBC. He expressed optimism that the said banks will clear their outstanding dues without any further delay. (Action: HDFC Bank/ CBI/ P&SB) D) Setting up of Farmers Training Centre (FTC) in J&K State: The Chief General Manager, NABARD pointed out that there is no initiative on this issue from any bank. He stated that NABARD has been discussing the issue independently with the concerned banks but so far nothing positive has happened. He further stated that only Punjab National Bank had shown some interest in setting up the Farmers Training Centre at Jammu, but there has been no forward movement on their side too owing to non-availability of land. The State Government was requested to take necessary measures for allotment of land to the concerned banks for the purpose. (Action: J&K Govt. /J&K Bank / SBI / PNB) Meetings of Sub-Committees of J&KSLBC and other meetings held during FY : The house placed on record that 11 meetings of various Sub-Committees of J&K SLBC and other meetings were convened during the FY AGENDA ITEM NO: SEGMENT- 2 (SPECIAL AGENDA POINT) J&K FLOODS 2014-(RECOMMENDATIONS PUT FORTH BY J&K SLBC FOR RELIEF, REHABILITATION, REVIVAL AND RESTRUCTURING OF VARIOUS TYPES OF CREDIT FACILITIES IN THE AREAS AFFECTED BY NATURAL CALAMITY). Chairman, J&K Bank (Convenor J&K SLBC) appreciated the role played by all the agencies including the banks, IBA, State Government and RBI during the hour of crises after the devastating floods hit the State in September last and stated that RBI without any loss of time issued approval to the special package envisaged by J&K SLBC for rehabilitation of the affected people.

9 Giving details of the progress made by the banks under the package the Chairman J&K Bank stated that pursuant to the said special package formulated by J&K SLBC for rehabilitation of the people effected by last year s devastating floods, the banks in J&K State have received 30,035 applications for rescheduling/restructuring of existing loans and issuance of fresh credit, out of which 27,059 applications involving an amount of Rs.1, Crore have been processed/ sanctioned. Banks have disbursed credit amounting to Rs.1, Crore in favour of 22,671 applicants upto the said period. The position was taken on record. AGENDA ITEM NO: SEGMENT- 3(FINANCIAL INCLUSION/ THRUST AREAS) FINANCIAL INCLUSION PLAN (FIP) OF J&K STATE: (I) PROVISION OF BANKING SERVICES TO VILLAGES WITH POPULATION BELOW 2000 (II) PRADHAN MANTRI JAN DHAN YOJANA (PMJDY) PROVISION OF BANKING SERVICES TO VILLAGES WITH POPULATION BELOW 2000: The Convenor, SLBC stated that providing banking services to 5582 identified villages having population below 2000 in J&K State, to be covered during , , upto 14 th August 2015 as per the new timeline set by RBI, is under implementation and against the target of 1504 villages set for the current financial year, banks have covered 1585 villages upto the end of March 2015 constituting 105% of the target for the year. Against the cumulative target of covering 4077 villages for the FYs , and banks have covered 4,319 villages thereby achieving 106% of the cumulative target. Mr. Mushtaq Ahmad, Chairman/CEO, Convenor Bank, emphasized that FIP participating banks should draw a roadmap for achieving their respective cumulative targets under FIP Phase-II upto 14 th August 2015 which is the new timeline set by RBI for providing 100% coverage of the unbanked villages with population less than 2000 as per census of (Action: Concerned FI participating Banks) PRADHAN MANTRI JAN DHAN YOJANA (PMJDY) : The house placed on record that under Pradhan Mantri Jan Dhan Yojana which has been launched in a mission mode across the Country, banks in J&K State have opened lakh fresh accounts upto 11 th May 2015 and issued RuPay Debit Cards to lakh beneficiaries. AGENDA ITEM NO: IMPLEMENTATION OF ELECTRONIC BENEFIT TRANSFET (EBT) SCHEME IN J&K STATE: The Convenor, SLBC (Chairman, J&K Bank) informed the house that in the first phase the scheme has been implemented in six pilot districts of the State i.e. Srinagar, Ganderbal, Jammu, Rajouri, Kargil & Leh and benefits under IGNOAPS have been transferred into the accounts of beneficiaries successfully. 97 th meeting of J&K SLBC 8

