LEAD BANK SCHEME IN THE UNION TERRITORY OF PONDICHERRY

Transcription

1 CHAPTER VI LEAD BANK SCHEME IN THE UNION TERRITORY OF PONDICHERRY 6.1 Introduction The preceding chapter outlined the progress of banking sector in the Union Territory of Pondicherry in general terms. This Territory is also covered by the Lead Bank Scheme (LBS) as every other district of the country. The implementation of this scheme has added to the strength of banking sector in the Union Territory. The PSL about which this thesis is concerned, has made rapid strides thanks to the LBS. This chapter deals with the multifaceted growth of LBS in the Union Territory of Pondicherry. LBS has come as a panacea for the Union Territory of Pondicherry after nationalisation of banks as it is devised to be a boon to the target groups and other weaker section beneficiaries to employ themselves in the productive process in various avocations by availing the critical input, namely, the credit from commercial banks at comparatively a cheaper rate of interest. In the union Territory of Pondicherry, LBS as PSL programme has been going on smoothly fiom the seventies as in other districts of various States and union Territories. 6.2 Implementation of Lead Bank Scheme in the Union Territory of Pondicherry The entire Union Territory of Pondicherry is treated as a single revenue district. Indian b& has been designated as the Lead Bank which formulates the District

2 Credit Plan(DCP)/Annual Credit Plan (ACP) for the union Territory of Pondicherry. The efforts of the State Government in implementing various plan, Centrally Sponsored / Central Sector Schemes besides Externally Aided Projects are supplemented by the credits made available by commercial banks under the aegis of DCP/ACP. While preparing the above credit plans, apart from Commercial banks, funds are made available by the PSCB, PLDB and PIPDIC. The entire outlay provided under the DCPJACP is treated as Priority Sector Advance (PSA). Since the introduction of Service area approach, the coinrnercial banks operating within the sewices area used to concentrate on the felt (credit) needs of the population to promote their economic well being. Some definite improvements have taken place in the Service area concept despite many operational problems in the Union Territory of Pondicherry. The implementation of the LBS is monitored through different fora as indicated below: a) Block Level Bankers' Committee (BLBC) - to meet once in a quarter in each block. b) Standing Committee or Sub-committee - to meet once in two months. c) State Level Bankers' Committee (SLBC) - to meet once in a quarter. d) State Level Review Committee (SLRC) - to meet at half yearly intervals. The banks operating within the block would become members of the BLBC with the Lead Bank Officer as Chairman. The meeting of the BLBC is to be attended by officials from RBI and NABARD. Government sponsored schemes like IRDP, PMRY are taken up for review in this forum as a part of Lead Bank review.

3 Some relevant poverty alleviation programmes like IRDP and PMRY are reviewed once in two months in a sub-conim~ttee of the SLBC known as Standing Committee. The departments actually involved in the process of implementation of the schemes are called for the meeting, besides major banks operating in the Union Terntory of Pondicherry Officials from RBI and NABARD are associated to assess the progress of the on going programmes. Six meetings are normally conducted by the Lead bank in a year. To take care of the regional credit requirements, one meeting each is normally conducted in Karaikal, Mahe and Yanarn regions besides three meetings in Pondicherry region. Next comes the SLBC which meets once in a quarter. Normally four meetings are convened in a year, In this committee, all the schemes included under the ACP are reviewed. This is a very usekl forum in the sense that all the decision making persons both at the bank and Government level are involved which reduces the time gap of decision making process. This is a forum wherein the actual problems faced by the bankers and the departments are focussed and solutions found. Then, there is the SLRC which meets once in six months. Two meetings are conducted in a year. Members of the Legislative Assembly and the Member of Parliament are involved besides all the members included in the SLBC. This is a forum wherein recommendations are made on broader areas and these recommendations are implemented by banks and the relevant departments. 6.3 Service Area Credit Plan ( SACP) SACP of the Lead bank is implemented in all the revenue villages of the Union Territory of Pondicheny by allocating these revenue villages to various commercial bank branches as shown below:

4 TABLE 6.1: SERVICE AREA ALLOCATION OF VILLAGES IN THE UNION TERRITORY OF PONDICRERRY $1. No. Name of the Bank branch Name of the Villages allocated (1) (2) (3) PONDICHERRY REGION 0 1 Indian Bank, Maducarai 1. Maducarai 02 Indian Bank, Kariamanickam 1. Eripakkam 2, Kariamanickarn 3. Madagadipet 4. Kalitheerthalkuppam 2. Pandasozhanallur 3. Panay adikuppam 4. Manakuppam State Bank of India, 1. Embalam Karikkalampakkarn. 2. Karikkalarnpakkam 3. Perungalur 4. Abishegapakkam 5. T.N,Palayam 05. Indian Bank, Villianur, 1. Villianur (Semi-urban) 2. Koodapakkam 3. Mangalam 4. Ramanathapuram 06. United Commercial Bank, 1. Villianur (Semi-urban) Villianur, 2. Odiampet 3. Kompakkam 07. Indian Bank, Ariyur. 1, 2. Thirubuvanai Sanyasikuppam 3. Thiruvandarkoil 4. Sathamangalam 5. Keezhur 6. Ariyoor 08, Indian Bank, Katterikuppam Santhaipudukuppam Suthukeni 3. Katteri Kuppam 4. Thethampakkam Continued..,

