Minutes of the 100th Meeting of J&K SLBC - for necessary action on actionable points.

The Jammu & Kashmir Bank Limited Corporate Headquarters I +91 (0)194 2502639 E convenorbank@jkbmail.com M A Road, Srinagar 190001 F+91 (0)194 2502639 W www.jkbank.net Kashmir India J&K Bank Lead Bank/ SLBC (J&K) Ref. No. LBD/SLBC-100/2015-29 All Members of the State Level Bankers Committee (J&K) May 20, 2016 Sub: Minutes of the 100th Meeting of J&K SLBC - for necessary action on actionable points. Sir, We forward herewith a copy of minutes of the 100th Meeting of J&K State Level Bankers Committee (SLBC) held on 19th March, 2016 at Hotel Fortune Inn, Riviera, Jammu 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 emailconvenorbank@ikbmailcom / Fax 0194-2502639 enabling us to place the same before the house in 101st SLBC Meeting for review. V/m iro <-»i +lrfi ill%# Lead Bank/J&K SLBC) Ends: Minutes of 100th SLBC Meeting

Minutes of 100 th meeting of J&K SLBC Held on 19 th March, 2016 at Jammu The 100 th meeting of J&K SLBC to review performance of banks and financial institutions operating in J&K State as at the end of December, 2015 under Annual Credit Plan 2015-16, was held on 19 th March, 2016 at Hotel Fortune Inn, Riviera, Jammu. The meeting was presided over by Mr. B. R. Sharma (IAS), Chief Secretary, J&K. Proceedings were steered by Mr. Mushtaq Ahmad, Chairman & CEO, J&K Bank (Convenor, J&K SLBC). Top functionaries of the State Government and regulators who attended the meeting included Mr. B. B. Vyas (IAS), Financial Commissioner (Planning & Development), Mr.Navin Kumar Chowdhary (IAS), Commissioner/ Secretary (Finance), Mr. Bipul Pathak (IAS), Commissioner/ Secretary, (Housing & Urban Dev.), Mr. Shailender Kumar (IAS), Commissioner/ Secretary (Industries & Commerce), Mr. M. A. Bukhari (IAS), Commissioner/ Secretary (Agriculture Production), Mr. Sanjeev Verma (IAS), Secretary (Social Welfare), Mr. D. Sethy, Regional Director, Reserve Bank of India, Mr.Shankar A. Pande, CGM, NABARD, senior functionaries of State Government, Banks, Reserve Bank of India, NABARD, Heads of Government Departments and Developmental Agencies, BSNL and representatives of various Insurance Companies operating in the State. List of participants is enclosed as Annexure-A. At the outset Mr. S. S. Sehgal, Executive President (LBD/SLBC) of J&K Bank welcomed th e guests, dignitaries and participants to the 100 th SLBC meeting and thereafter requested the Chairman & CEO, J&K Bank (Convenor, J&K SLBC) to deliver the keynote address. KEYNOTE ADDRESS BY CHAIRMAN/CEO, J&K BANK (CONVENOR, J&K SLBC): Mr. Mushtaq Ahmad, Chairman & CEO, J&K Bank (Convenor, J&K S LBC) extended a warm welcome to all the dignitaries, invitees, members and participants to the 100 th (centenary) meeting of J&K SLBC and expressed satisfaction that with the level of participation the deliberations in the meeting would be purposeful and result-oriented. Highlighting the significance of J&K State Level Bankers Committee in the economic development of the State during the last two decades, Mr. Mushtaq Ahmad presented a comparative analysis of the key business & financial parameters of the banking sector in the State as on 31.12.1995 with the position achieved as on date. He stated that as on 31.12.1995 there were only 21 banks with a network of 853 branches operating in the State whereas 20 years down the line the number of banks operating in the State has increased to 46 with a branch network of 1960. He stated that during the said period aggregate deposits of banking sector have increased from Rs.3,735 Crore to Rs.81,895 Crore and the aggregate advances of the banking sector have increased from Rs.1,510 Crore to Rs.41,000 Crore. Similarly, Advances to Priority Sector at Rs.477 Crore, have now increased to Rs.21,000 Crore. Commenting on the size of the Annual Credit Plan (ACP) for J&K State, he stated 100 th meeting of J&K SLBC 1

that ACP for FY 1994-95 was just Rs.190 Crore, whereas the ACP for CFY (2015-16) stood at Rs.23,506 Crore. However, Mr. Mushtaq Ahmad emphasized that all these achievements made by the banking sector have been possible with the active support from the State Government, Reserve Bank of India, NABARD and all other stakeholders. Recounting the achievements of the banking sector during the CFY (2015-16), Mr. Mushtaq Ahmad expressed satisfaction that both the phases of Financial Inclusion Plan, viz. FIP-1 envisaging coverage of 795 unbanked villages with population >2000 (as per census 2001) and FIP-II envisaging coverage of 5582 unbanked villages with population <2000 in the State have already been completed. He however, pointed out that although for the sake of coverage the Financial Inclusion Plans stand accomplished, yet there is huge scope for improvement in banking services and facilities to the people, so that hassle-free banking facilities are available to them at their doorsteps, which needs focused attention. He apprised the house that J&K SLBC is now focused on opening bank branches in the identified unbanked 104 villages having population >5000 in J&K State in terms of the latest RBI directives, which programme has to be completed by March, 2017. Regarding implementation of EBT Scheme, Mr. Mushtaq Ahmad stated that as of now ten districts of the State have been covered under the EBT Scheme as against 6 in September, 2015 and efforts are on to ensure coverage of the remaining 12 districts of the State under EBT Scheme soon. He stated that 95% of the target of 9.81 lakh farm operating families in the State has already been covered under Kissan Credit Card Scheme and expressed optimism that the remaining 5% of the target shall be accomplished very shortly. Giving an account of the credit disbursement by banks under ACP 2015-16 Mr. Mushtaq Ahmad (Convenor, J&K SLBC) stated that against the ACP target of Rs.23,605 Crore banks have disbursed Rs.10,800 Crore constituting only 46% of the target. He expressed displeasure that when we are holding the 100 th meeting of SLBC, the achievement of just 46% is not encouraging at all. He stated that J&K Bank with credit disbursement of Rs.6,958 Crore (64%) is the major contributor followed by SBI with 12%, PNB with 6%, RRBs with 5% and Cooperative Banks with 2%. He, however, expressed satisfaction that Credit Deposit Ratio has moved from 46% as on December, 2014 to 50% as on December, 2015. Concluding his keynote address Mr. Mushtaq Ahmad assured the State Government that banks will continue to play their role in the economic development of the State and will move forward, shoulder to shoulder, with the State Government for economic development of the State. Highlighting that banks in the State are facing lot of difficulties particularly with respect to the recovery of loans, Mr. Mushtaq Ahmad urged the State Government to take necessary steps for removing these impeding factors. 100 th meeting of J&K SLBC 2