10 97 th meeting of J&K SLBC 9 As regards implementation of EBT Scheme in other districts of the State and coverage of other social security schemes under EBT Scheme, the representative of IT Department, J&K Government stated that the data validation in respect of remaining 16 Districts is under process and these districts shall be covered under the scheme very soon. Giving the progress on the number of accounts validated, he stated that out of 1,15,326 accounts received from various banks for validation 1,01,439 accounts have been validated upto 28 th April 2015 and expressed optimism that the remaining accounts shall be validated soon. (Action: J&K Bank) AGENDA ITEM NO: % COVERAGE OF FARMERS IN J&K STATE UNDER KISSAN CREDIT CARD (KCC) SCHEME: Regarding GoI, MoF initiative for 100% coverage of farmers under Kissan Credit Card Scheme the Chief Secretary, J&K Government Mr. M. I. Khanday pointed out that in terms of the decision taken in the last (96 th ) SLBC meeting the banks were expected to complete 100% coverage by the end of March, 2015, but that has not happened. The Chairman, J&K Bank (Convenor, J&K SLBC) Mr. Mushtaq Ahmad informed the house that upto the end of March % of the revised target of 9.81 lakh farm operating families had already been achieved by the banks in J&K State. Giving details the Chairman elaborated that banks have sanctioned 8,41,879 KCCs in J&K State. Out of these 7,17,576 KCC cases have been disbursed credit to the tune of Rs.5, Crore. This includes 7,26,540 KCC cases sponsored by Agriculture Department, J&K Govt. to various banks operating in the State and 3,11,235 KCC cases taken up by the banks directly. Out of the KCC cases sponsored, 1,93,610 cases have been rejected while 2,286 cases are pending with banks. The Hon ble Finance Minister, Dr. Haseeb A. Drabu suggested that banks should convert all their Agricultural Cash Credit accounts into KCC, which will result in providing benefit of interest subvention to the borrowers, who will get used to the KCC facility. It was noted by the house that during the quarter ended March, 2015 only KCCs have been issued by the banks against the target of 1.61 KCCs (i.e. the shortfall from the target of 9.81 lakh farm operating families), which was not satisfactory. The house unanimously decided that the target of 100% coverage under KCC should be accomplished by the concerned banks by the end of September (Action: All Member Banks / Agriculture Deptt., J&K Govt.) The Chief Secretary, J&K State desired to know status regarding the decision taken in the last SLBC meeting that Sericulture Sector would also be brought under the KCC purview and the farmers under Sericulture sector be also extended KCC facility. The DGM, NABARD Mr. D.K.Kapila informed that the scheme is being worked on by the Sub-group of SLBC constituted for the purpose comprising members from NABARD, Sericulture Department, J&K Govt. and major banks operating in the State. He stated that the scheme for bringing the Sericulture Sector within the purview of KCC Scheme shall be submitted to the SLBC soon for implementation. (Action: NABARD / Sericulture Deptt., J&K Govt.)