5 Table 6. I continued... S1. No. Name of the Bank branch Name of the Villages allocated (1) (2) (3) 09. Indian bank, Thirukkanur Manalipet Mannadipet Chettipet Sorapet S ellipet Koonichempet Valnbupet Vadhanoor 10. Indian Bank, Kirumampakkam 1. Kirumampakkam 2. Pillaiyarkupparn 3. Aranganaor 4. Seliamedu 11. Indian Bank, Karayafnputhur 1. Karayamputhur 2. Manamedu 12. State Bank of India, Manapet. 1. Manapet 2. Uchimedu 13. Uni.ted Cornrnercial Bank, Bahour 1. Bahour 2. Kuruvinatham 3. Irulansanthai 4. Parikkalpet 5. Kaduvanur 14. United Commercial Bank. 1, Periakalapet 2. Oulgaret 15. Indian Bank, Ariyankuppam Ariyankuppam ManaveIi 3. Thavalakuppam 4. Poornankuppam 16. Indian Bank, Lawspet 1. Kmvadikuppam 2. Reddiarpalayam 17. Indian Bank, Mettupdayam I. Kwumbapet 2. Oulgaret Continued.,.

6 Table 6.1 Continued... Sl. No. Name of the Bank branch Name of the Villages allocated 18. State Bank of India, 1. Pondicheny Thengaithittu Murungapakkam Alankuppam Kodathur Karasur Pillayarkuppam(Villianur) Thuthipet Sedarapet Saram Olanthai Thattanchavadi 19. Bank of Baroda Pondicherry. 1. Thirukkanji 2. Osudu 3. Olavaikkal 4. Uruvaiyaru 20. Canara Bank, Pondicherry 1. Pillaichavady 21. Syndicate Bank, Pondicherry. I. Thondamanathm (Villianur) 2. Korkadu (Villianur) 3. Pudupalayarn (Reddiarpalayam) KGRAIKAL REGION - SEMI-URBAN 01. State Bank of India, 1. Polagam Karaikal. 2. Sethw 3. Melakasakud y 4. Kezhakasagudy 5. Sorakudy 6. Sellur 7. Thennankudi 02. United Commercial Bank, Karaikal 1. Kezhaveli 2. Kovilpathu 03. Indian Overseas Bank, Karaikal. 1. Kizhavoor 2. Thalatheru Continued...

7 Table 6.1 Continued... S1. No. Name of the Bank branch Name of the Villages allocated (1) (2) (3) 04. Canara Bank, Karaikal. I. Keezarnani 2, Poovarn 05. Lakshmi Vilas bank Ltd, Karaikal 1. Pettai 06. Indian Bank, Karaikal, 1. Dharrnapuram 2. Qduthurai KARAIKAL REGION - RURAL Indian Overseas Bank, Thirunallar 1. ThirunaIlar 2. Subbarayapuram 3. Devamapuram Indian Overseas Bank, 1. Ambagarathur Ambagarathur. 2. Nallazhandur. Indian Overseas Bank, Nedungadu 1. Kurumbagaram 2. Nedungadu 3. Ponpethi 4. Puthakudi Indian Overseas Bank, T.R. Pattinam 1. T.R. Pattinarn 2. Keezhayur 3. Vanjoor Indian Bank, Neravy I. Neravy 2. Vizhithiyur. State Bank of India, Kottucherry. 1. Kottucheny 2, Varlchikudi (North) 3, Varichikudi (South) 4. Thimvettakudi. YANA.M REGION 01. Indian Bank, Y m 1. Y anam (Semi-urban) 2. Adavipolarn Continued...

8 Table 6.1 Continued,.. S1. No. Name of the Bank branch Name of the Villages allocated (1) (2) (3) 02. State Bank of India, Yanarn. 1. Y anam (Semi-urban) 2. Kmakalapeta 3. Mettakuru MAHE REGION 01. Canara Bank, Mahe, I. Pallur-I 02. Syndicate Bank, Mahe. 1. Pallur - I1 03. Indian Bank, Mahe. 1. Chalakara 04. State Bank of India, Mahe 1. Cherukkallaye. 05. South Indian Bank Ltd, Mahe. 1. Pandakkal. Source: Indian Bank (Lead Bank), Service Area Credit Pfan, , Pondicherry, All the service area villages are spread over in the six blocks of Karikalambakkam, Reddiarpalayam, Villianur, Karaikal, Mahe and Yanam. 6.4 Implementation of Annual Credit Plan The ACP was implemented on a calendar year basis till 1988, namely, fiom January to December. From , the period of the ACP has been synchronised with the financial year, namely, from April to March. The financial targets and achievements during the period fiom 1980 to 1998 under ACP are shown in Table 6.2.