100 th meeting of J&K SLBC 3 Presidential Address by Chief Secretary, J&K Government: Mr. B. R. Sharma, Chief Secretary, in his brief address to the house expressed pleasure that the State is holding 100 th meeting of SLBC and also felt encouraged to know about the contributions made by the banking sector in the State during the last two decades. He stated that this was indeed an occasion to celebrate but at the same time stressed upon the members to introspect that though the achievements have been significant, yet with a little more effort we could have achieved a lot more particularly in respect of the achievement of targets under ACP 2015-16. Commenting on achievement of mere 46% of the ACP target for credit disbursement in the State, the Chief Secretary stressed the need to identify the factors that were responsible for hampering the flow/ expansion of bank credit in the State so that necessary corrective measures are taken. Expressing concern over the low level of achievements under credit disbursement in the State, the Chief Secretary informed the house that a study had been undertaken by RBI for enhancing the flow of credit in the State substantially during the next two years and stressed upon all the stakeholders the need to address this issue with dedication. He also stressed for comparing the achievements of banks in the State with the national benchmarks and also to ascertain whether the Annual Credit Plans formulated in the State are realistic. Highlighting that there are a number of banks that have zero achievements in the State, the Chief Secretary stressed for a focused and a thorough analysis into the working of such banks in the State to see how to improve their performance. Congratulating the Chairman, J&K Bank for convening/ holding 100 th meeting of SLBC, the Chief Secretary acknowledged that although the basic structure of the agenda has remained the same, yet the spirit and the content has definitely undergone change and expressed the hope that deliberations on various issues will help and guide in resolution of these issues. Thereafter, agenda of the meeting was taken up for deliberations as under: Confirmation of minutes of 99 th meeting of J&K SLBC: Since no amendments have been received from any of the members, the minutes of 99 th meeting of J&K SLBC circulated vide Ref. No. LBD/SLBC-99/2015-292 dated January 8, 2016 were confirmed by the house. FOLLOW-UP OF ROLLED OVER ACTIONABLE POINTS OF PREVIOUS SLBC MEETINGS: Legislating SARFAESI Act: Commissioner/ Secretary Finance, J&K Government informed that the State Government is already working on the issue. He stated that the only sensitive issue confronted by the State is relating to Transfer of Property Act, i.e. how the property taken over by the banks can be disposed of, as the J&K State has its own Transfer of Property Act under which the assets taken over by the banks cannot be disposed off to the persons other than the State Subjects of J&K. He stated that the Government is working on various options, either to have our own SARFAESI Act for the State or whether changes in the Transfer of Property Act can take care of the disposal of assets to be taken over by the banks. He assured that the State Government is keen to sort out the issue.

Setting up of Farmers Training Centers (FTCs) in J&K State: The Chief Secretary, J&K suggested that since Krishi Vigyan Kendras (KVKs) have already been established by the Government in all the districts, therefore, possibilities should be explored to carve out some suitable space for the FTCs within the Krishi Vigyan Kendras, which will facilitate dovetailing of resources and would be beneficial for the farmers who while visiting the KVKs will also get the training facilities from the FTCs at the same place. He further stressed the need to settle the issue as soon as possible to ensure that the agenda item is not repeated in the subsequent SLBC meetings. Commissioner/ Secretary, Agriculture Production, J&K Government (Mr. M. A. Bukhari) assured to settle the issue soon after taking KVKs on board. (Action: Agri. Prod. Deptt., J&K Govt.) Inclusion of chapters on financial Education in the School Syllabus: Chairman & CEO, J&K Bank (Convenor, J&K SLBC) stated that considering the importance and relevance of the financial inclusion programme, Government of India has desired that imparting of financial education is imperative. As such, all the State Governments have been asked to ensure that financial education becomes a part of the syllabus in the schools. Accordingly, in the 97 th SLBC meeting the house requested RBI to provide 4-5 chapters of text on Financial Inclusion, so that the same could be forwarded to Directorate of School Education for inclusion in the syllabus of schools. Mr. Mushtaq Ahmad desired to have latest status in the matter. Regional Director, RBI stated that RBI has already taken action in the matter. The Central Board of Secondary Education (CBSE) in collaboration with National Centre for Financial Education (NCFE) and all financial sector regulators, viz. RBI, SEBI, IRDA and PFRDA, have developed financial education workbooks for classes VI to X, copies whereof (in English version) have already been provided by RBI to State Government for inclusion in the school curriculum. Commissioner/ Secretary Finance, J&K Government assured to take up the matter with the Secretary School Education Department for further course of action. (Action: Com. / Secretary, Finance, J&K Govt.) 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 the natural calamity floods): Mr. B.B.Vyas, Financial Commissioner, Planning & Development, J&K Government stated that under the Reconstruction Plan announced by the Hon ble Prime Minister on November 7, 2015, there is a provision for providing interest subvention. The State Government has already drafted the scheme and forwarded the same to Central Government. The issue is presently under consideration of the Central Government. As and when the same is approved, the details will be shared with J&K SLBC. 100 th meeting of J&K SLBC 4