11 AGENDA ITEM NO Branch Expansion Plan of banks in J&K State: The Chairman, J&K Bank stated that the Branch Expansion Plan for J&K State for the FY stood at 264 branches which included backlog of 115 branches, out of which, 83 branches were required to be opened in the identified unbanked rural centers, which work out to 32% of the total branches planned to be opened during the financial year against the regulatory requirement of 25%. Against the said BEP target of 264 branches, the banks have opened 76 branches during the FY thereby registering achievement of 29%. The house also noted that out of 76 branches, 39 branches have been opened by J&K Bank alone, 11 branches by JKGB, 8 branches by HDFC Bank, 8 branches by ICICI bank, 2 branches each by PNB, Andhra Bank and OBC, and one branch each by SBI, SBP,IDBI Bank and Corporation Bank. The House also noted that EDB, Axis Bank, ACC Bank, Dena Bank, IOB and Urban Cooperative Bank have not opened any branch during the FY The progress was not considered as satisfactory. Banks were advised by the house to include the backlog of the FY in the Branch Expansion Plan for the FY and expedite submitting the same to the SLBC Secretariat for which a communication has already gone to all the banks on and ensure opening of new branches in the State as per the said Plan, besides ensuring regulatory requirement of opening 25% of total BEP in the unbanked villages having population < (Action: All Member Banks) AGENDA ITEM NO: SETTING UP OF FINANCIAL LITERACY CENTERS (FLCs) IN J&K STATE PROGRESS ACHIEVED AS ON : The House noted that Financial Literacy Centres (FLCs) operational in all the districts of the State, which include 12 FLCs managed by J&K Bank and 10 FLCs managed by SBI as per their Lead Bank responsibility, are organizing Financial Literacy Camps smoothly and during FY , a total of 1169 Financial Literacy Camps were organized in which 76,960 persons have participated. The house noted with satisfaction that activities undertaken by all the 22 FLCs during the FY , have facilitated the credit linkage of 5,692 persons out of which 3,879 persons have started their business ventures. FINANCIAL LITERACY INITATIVES BY RURAL BRANCHES OF BANKS: The house also placed on record that 891 rural branches of 19 banks operating in the State have conducted 1,729 financial literacy camps during the FY in which 62,515 participated, against the target of holding 2,673 camps constituting around 65%, which was not considered satisfactory by the house in view of the RBI guidelines, which stipulates holding of at least one camp per rural branch per month. It was noted with displeasure that rural branches of UCO Bank, Indian Bank, HDFC Bank and Yes Bank have not conducted any financial literacy camps during the FY The controlling offices of the banks were advised to issue suitable directions to all their rural branches operating in J&K State for strict compliance of the regulatory guidelines in this regard. (Action: All Member Banks) 97 th meeting of J&K SLBC 10

12 The Commissioner/ Secretary Finance, J&K Govt. proposed that in order to ascertain the effectiveness of the Financial Literacy Camps operating in the State in providing financial awareness to the people, Reserve Bank of India should undertake a study, so that necessary corrective measures, if needed, are initiated to ensure that the people of the State are benefited. (Action: Reserve Bank of India) AGENDA ITEM NO: SETTING UP OF RURAL SELF- EMPLOYMENT TRAINING INSTITUTES (RSETIs): The house placed on record that against target of holding 362 programmes covering 10,045 candidates for FY RSETIs in J&K State have organized 327 programmes upto 31 st March 2015 wherein 9,103 candidates have been provided training thereby achieving 91% of the target. J&K Bank RSETIs have conducted 797 training programmes from their inception upto 31 st March 2015 in which 14,707 persons have been provided training. Similarly SBI RSETIs conducted 353 programmes during the same period which benefited 8,092 persons. Of the total 22,799 persons trained in 850 programmes conducted by all the RSETIs operating in J&K State since their inception upto 31 st March 2015, 13,777 persons after attending training programmes have settled, which constitutes 60% of the total persons trained upto 31 st March 2015 out of which 4,332 persons have availed finance from various banks, 5,826 persons have started their enterprises by utilizing their own resources and the remaining 3,619 persons have opted for wage employment. However, the house expressed concern over the report of the State Coordinator, RSETIs that RSETI set up by State Bank of India in District Kargil has not been functioning for some time. Accordingly the representative of SBI was asked to clarify the position. The DGM, SBI confirming the report