9 TABLE 6.2: PERFORMANCE UNDER ANNUAL CREDIT PLAN IN THE UNION TERRITORY OF PONDICHERRV, (Rs in lakhs) Year Sector Target Achievement Percentage of Achievement (1) (2) (3) (4) (5) I980 Agri & allied activities Agri & allied activities 1982 Agri & allied activities 1983 Agri & allied activities 1984 Agri & allied activities 1985 Agri & allied activities 1986 Agri & allied activities 1987 Agri & allied activities 1988 Agd & allied activities Continued.,,

10 Table 6.2 Continued... (Rs in lakhs) Year Sector Target Achievement Percentage of (1) (2) (3) (4) Achievement (5) Agr~ & allied activities Agri & allied activities Agri & allied activities Agri & allied activities Agri & allied activities Agri & allled activities Agri & allied activities Agri & allied activities Agri & allied activities 3476, Trade/ Source: Indian Ba& (Lead Bank ), District Credit Plan / Annual Credit Plan of Pondicherry 1980 to

11 From Table 6.2. it can be observed that in as against the target of Rs laus, the achievement was Rs lakhs which works out to per cent. Performance under agriculture and allied activities was well below the overall performance of 87 per cent. Performance under industries was very impressive. In 1982, the performance of the Lead bank in implementing ACP was far from satisfactory i.e., only per cent of the target was achieved. The overall performance along with broad sectoral performance has improved from T11e overall credit utilisation has increased from Rs lakhs in 1980 to Rs lakhs in denoting an increase of 2.96 times. By the end of March 1998, the utilisation has increased to Rs lakhs as against Rs lakhs in 1980 which works out to an increase of 6.70 times. The performance under broad sectors indicate that, the increase under agricutural and allied activities was from Rs lakhs in 1980 to Rs lakhs in March,98 denoting an increase of 4.19 times. Under industry sector, an increase of times was noticed, from Rs lakhs to Rs lakhs. The flow of credit to services sector has increased to Rs lakhs in March, 98 from Rs lakhs in 1980 indicating an increase of 6.92 t~rnes. Another notable but disconcerting feature that can be observed in the implementation of ACP over the last 18 years is that per cent of the credit was earmarked towards agriculture and allied activities in 1980, whereas this has come down to per cent in March, 1998, Under industries the percentage share in 1998 was against in In Sector, the percentage share was almost stagnant that is from per cent in 1980 to per cent in March,98. This clearly establishes the fact that the increased Credit absorption could be noticed in industries sector, decreasing trend in agriculture and allied activities and almost a constant trend in respect of Sector.

12 TABLE 6.3: GROWTH PERFORMANCE OF ANNUAL CREDIT PLAN AS COMPARED TO PERFORMANCE UNDER STATE PLAN SCHEMES, UNION TERRITORY OF PONDICHERRY, ( Rs, in lakhs ) Year Amount incurred Percentage Amount incurred Percentage Under Annual Growth over Under Annual growth over Percentage Credit Plan the previous Plan of the Union the previous of column (2) Year Territory Of Year to column (4) Pondicherry (1) (2) (3) (4) (5) (6) Source: [a] Indian Bank (Lead Bank ) Distrid Credit Plan / Annual Credit Plan 1980 to [b] Planning and Research Department, Government of Pondicherry, Five Year Plan / Annual Plan to

13 It is stated that from 1980 to 1988, the ACP was implemented on a Calendar year basis unlike the plan schemes of the Union Territory Administration namely., from April to March. The period of ACP of Lead Bank from 1980 to 1988 is synchronised with financial year basis, namely to as that of State Plan schemes for comparison purpose. It may be noted that the amount disbursed for activities under ACP has declined over the years as compared to the utilisation of plan funds by State Government as can be seen from Table 6.3. The State plan expenditure was Rs lakhs in as against Rs lakhs in showing an increase of times over the last 17 years. In the case of ACP, it was Rs lakhs in as against Rs lakhs in showing an increase of only 6.70 times. Except the year 1981 and (wherein per cent and per cent have been achieved), other years have recorded only a modest increase under ACP, During , and , the percentage increase over the respective previous years was as low as 4.89, 1.42 and 2.56 respectively. The negative growth of per cent in and 0.32 per cent in has affected the flow of credit to various segments. During the first two years, namely, and , there was almost perfect match between the performance under ACP and the State Plan. It may be seen from column (6) of Table 6.3 that there was perfect match between the performances under ACP and State plan schemes in the initial years namely, and From , it has started widening. The gap was very wide during the nineties particularly after During , the performance gap was per cent om the gap of 6.56 per cent in This shows that LBS is not helping the Pondicberry economy as in the case of State plan schemes.