Mr. D. Sethy, Regional Director, RBI stated that the request for extension in the period of moratorium in case of the flood effected borrowers (where moratorium of less than two years was granted by banks), which was discussed during the Special SLBC meeting held on 14.9.2015 on the eve of visit of the Governor, RBI to Srinagar, has been acceded to by RBI. Mr. Navin Chowdhary, Commissioner/Secretary Finance, J&K Government desired that in case the request has been acceded to by RBI, the same should be thoroughly publicized for general awareness of the people to enable them to avail the benefit. Mr. S.K. Bhat, Senior President, J&K Bank stated that J&K Bank has already submitted the proposal to RBI but response from RBI was still awaited. Regional Director, RBI assured that the communication has already been sent to all the concerned banks. (Action: RBI) Details of various Meetings held during FY 2015-16: Various meetings convened during FY 2015-16, details whereof were given in the Agenda, were taken on record by the house. SEGMENT 2 (PERFORMANCE REVIEW OF BANKING SECTOR) Agenda Item No. 100/01 Bank-wise/ Sector-wise/ Region-wise achievements in lending to Priority Sector/ Nonpriority Sector under ACP 2015-16 position as on 31 st Dec., 2015: Chairman & CEO, J&K Bank (Convenor, J&K SLBC) informed the house that banks operating in J&K State have extended aggregate credit of Rs.10,847.22 Crore in favour of 3,08,609 beneficiaries (both under Priority and Non-priority Sector) up to 31 st December 2015 against annual target of Rs.23,605.23 Crore for 10,57,906 beneficiaries under Annual Credit Plan 2015-16, thereby registering achievement of 46% in financial terms and 29% in physical terms. This includes Priority Sector credit of Rs.6,659.12 Crore disbursed in favour of 2,27,512 beneficiaries against the annual target of Rs.14,804.83 Crore for 8,16,524 beneficiaries (constituting 45% achievement in financial terms and 28% in physical terms) and Nonpriority sector credit of Rs.4,188.10 Crore disbursed in favour of 81,097 beneficiaries against annual target of Rs.8,800.40 Crore for 2,41,382 beneficiaries (constituting achievement of 48% in financial and 34% in physical terms). Mr. Mushtaq Ahmad (Convenor, J&K SLBC) pointed out that normally at the end of third quarter of the FY the achievement should have been around 75% of the ACP target, but the achievement so far is only 46%, which indicates that we are lagging far behind the target. Commissioner/ Secretary (Fi nance) expressed concern over the poor performance of banks particularly Public Sector Banks and observed that if performance of J&K Bank is taken out 100 th meeting of J&K SLBC 5

100 th meeting of J&K SLBC 6 from the figures, the performance of all other banks would become too disturbing to deliberate upon. The Chief Secretary suggested that in the next SLBC meeting a comparative analysis of achievements of banks in J&K State viz-a-viz the position of achievement in other States of the country should be presented which will give an idea about how banks operating in other States are performing and why banks operating in J&K State are lagging behind in achievement of ACP targets which are fixed under RBI guidelines. He stated that the reasons for this poor achievement should be specifically brought out. Mr. D. Sethy, Regional Director, RBI commenting on the observation of Commissioner/ Secretary Finance stated that having served in a number of other States and attended SLBC meetings there, he has observed that level of achievement of ACP targets is more or less the same in other States too. Inviting attention of the house to the 12 major suggestions of the RBI Study, as deliberated in the Special SLBC meeting held on 14.9.2015 on the eve of visit of Governor, RBI to Srinagar, Regional Director, RBI stated that one of the suggestions was that we are not integrating the Annual Credit Plan with the District Development Plans, which give rise to the apprehensions whether the targets envisaged in the ACPs are realistic or not. He also invited attention of the members to the fact that there has not been any satisfactory increase in the gross outstanding credit of the State owing to poor achievement of ACP targets over the years. He stated that although C.D. Ratio of SBI and HDFC Bank has been comparatively better, yet the C.D. Ratio of the State has not been satisfactory. He stated that in this backdrop RBI has recently advised the banks to focus on increase in Credit Deposit Ratio for which RBI has advised specific target of 50%, 55% and 60% to be achieved during the three financial years, i.e. 2015-16, 2016-17 and 2017-18, respectively. He stressed upon the banks that while giving due importance to monitoring credit disbursals under ACP the CD Ratio should be given priority and it should be ensured that C.D. Ratio of 60% is achieved by the end of FY 2017-18. Mr. Shankar A. Pande, CGM, NABARD pointed out that a comparative analysis of performance of banks in J&K State with the performance of banks in some other States of the Country would indicate that Public Sector Banks are not doing enough here. He stressed upon both the Government as well as the bankers to have sharp focus on enhancement of credit under Agriculture sector. Expressing displeasure that achievement of ACP targets as on 31 st December, 2015 is very poor as compared to the position as on the corresponding date of the last FY, the Chief Secretary, J&K Govt. observed that Annual Credit Plans are framed on the basis of potential available from various sectors of economy and sanctity of these plans should be upheld while being implemented by the banks and financial institutions. He advised for formation of a core group, which will analyze all the factors responsible for low credit off-take in J&K State, study the performance of banks under ACPs as well as the position of Credit Deposit Ratio in the State viz-a-viz its comparative position prevailing in other states of the country. The group will ascertain the factors that are hindering credit dispensation in the State and