informed the house that pursuant to the instructions from SBI Corporate Centre the RSETI Kargil had been abandoned as the SBI would not be getting any funds from GoI for this RSETI, as such, the same would be combined with the RSETI Leh. The reason put forth by the DGM, SBI for closure of RSETI Kargil was not found tenable by the house as the allotment of one-time grant assistance from Ministry of Rural Development, Government of India was subject to the allotment of land for the RSETIs by the State Government in terms of the GoI guidelines and till date none of the RSETI had been allotted land by the State Government as a consequence allotment of funds from GoI was pending for all the RSETIs in the State. Accordingly, State Bank of India was advised to take necessary measures for operationalizing RSETI in district Kargil forthwith. (Action: State Bank of India) 97 th meeting of J&K SLBC 11

13 STATUS REGARDING ALLOTMENT OF LAND BY STATE GOVERNMENT TO RSETIs: The house was informed that so far land has been allotted by the Government to RSETI Leh only whereas in respect of other 21 districts the land has been identified but formal allotment of the same to the concerned RSETIs is still pending. The concerned department of the State Government was advised to look into the matter and facilitate the handing over of the land to the sponsoring banks so that the process of raising the infrastructure for RSETIs in all the 22 Districts could be initiated. (Action: Rural Dev. Deptt., J&K Govt.) SEGMENT- 4 (PEREFORMANCE REVIEW OF BANKING SECTOR) AGENDA ITEM NO: CREDIT FLOW TO PRIORITY SECTOR: BANK-WISE/ SECTOR-WISE/ REGION-WISE ACHIEVEMENTS IN LENDING TO PRIORITY SECTOR UNDER ANNUAL CREDIT PLAN POSITION AS AT THE END OF MARCH 2015: The house recorded that as on 31 st March 2015 banks have extended total credit of Rs.16, Crore in favour of 5,04,256 beneficiaries (both under Priority as well as Nonpriority Sector) against target of Rs.19, Crore for 8,83,458 beneficiaries under Annual Credit Plan , thereby registering achievement of 84.46% in financial terms and 57% in physical terms. Aggregate credit disbursement as on 31 st March 2015 under ACP includes Priority Sector credit of Rs.9, Crore disbursed by banks in favour of 3,74,083 beneficiaries against the target of Rs.12, Crore for 6,74,773 beneficiaries (72.41% achievement in financial terms and 55.44% in physical terms) and Non-priority sector credit of Rs.7, Crore in favour of 1,30,173 beneficiaries against target of Rs.7, Crore for 2,08,685 beneficiaries (104.40% achievement in financial terms and 62.37% in physical terms). With credit disbursement of Rs Crore to the Priority Sector Credit, J&K Bank has been the major contributor (share 69%) in financial terms followed by SBI with the contribution of Rs Crore (7%), PNB with Rs Crore (5,66%), RRBs with Rs Crore (5.82%), Co-operative Banks with Rs Crore (3%) and other Commercial Banks with Rs Crore (9.18%). Credit by Institutions: The house placed on record that under Priority Sector J&K Bank has recorded 89% achievement of its ACP target, PNB=63%, SBI=51%, Other Commercial Banks=73%, Coop. Banks=40% and RRBs 34% of the respective individual ACP targets. The house expressed displeasure that whereas J&K Bank has achieved 89% of its target for the FY , the performance of all other banks has remained quite dismal. Though 97 th meeting of J&K SLBC 12

14 operating under the same conditions/environment, Punjab National Bank had recorded achievement of 63%, State Bank of India 51%, RRBs and Cooperative Banks with their vast rural network have managed only 34% and 40% of their respective ACP targets, which was not at all satisfactory. The Commissioner/ Secretary Finance, Mr. Navin Chowdhary commenting upon the poor performance of SBI pointed out that being the Lead Bank in 10 out of 22 districts of the State, SBI is supposed to lead other banks at least in its 10 lead districts of Jammu and Ladakh regions. He impressed upon the bank to refine their strategy for J&K State. The Hon ble Finance Minister, J&K State, Dr. Haseeb A. Drabu sought reasons of dismal performance from SBI and PNB and also desired to know the strategies these two major public sector banks had devised for the J&K State. The DGM, State Bank of India informed and assured the house that SBI had devised a proper strategy to have focused lending under farm mechanization programme in Agriculture Sector and also under MSMEs for the State with big ticket size and expressed his optimism that SBI will be performing better this year. The representative of Punjab National Bank stated that this year they are expecting to lay more focus on the tourism sector in the State and also increase their lending under all other sectors. He assured that during the FY performance of PNB will be better. CREDIT BY SECTORS - Housing Sector / Education Sector The Hon ble Finance Minister observed that under Housing Sector the ticket size of lending has been quite small as against the targeted average ticket-size of Rs 6.32 lakh banks have provided coverage of Rs 3.26 lakh. Similarly under Education Sector against the targeted average ticket size of Rs 3.86 lakh banks have given only Rs 2.14 lakh. He stated that house should see the scope of tie-ups with various institutions in the country to ensure push in Education Loan segment and dovetailing the Housing sector disbursements with the Indhira Awas Yojana programme of Government of India to ensure push in the Housing Sector lendings and address the anamoly in disbursement of credit to thse sectors. The Chairman, J&K Bank stated that the ticket size lending under Housing and Education Sectors needs to be reviewed and scaled up to ensure that these two sectors get fair amount of credit. He pointed out the position prevailing 5-6 years back, the disbursements under Housing Sector used to be very good, but now this sector has been receiving comparatively less lending, which is indicative of some flaw or some problems in the credit process that need to be addressed. After thorough deliberations it was decided to constitute a Sub-group of J&K SLBC on Housing and Education Sectors, which shall comprise of J&K Bank, SBI, PNB, NABARD and National Housing Bank. The Sub-group will meet within the next month and finalize the strategy for increasing the lending under these two important segments of the priority sector. (Action: J&K SLBC/ J&K Bank/ SBI/ PNB/ NABARD/ NHB) 97 th meeting of J&K SLBC 13

15 97 th meeting of J&K SLBC 14 Besides, all the banks operating in the State were advised to fulfill all their credit commitment under ACP and have a special focus on Education & Housing which have not registered encouraging progress during the previous financial year. (Action: All Member Banks) AGENDA ITEM NO: CREDIT UNDER GOVERNMENT SPONSORED SCHEMES: The house noted that against Annual Action Plan target of Rs Crore for 24,230 beneficiaries for all banks operating in the State, the achievement at the end of March 2015 under five major Government Sponsored Schemes, viz. NRLM, PMEGP, JKSES, NULM and SC/ST/OBC is of the order of Rs Crore spread over 9,028 beneficiaries in all the three regions of the State thereby registering an achievement of 47% of the target in financial and 37% in physical terms against 59% achievement in financial & 34% in Physical terms as on corresponding date of the previous financial year. The House observed that the achievement has not been satisfactory and all stake holders were advised to improve the position under this vital segment. J&K Self Employment Scheme (JKSES) It was observed that the performance of banks under the scheme is very poor. The Secretary, Labour & Employment Department, J&K Govt. pointed out that the targets for J&K Self Employment Scheme as are presented in the Agenda are being fixed as per their own assessment but the Employment department has its own constraints which lead to change in targets based on the actual allocation of funds allotted by the Finance Department. He requested the house that targets under the scheme be fixed which are in consonance with the actual allocations of margin money/subsidy from the Government. The Chairman, J&K Bank (Convenor, J&K SLBC) observed that the issue was also discussed in the previous meeting of SLBC wherein it was clarified that the targets under the scheme are being finalized at the district level in the DCC meetings chaired by the respective District Development Commissioners, where representatives of the Employment Department happen to be present, who should deliberate this issue there and ensure finalization of targets based on the actual allocations from the Government. He advised that Secretary, L&E should ensure that details of district-wise allocation of margin money/ subsidy, as available to the Government, is made available to the SLBC Secretariat, so that targets under the scheme are finalized accordingly. (Action: Labour & Employment Deptt.; J&K Govt.) Prime Minister s Employment Guarantee Programme (PMEGP) The Financial Commissioner, Industries & Commerce Department, Mr. Khurshid Ahmad Ganai stated that the PMEGP Scheme is being administered through the three agencies, viz. District Industries Centres, Khadi & Village Industries Board and the Khadi & Village Industries Commission (the nodal agency of GoI). He pointed out although the scheme has been running well, yet it had been observed that sanctioning of cases under the scheme is being fairly delayed and most of the cases are being sanctioned towards the end of the financial year, which has come out to be one of the major constraints and needs to be addressed.