workout possible remedies for removing those disabling factors. He observed that there may be legislative issues, infrastructural issues that may be hampering the growth of credit in the State, or there may be some inhibitions on the part of banks and financial institutions, which need to be clearly identified and remedial measures taken. Commissioner/ Secretary (Finance) commenting on the Potential Linked Credit Plan formulated by NABARD observed that people are not generally aware of these PLPs, with the result these documents are not being taken seriously. He suggested that NABARD in collaboration with LDMs should take measures for organizing workshops in each district where representatives of all the line Departments, developmental agencies and even Public representatives be also called and sensitized about these PLPs. Commenting on the very low credit off-take under Housing and Education Sectors, he pointed out that every year a large number of youth get admission in outside the State professional Colleges/ Universities/ Educational Institutes, but credit deployment/ disbursement under Educational loan schemes is not picking up. Similarly house/ home construction activities are taking place everywhere in the State, but credit deployment under Housing loan schemes is also not picking up, which is a matter of concern and needs to be analyzed seriously. (Action: Member Banks/ SLBC Secretariat/ Lead District Managers) Regional Director, RBI pointed out that with the objective of enhancing flow of credit in J&K State a Committee was constituted for implementation of 12 major suggestions/ action points of the RBI Study. In its meeting held recently some major banks were assigned the job to conduct Seminars in each district, in collaboration with LDMs, DDMs, LDOs, for sensitizing the Government functionaries about linking of Annual Credit Plans (ACPs) with the District Development Plans (DDPs) of the State Government and the State Government was required to write to all the District Development Commissioners in this regard, but these Seminars have been conducted in only a few districts so far. He requested the State Government to send a communication in this regard to all the District Development Commissioners, so that such Seminars are conducted in all the districts. Commissioner/ Secretary (Finance) assured that the Government will write to all the District Development Commissioners in this regard. (Action: Com. / Secretary, Finance, J&K Govt.) Regional Director, RBI commenting on the dismal performance of banks under Housing and Education Sectors stated that bankers seem to be very comfortable in providing retail personal loans, which carry a very high interest rate, whereas the Housing Loans, which comes under Priority Sector, have to be disbursed at comparatively cheaper rate. He urged the bankers to change their business model and focus more on granting Housing Loans under various Housing Finance Schemes instead of Retail or Personal loans. Chairman/CEO, J&K Bank expressing agreement with the contention of Regional Director, RBI stated that customers happen to get the Consumption loans sanctioned from the banks within 24 hours without any hassles, whereas for availing Housing Loans the customers are 100 th meeting of J&K SLBC 7

required to acquire Revenue Extracts of their land and other relative documents, which is a very difficult & cumbersome process for the customers. Commissioner/ Secretary, Housing & Urban Development, Mr. Bipul Pathak, joining deliberations on the issue stated that customers are subjected to enormous difficulties while obtaining revenue records from the Patwaries particularly under the circumstances when in most of the urban areas the field book containing details of land called Latha is not existing at all. As a result the customers prefer taking consumption loans or personal loans on comparatively higher rates than getting into the trouble of acquiring revenue extracts/ records. Chief Secretary, J&K appreciating the difficulties involved in availing Housing Loans stated that these difficulties can be overcome once the digitization of the land records takes place in the State and the process of acquiring revenue extracts of land becomes trouble-free and user-friendly. Financial Commissioner, Planning & Development assured the house that the Government is working on a possible way out for sorting out this problem particularly in the two capital cities of the State and expressed optimism that it will ease the problems faced by the people. (Action: Secretary, Revenue, J&K Govt.) Agenda Item No: 100.05 Annual Credit Plan for FY 2016-17: Chairman & CEO, J&K Bank (Convenor, J&K SLBC) informed the house that against current Financial Year s ACP of Rs.23,605.23 Crore the ACP outlay for next FY (2016-17) has been proposed at Rs.27,649.47 Crore, envisaging a growth of 17% over the previous FY ACP targets, which is quite reasonable and achievable. He requested the house to deliberate on the sector-wise and region-wise estimates of the ACP 2016-17 and adopt the same for implementation. Stressing the need for introspection, the Chief Secretary, J&K Government pointed out that before adopting the ACP 2016-17 for implementation there is need to analyze the factors responsible for non-achievement of targets under ACP of the previous year and how to address the shortfall of previous ACP. CGM, NABARD pointed out that NABARD prepares the plans which are potential based and draws focus of both banks as well as the Government Departments to the potential sectors. He observed that without getting credit there cannot be any growth in the enterprises, whether it is in the agriculture or the industrial sector. He stated that in other States banks lend beyond the subsidy-linked schemes, whereas that culture is yet lacking in J&K State. He further stated that the banks in other states have Sector-specific products because they are competing with each other to get the share of market and this kind of a competition is totally lacking in J&K. Here J&K Bank is doing 70% of lending and none of the other banks operating here wants to take the lead. 100 th meeting of J&K SLBC 8