16 97 th meeting of J&K SLBC 15 The Financial Commissioner, Ind.& Commerce further stating that the PMEGP Scheme is a good scheme where upper limit of the loan is Rs lakhs, requested the Government to explore the possibility of contributing towards the margin money allocation for the Scheme, so that maximum number of cases can be accommodated under the scheme. The Secretary, KVIB Mir Afroz, joining deliberations on the issue raised a number of issues with regard to PMEGP scheme. Elaborating his point, he stated that there are many cases wherein the margin money has been adjusted by the banks wherein the units were not existent at all, which, he said, is in violation of the relevant guidelines of the scheme. He further stated that after physical verification of the units is done and adjustment letters issued by the concerned sponsoring agency, it is only then the margin money has to be adjusted, but in certain cases the margin money has been adjusted by the banks without issuance of adjustment letters. Concluding the deliberations on the issue the Hon ble Finance Minister advised that individual Governmental departments should give their plans to the government with all relevant details so that the government could consider earmarking funds for all the Government sponsored schemes in the budget itself. The house emphasized upon all banks operating in the State and the concerned sponsoring agencies to make concerted efforts to ensure that during the CFY the performance under all these Government Sponsored poverty alleviation and employment generation Schemes is substantially improved (Action: All Member Banks/ KVIB/ KVIC/ DICs) Enquiring about the position of NPAs in Govt. Sponsored Schemes the Hon ble Finance Minister advised that in order to monitor the performance under these schemes it is imperative to check the defaults under these schemes. It was decided that henceforth the NPAs of all the banks under various Government Sponsored Scheme shall be included in the SLBC agenda for deliberation by the house. (Action: All Member Banks/SLBC Secretariat) AGENDA ITEM: PERFORMANCE UNDER HANDICRAFTS/ HANDLOOMS: The house placed on record that as against target of Rs Crore for 26,308 beneficiaries set for banks under this sector for the FY , banks have disbursed an amount of Rs Crore to 13,284 beneficiaries upto the end of March, 2015, which includes 2012 sanctioned cases of previous financial year, indicating an achievement of 45% in financial terms and 50% in physical terms. The achievement was not considered as satisfactory and all the stakeholders, viz. banks and the sponsoring agencies were advised to put in strenuous efforts to ensure that during the CFY ( ) performance un the schemes is substantially improved. (Action: All Member Banks/ Handicrafts/ Handloom Deptt. J&K Govt.)

17 AGENDA ITEM: MONITORING OF FLOW OF CREDIT FOR LIVESTOCK AND FISHRIES SECTOR: Progress achieved by the Banks in delivering credit to livestock and fisheries Sector as at the end of March 2015 was taken on record. AGENDA ITEM: ACHIEVEMENT UNDER SELF HELP GROUP (SHG): The house placed on record the cumulative position of SHGs formed in J&K State upto the end of March 2015 which stood at 14,067, out of which 9,272 SHGs were credit-linked involving a total amount of Rs Crore. The house observed that the position is not satisfactory and advised all the banks and concerned government agencies to take necessary measures so that the position improves during the Current Financial Year. (Action: State Mission Director, SRLM/ NABARD/ All member banks) AGENDA ITEM NO: RAJIV RINN YOJANA (RRY) MODIFIED FORM OF INTEREST SUBSIDY SCHEME FOR HOUSING THE URBAN POOR (ISHUP): The house placed on record that under the Rajin Rin Yojana (RRY) against target of Rs Crore for 2,010 beneficiaries set for FY , banks in J&K State have disbursed an amount of Rs.3.77 Crore to 120 beneficiaries upto the end of March 2015, which includes 27 sanctioned cases of previous year indicating an achievement of 4% of financial targets and 6% of physical targets. AGENDA ITEM: BANK CREDIT AT A GLANCE (OVERVIEW OF CREDIT SCENARIO IN J&K STATE) STATISTICAL DATA OF VARIOUS BANKS IN J&K STATE AS AT END OF MARCH 2015: The Chairman, J&K Bank (Convenor SLBC) informed the house that total advances of all banks operating in the State as on 31 st March 2015 stood at Rs.36,508 Crore against Rs.32,196 Crore as at the corresponding period of previous year thereby recording YoY growth of 13.39% while as the total deposits in the State as on 31 st March 2015 stood at Rs.78, Crore against Rs.72, Crore as at the corresponding period of the previous year thereby indicating YoY growth of around 9.36%. As a result of this healthier credit growth the C. D. Ratio of the State has significantly improved from 44.58% as on 31 st March 2014 to 46.23% as on 31 st March 2015, which is encouraging. Commenting on the credit sharing by major banks in the State, Chairman, J&K Bank highlighted that J&K Bank has the highest share of Rs.23, Crore comprising over 63% of the total outstanding credit of Rs.36, Crore in the State as at the end of March 97 th meeting of J&K SLBC 16