100 th meeting of J&K SLBC 9 CGM NABARD further stated that in order to fill this gap, NABARD has come up with Area Development Schemes in J&K State and last year a number of Area Development Schemes were launched by taking various banks on board, like J&K Bank and JKGB for Dairy Development in Jammu region, and a plan was made for credit disbursement of Rs.60.00 Crores for Dairy Development in six districts against which an amount of Rs.15.00 Crores have already been disbursed. He emphasized the need for adopting the same Strategy in other parts of the State. He stated that in Jammu region the focus could be Dairy, while in Kashmir region it shall be on Horticulture. He further stated that each district should have 2-3 Area Development Schemes based on the potential available. CGM, NABARD further stated that last year NABARD has launched Apple Finance Scheme through JKGB, which is Rs.150 Crore project, to be implemented in Kashmir region for high density apple and regular plantation. He desired that similar plans should be made by other banks but with commitment. He pointed out that most of the credit growth in Agriculture Sector in the State is taking place in short term segment, i.e. the crop loans segment, whereas the Term Loans segment, where capital formation takes place, is being neglected and no technological or productive improvement is taking place. Regional Director, RBI suggested to constitute a Sub-Group headed by CGM, NABARD with members from some of the major banks operating in the State, to discuss and evolve necessary strategy to address the issue of Area Development Schemes in J&K State. Agreeing to the suggestion of Regional Director, RBI, the Chief Secretary, J&K desired formation of a Small Sub-group under CGM, NABARD with members from other major banks operating in the State for addressing this issue. (Action: J&K SLBC Secretariat/ NABARD) Commissioner/ Secretary, Industries & Commerce, J&K Government pointed out that in the proposed ACP 2016-17 under Non-Priority Sector an amount of Rs.707 Crore and Rs.800 Crore has been proposed for Heavy and Medium Industries, respectively, which should be shifted to MSMEs segment under Priority Sector keeping in view that there is least scope of Heavy and Medium Industries in the State. After thorough deliberations on the issue, the Annual Credit Plan for FY 2016-17 with a total outlay of Rs.27,649.47 Crore was approved by the house with the modification to allocate Rs.207 Crore and Rs.300 Crore only under Non-priority Sector for Heavy and Medium Industries segments, respectively, whereas remaining Rs.1000 Crore (i.e., Rs.500 Crore from Heavy Industries and Rs.500 Crore from Medium Industries out of Non-Priority Sector) be added to the allocation for MSMEs under Priority Sector. All member banks were directed to implement the ACP 2016-17 in letter and spirit. (Action: All Member Banks) Agenda Item No.100.06 100% coverage of farmers in J&K State under Kissan Credit Card (KCC) Scheme position as on 31 st December, 2015: The house placed on record that up to the end of December, 2015 out of the target of 9.81 lakh Farm Operating Families in J&K State, who were willing to acquire the KCCs, 95% Farm

Operating Families have been provided Kissan Credit Cards. The Chairman & CEO, J&K Bank (Convenor, J&K SLBC) stated that the process of issuing the KCCs to the remaining 5% Farm Operating Families is presently underway and expressed optimism that the target of 100% coverage of farmers in the J&K State shall be accomplished very shortly. Commissioner/ Secretary, Agriculture Production, J&K Government, appreciating the progress made by banks in issuing the KCCs to the farming community in the State, observed that the statistical data presented in the agenda papers indicate 1.99 lakh KCC cases rejected by the banks, which when added to the 9.35 lakh cases sanctioned by banks comes to 11.34 lakh whereas the total target for issuance of KCC in the State stood at 9.81 lakh, thereby indicating errors in the statistical data, which need to be looked into and reconciled. He also pleaded that the KCCs so far issued by the banks should be linked with Aadhaar. Chairman & CEO, J&K Bank (Convenor, J&K SLBC) stated that against the total target of 9.81 lakh Farm Operating Families, who were interested in having KCCs, 9.35 Lakh KCCs have so far been issued. But against these 9.35 lakh sanctioned cases only 8.19 lakh KCCs have been disbursed credit by the banks, which is not so encouraging. It was decided by the house that in the next (101 st ) meeting of J&K SLBC, focus should be on the benefits that have percolated to the KCC holders under the KCC Scheme. Accordingly, all the banks operating in the State were advised to ensure disbursement of credit in favour of all the KCCs. (Action: All Member Banks / SLBC Secretariat) Agenda Item No.100.07 and 100.08 Achievement under Self Help Group (SHG) Scheme / Finance to Joint Liability Farming Groups of Bhoomi heen Kissan through NABARD: Progress achieved by banks under SHG and JLG Schemes as at the end of December, 2015 was placed on record. Mr. Shankar A. Pande, CGM, NABARD stated that SHG and JLG, a risk-free mechanism, is very good area for credit growth, which needs focused attention of the house and banks need to adopt this scheme for improving credit dispensation in the State. Citing an example, he stated that NABARD in collaboration with the NGO partners and banks have started this programme in Doda district and during the last FY loans to the tune of Rs.3.00 Crore to Rs.4.00 Crore have been disbursed. He stated that there are around 2.00 lakh potential farmers who are not availing any credit facility from the banks and around 2.00 lakh more farmers are yet to be brought within the ambit of KCCs. Apart from that a good number of Sericulture farmers can be adopted for grant of financial assistance under JLG Scheme. He stated that Sericulture, Handicrafts and Agriculture Departments can play a lead role in promoting JLG Scheme in the State. He further stated that Sericulture Department has the potential to form 10,000 JLGs. He stressed the need to accord focused attention and priority towards adopting SHG and JLG mechanism for improving credit dispensation in the State. 100 th meeting of J&K SLBC 10

Summing up deliberations on the issue Chief Secretary, J&K Government advised that SHG and JLG Scheme should be treated as focus area and banks operating in the State were advised to make concerted efforts for implementing the same. It was decided that in the next SLBC meeting, position under these schemes shall be reviewed as a special focus area. (Action: J&K SLBC/ All member banks) CGM, NABARD pointed out that the State Government has already waived of the stamp duty on the loans granted to SHGs under SRLM programme and requested that the scope for waiver of stamp duty be widened to cover the loans granted to all the Self Help Groups and Joint Liability Groups promoted by NABARD, so as to ensure that the stamp duty does not become a hassle for these SHGs and JLGs. He stated that NABARD has already made a proposal to the State Government in this regard, which should be acceded to. (Action: Finance Department, J&K Govt.) Agenda Item No. 100.09 Progress under Swarozgar Credit Card (SCC) Scheme: Chief Secretary, J&K expressed concern that against the target of 1000 SCCs prescribed for entire J&K State for the FY 2015-16 the progress has been quite dismal with only two banks, viz. PNB and OBC having issued just 4 SCCs involving an amount of Rs.1.70 lakh only. All the banks operating in the State who have been assigned targets under this Scheme were advised to take concerted efforts to achieve their targets. Agenda Item No.100.10 Pradhan Mantri Mudra Yojana (PMMY): The house placed on record that under PMMY, banks operating in the State have disbursed an amount of Rs.858.69 Crore against the Annual target of Rs.1956.44 Crore, (achievement of 44%). The progress was not considered satisfactory. Agenda Item No. 100.11 RBI directive for providing banking services through brick & mortar branches in villages with population of more than 5000: Chairman & CEO, J&K Bank (Convenor, J&K SLBC) stated that Reserve Bank of India vide Circular No. RBI/2015-16/277 (bearing Ref. FIDD. CO. LBS.BC. No. 82/02.01.001/2015-16) dated December 30, 2015 while observing that coverage of banking services in unbanked villages is skewed towards the BC model and the ratio of branches to BC is very low, emphasized that for increasing banking penetration and financial inclusion, Brick and Mortar branches are an integral component. Accordingly, in compliance to RBI instructions J&K SLBC has identified 104 villages having population of more than 5000 in J&K State, which are without a bank-branch of Scheduled Commercial Banks. These villages have been allocated to 8 major banks operating in the State, viz. J&K Bank, SBI, PNB, HDFC Bank, ICICI Bank, Canara Bank, UCO Bank and Central Bank of India, for opening of bank branches. 18 branches have to be opened by March, 2016 and the remaining 86 branches have to be opened by the end of March, 2017. 100 th meeting of J&K SLBC 11

Regional Director, RBI enquired from all the concerned banks their plans for opening brick & mortar branches in their respective allocated villages. GM, SBI stated that SBI could not open the branches owing to acute staff shortages. He, however, assured that SBI is contemplating a special recruitment drive for Kashmir Valley soon, for which advertisement has already been issued and as soon as the recruitment process is completed opening of branches would be taken up by the Bank. He stated that out of the 20 allocated villages having population >5000, three branches have to be opened by the end of March, 2016, and assured that these 3 branches shall be opened by SBI very soon despite staff constraints and the remaining branches shall be opened during the next FY after recruitment of staff. Representative of Canara Bank informed that 5 villages have been allocated to them against which bank contemplates to open 2 branches during Q1 of the FY 2016-17 and the remaining 3 branches shall be opened subsequently in the Q2 of FY 2016-17. Circle Head, Punjab National Bank stated that 12 villages have been allocated to them but they have not opened any branches so far owing to manpower constraints. He stated that the issue of recruitment of staff has been taken up with their Corporate Office and assured that the issue would be resolved very soon. Regional Director, RBI impressed upon all concerned banks who have been allocated villages under this programme, to ensure that branches in villages allocated to them by J&K SLBC are opened strictly as per programme, so that substantial progress is achieved in the matter before convening of the next SLBC meeting. (Action: All concerned banks) Pradhan Mantri Jan Dhan Yojana (PMJDY): The house placed on record that under PMJDY a total of 17,63,961 new accounts have been opened by banks in the State upto 31.12.2015, which includes 14,48,545 accounts opened in rural areas and 3,15,416 accounts opened in the urban areas. It was noted that during the said period 14,85,317 RuPay Debit Cards have been issued by banks to the account holders and that the number of zero balance accounts has been reduced from 8,60,129 as on 30.09.2015 to 7,67,088 as on 31.12.2015, which was encouraging. Agenda Item No. 100.12 Implementation of Electronic Benefit Transfer (EBT) Scheme in J&K State/ Progress achieved in issuance of Aadhaar Cards in J&K State (position as on 11.2.2016): Chairman & CEO, J&K Bank (Convenor, J&K SLBC) informed the house that after successful implementation of EBT Scheme in six pilot districts of the State i.e., Srinagar, Ganderbal, Jammu, Rajouri, Kargil & Leh the scheme has recently been rolled out in four (4) more districts of Doda, Ramban, Samba and Shopian taking the total number of districts covered under EBT Scheme in J&K State to ten. He stated that data validation in respect of remaining 12 districts is presently under process. 100 th meeting of J&K SLBC 12

100 th meeting of J&K SLBC 13 The house noted that Aadhaar cards have been issued to 54% of the population in J&K State. However, progress achieved by banks with regard to seeding of Aadhaar in the bank accounts was not considered satisfactory. All the banks were advised to take necessary measures for seeding of Aadhaar numbers into their bank accounts at the earliest. (Action: All Member Banks) Agenda Item No. 100.13 Branch Expansion Plan of Banks in J&K State: The house expressed concern that against the target of opening 240 branches in the State, designated banks have opened only 18 branches, which include 13 branches opened by J&K Bank, 2 branches opened by PNB, 2 branches by Syndicate Bank and 1 branch opened by ICICI Bank. The position was not considered encouraging. Chief Secretary, J&K Government observed that J&K Bank has opened only 13 branches against the target of 136 branches, which is not satisfactory. Senior President, J&K Bank (Mr. S. K. Bhat) informed that opening of more branches is presently under process and the bank has already conducted surveys and also acquired premises at various places and assured that the process of opening new branches has been delayed due to some connectivity issues, which shall be sorted out soon and assured that 10-12 branches are being opened before March itself. After brief deliberation, all the concerned banks were advised to ensure that their Branch Expansion Plans submitted by them are implemented in letter and spirit. (Action: All Member Banks) Mr. Bipul Pathak, Commissioner/ Secretary, Housing & Urban Development Department pointed out that commercial banks are opening/ operating their branches in residential areas, i.e., in the buildings which are not meant for commercial activities. He stated that Municipal Bodies and other Development Authorities are struggling to enforce the Master Plan and other related rules in major cities in Jammu and Kashmir, but these activities by the commercial banks encourages violation of Master Plan. Citing examples of Gandhinagar and Trikuta Nagar, Jammu and Karan Nagar, Srinagar, he stated that most of the buildings housing bank branches are illegal, which is a menace. He desired that banks should open their branches only in designated commercial areas. He stated that he would be writing to Heads of all the banks operating in the State. He stressed upon that banks to observe due diligence while opening branches and desist from opening branches in residential areas, which would ensure de-congestion in these areas besides averting violations of Master Plan. He also desired that banks should try to shift branches from the buildings which are violating Master Plan or buildings which do not have completion certificates from competent authority. Chairman/CEO, J&K Bank (Convenor, J&K SLBC) assured that as soon as any communication in the matter is received from Commissioner/ Secretary, Housing & Urban Development, J&K SLBC will also issue necessary instructions to all member banks to sensitize them about the matter.

100 th meeting of J&K SLBC 14 Regional Director, RBI impressed upon all the banks to look into this issue and take necessary measures immediately to ensure that building norms stipulated by the Government are not violated. (Action: All Member Banks) Agenda Item No. 100.14 Financial Literacy Initiatives in J&K State: The performance of Financial Literacy and Credit Council (FLCC) Centers operating in the State as at the end of Q3 of FY 2015-16 was taken on record. Chairman & CEO, J&K Bank (Convenor, J&K SLBC) pointed out that targ ets prescribed for conducting financial literacy programmes are not being adhered to by the concerned banks and the progress has not been satisfactory. He stated that financial literacy programme has assumed greater significance and without creating awareness we cannot groom good entrepreneurs, as such the issue deserves focused attention. Chief Secretary, J&K, while appreciating the proposal of Reserve Bank of India to include the chapters on financial literacy in the school curriculum, pointed out that performance of banks with regard to conducting of financial literacy camps through their rural branches has not been to the desired level. He stated that most of the banks have not complied with the regulatory requirement of conducting at least one financial literacy camp per month per rural branch. All banks having rural branches operating in the State were directed to ensure that financial literacy camps are organized strictly as per the regulatory requirements. (Action: All Member Banks) CGM, NABARD informed the house that during the current financial year NABARD has sanctioned about 2600 camps to be conducted under Financial Inclusion Fund Programme by various banks in the State, which includes 900 camps to be conducted by J&K Bank and 300 camps by Punjab National Bank. He requested that concerned banks should take necessary measures immediately for conducting allocated camps and completing the process by March, 2016 as per schedule. (Action: All concerned banks) Agenda Item No. 100.15 Performance of Rural Self-Employment Training Institutes (RSETIs) in J&K State- Allotment of land by State Government: Performance of the RSETIs operating in the State was taken on record. Chairman & CEO, J&K Bank (Convenor, J&K SLBC) pointed out that all the RSETIs are operating from rented premises owing to the fact that the State Government has not so far allotted land for these RSETIs and requested that the issue be resolved as soon as possible, so that RSETIs are also able to acquire the funding support of Rs.1.00 Crore from MORD, Government of India, which could not be availed by the RSETIs of our State, so far, because of non-allotment of land by the State Government.

100 th meeting of J&K SLBC 15 Mr. B. B. Vyas, Financial Commissioner (Planning & Development), J&K Government, realizing the problem regarding allotment of land to the RSETIs, stated that the State Government is scheduled to hold a Video Conference very soon with all the Deputy Commissioners to be presided over by Chief Secretary wherein besides other issues the main issue for discussion will be allotment of land to the RSETIs. He assured that he will revert back on the issue after the said Video Conference. (Action: Planning & Dev. Deptt., J&K Govt.) Item No. 100.16 Flow of credit under Credit Guarantee Fund Trust Scheme for MSMEs as on 31 st December, 2015: The house put on record that under Credit Guarantee Fund Trust Scheme for MSMEs banks operating in the State have disbursed an amount of Rs.1,039.94 Crore in favour of 52,342 beneficiaries, which includes Rs.53.97 Crore disbursed by banks in favour of 1879 beneficiaries during Q3 of CFY. Agenda Item No. 100.17 Implementation of Housing for All Mission in J&K State: Mr. Vishal Goyal, DGM, National Housing Bank pointed out that despite the fact that bankwise targets having been already conveyed, not a single claim for reimbursement of interest subvention from the banks has come forward. He requested all the banks operating in the State to make full use of the Credit-cum-Subsidy Scheme under the Prime Minister s Awaas Yojana (Housing for All), for which National Housing Bank is the Nodal Agency. Appreciating the challenges associated with the Housing Loans in the J&K State, Mr. Goyal informed the house that all the formalities and documentations have already been framed by the National Housing Bank in consultation with all the banks and Indian Banks Association (IBA). Terming the Prime Ministers Awaas Yojana as a very attractive scheme particularly for the economically weaker sections, low-income group as well as for women empowerment, he requested all the banks in J&K State to implement the scheme and claim subsidy under the scheme. The house noted that targets for the Scheme received from Housing & Urban Development Department, J&K Government vide communication dated 11.12.2015 were conveyed to the banks in the month of January, 2016, i.e. after end of the Q3 of FY 2015-16, as such, the progress on implementation of the said targets would be available only for Q4 of FY 2015-16, which shall be reviewed in the next meeting of J&K SLBC. All the banks were advised to implement the scheme in letter and spirit. (Action: All Member Banks) Agenda Item No. 100.18 Performance review of LDMs/ DLRCs and DCCs: House took on record the Credit Deposit Ratio in respect of all the districts of the State. The Chief Secretary, J&K expressed concern that ten districts of the State, viz. Jammu, Udhampur, Reasi, Doda, Ramban, Kishtwar, Rajouri, Poonch, Leh and Kargil, continue to have very low and subdued CD Ratio. He observed that in the said districts Sub-Committees

100 th meeting of J&K SLBC 16 of DCC were required to discuss the issue and take corrective measures to address the issue and ensure notable improvement in the C.D. Ratio, but so far nothing has been done in these districts. He stressed the need for addressing this problem. All the Lead District Managers were advised to look into the matter and activate the Sub-Committees for doing the needful. (Action: All Lead District Managers) Agenda Item No. 100.19 Printing of Bank forms used by retail customers in local languages: All member banks were advised to ensure implementation of the Reserve Bank of India directive conveyed through RBI Master Circular No. RBI/2015-16/59 dated July 1, 2015 on Customer Service advising therein for printing of banks stationary required for opening of Accounts, Pay-in-slips and other material etc. in trilingual form, i.e. English, Hindi and the concerned Regional Language, with a view to ensure that banking facilities percolate to the vast sections of the population. It was decided that progress in the matter would be reviewed in the next SLBC meeting. Agenda Item No. 100.20 Rejuvenation of silk industry in J&K State: (Action: All Member Banks/ J&K SLBC) The issue raised by Director, Sericulture, J&K Government seeking consideration of the Option-2 recommended by the Sub-Committee previously constituted for devising a scheme to bring Sericulture within the purview of KCC disbursements, was deferred to the next meeting. Agenda Item No. 100.21 Introduction of National Crop Insurance Programme- Weather Based Crop Insurance Scheme (WBCIS) in J&K State: Mr. M. A. Bukhari, Commissioner/ Secretary, Agriculture Production, J&K Government stated that this scheme has been changed and merged with the Prime Minister Fasal Bhima Yojana, which is under consideration of the State Government. He stated that the issue was recently discussed in a meeting and the Government is likely to take the issue to the State Cabinet for approval and notifying the areas, thereafter. He stated that Government of India has already notified a schedule in this regard. CGM, NABARD pointed out that coverage of farmers under the insurance scheme is very low as hardly 10,000 to 15,000 farmers have been covered under the Scheme in the State, so far. He stated that technically every Kissan Credit Card holder has compulsorily to be covered under this scheme. Mr. B. B. Vyas, Financial Commissioner (Planning & Dev.), J&K Government stated that the Prime Ministers Fasal Bhima Yojana is not weather-based and is a comprehensive insurance scheme for defined crops. He stated that the Government would also need to work with NABARD and expressed optimism that the policy would be finalized shortly and the Government is making all the necessary preparations to implement the scheme as soon as possible. (Action: Government of J&K)

CGM, NABARD informed the house that Hon ble Union Finance Minister would be formally launching and inaugurating this scheme on 22 nd March, 2016 from NABARD Headquarters in Mumbai, which would be webcast and telecast. He requested the members to log on to the same. Other issues deliberated in the meeting: Mr. Amit Sharma, MD, SIDCO pointed out that in various Industrial Estates of the State only J&K Bank has opened branches and installed ATMs whereas a good number of industrialists from outside the State are running industrial units and have their accounts in other banks, as such, he underlined the need for opening branches and ATMs of other banks also in addition to the branches of J&K Bank and assured that sufficient space would be provided by SIDCO in the Industrial Estate for such branches and ATMs. Chairman & CEO, J&K Bank clarified that uninterrupted banking services are being provided to the entrepreneurs in all the Industrial Estates of the State through J&K Bank branches and ATMs. He further clarified that ATMs provide cash withdrawal facilities to all the customers irrespective of the bank in which they maintain their accounts. Responding to a query from Chief Secretary regarding acceptance of ATM cards of all banks on the J&K Bank ATMs, the Regional Director, RBI clarified that the ATM Cards are accepted on the ATMs of all the banks and three transactions in a month are free of any charge and thereafter some charges are levied. Commissioner/ Secretary Finance, J&K Government observed that opening of branches in the industrial estates was open for all banks and nobody has barred any bank from opening branches there. Commissioner/ Secretary, Industries & Commerce, however, opined that in case there is need for opening branches by other banks also, MD, SIDCO could send communications to some major banks operating in the State offering space for opening their branches and the issue should be raised in SLBC meetings only in case there is no response from those banks in the matter. Mr. S.S. Sehgal, Executive President, J&K SLBC expressed concern that out of the 10 Lead Districts allocated to SBI, three Lead Districts, viz. Doda, Reasi and Kargil are without the services of LDMs. Besides, two SBI-RSETIs functioning in Districts of Ramban and Kathua and four Financial Literary Centres (FLC Cs) of SBI, functioning in districts of Doda, Reasi, Kishtwar and Kargil are without Incharge Officers. He requested SBI to take notice of the same for immediate redressal. The meeting ended with a vote of thanks presented by Mr. S. S. Sehgal, Executive President (LBD/SLBC), J&K Bank. Assistant Vice President Lead Bank/ J&K SLBC 100 th meeting of J&K SLBC 17