STATE LEVEL BANKERS' COMMITTEE, TAMILNADU CONVENOR: INDIAN OVERSEAS BANK MINUTES OF THE 119 th S L B C MEETING HELD ON 25.09.2009 119 th SLBC Meeting of Tamil Nadu was held at Chennai on 25 th September, 2009. The meeting was attended by Secretaries, Heads of various Departments and Senior Officials from Government of Tamil Nadu, Executives from Banks and other organizations. List of participants is furnished in the Annexure. After the welcome address of Shri S.N. Misra, General Manager, IOB and Convenor SLBC; Shri G. Narayanan, Executive Director of IOB delivered the inaugural address. Shri K. Gnanadesikan, IAS., Principal Secretary, (Finance), Government of Tamil Nadu delivered the keynote address. Shri K.R. Ananda, Regional Director, RBI, Chennai and Shri R. Narayan, Chief General Manager, NABARD addressed the house. Shri Y.L. Madan, Executive Director, Indian Overseas Bank joined in the deliberations. Shri S.N. Misra, General Manager, IOB in his welcome address explained the scope and coverage of the meeting and stressed the need for timely review and initiation of corrective steps through timely submission and analysis of data. He mentioned about the special focus on crop loan disbursement as the key point of this meeting.
Shri G. Narayanan, Executive Director, Indian Overseas Bank in his inaugural address reviewed the progress made by the Banking system in Tamil Nadu under various key parameters and outlined the action areas for Banks as under: - FARM CREDIT DISBURSEMENT Farm credit disbursement is an area of immediate concern. Time is ripe for expanding farm credit aggressively to bring maximum area under cultivation as water is already released from Mettur Dam. As requested by the Commissioner of Agriculture, Government of Tamil Nadu, LDMs must provide weekly update on crop loans disbursed by Banks to both State Government and SLBC. Action: Member Banks / LDMs Agri Debt Waiver & Debt Relief Scheme 2008 Government of India has extended the last date for payment of 75% of the dues by other farmers under ADWDRS for another six months i.e. from 01.07.2009 to 31.12.2009. Government has also advised that 31 st January 2010 will be the last date for receiving grievances by all agencies. This is an opportunity for both to the farmers as well as banks, which should be taken advantage of. Action: Member Banks Highlights of Banks Performance in Tamil Nadu in 2009-10 CD Ratio of March 2009 (114%) was maintained as at June 2009 also. However, it was 117% for June 2008. 2
CD Ratio of Kancheepuram and Tiruvallur Districts at 48% and 58% respectively, are lower than the benchmark level of 60%. DCC Convenors of these two districts should devise action plan for improving CD Ratio in a phased manner. Action: DCC Convenors of Kancheepuram & Tiruvallur Dists. Deposits have increased by 18.77% during the 12 months period ended June 2009. Aggregate Credit Outstanding increased by 15.72% during the year ended June 2009 which was much lower than the previous growth of 30%, possibly as an impact of economic downturn. Global economic recovery is now providing both opportunity and responsibility to Banks to accelerate credit deployment. The share of Priority Sector advances to total credit was 39.58% as on June 2009 against 36.71% in June 2008. Share of agricultural advances has gone up from the level of 13.83% in June 2008 to 15.83% in June 2009. Member Banks should work towards achieving the targeted level of Rs.48520 crores under agricultural credit and Rs.107824 crores under Priority Credit in the current year. Action: Member Banks Government Sponsored Schemes Under Swarnjayanti Gram Swarozgar Yojana (SGSY), Banks have disbursed Rs.67.59 Crores till July 2009 in the current year against the annual credit mobilization target of Rs.212.18 Crores (31.85%). Banks and Tamil Nadu Corporation for Development of Women Ltd should continue to work together to achieve the target under SGSY in the current year. Action: Member Banks / TNCDW 3
Under Prime Minister s Employment Generation Programme (PMEGP), Banks have sanctioned 639 Projects involving margin money of Rs.11.32 Crores against the target of 3517 Projects involving margin money of Rs.42.20 Crores. Banks and the three nodal agencies have to work together to achieve 100% of the target under the scheme. Action: Member Banks / KVIC / DIC / KVIB Banks should take note of the revised guidelines for SJSRY announced by Government of India, for successful implementation of the scheme. Action: Member Banks Banks must ensure disposal of all pending loan applications under Scheme for Rehabilitation of Manual Scavengers (SRMS) on or before 30.09.2009. Action: Member Banks Annual Credit Plan for 2009-10 As per quick information reports received, under Annual Credit Plan 2009-10, Banks in Tamil Nadu have disbursed Rs.8910.94 Crores during the first quarter ended June 2009, achieving 88% of the proportionate ACP Target of Rs.10171.97 crores. The share of agricultural credit disbursement amounts to Rs.4997.63 crores. Credit flow to Non Farm Sector accounts for Rs.2055.16 crores and that of Other Priority Sector is Rs.1858.15 crores. Special Package for MSME & Housing Sectors Under Special Package for MSME & Housing Sectors, 12002 accounts have been restructured to the tune of Rs.3039.57 Crores. RBI has since advised that 12 services including Retail Trade would come under MSME. There will be no separate category of Retail Trade under 4
Priority Sector which will form part of MSME subject to credit limit not exceeding Rs.20 lacs. Action: Member Banks Financial Inclusion The final report of the High Power Committee constituted by RBI, to review the Lead Bank Scheme has drawn up a road map for banking facility in every village by 2011. Every village should have a banking outlet in any form, be it a physical branch or through smart card. In the light of the thrust given to Financial Inclusion by the High Power Committee, Member Banks should speed up opening of No Frill accounts as a first step. Action: Member Banks Under-Banked Blocks: Government of India advised to identify under banked and unbanked areas for opening of branches so that these areas also attain the national average in terms of population per bank branch. There is no unbanked block in Tamil Nadu. However, there are five under-banked blocks in four districts of Tamil Nadu with only one bank branch in each block. Member Banks are requested to give willingness for opening branches in these blocks. The DCC Convenors were already advised suitably. Action: Member Banks RSETIs & FLCCCs 11 districts have so far been allotted to Banks for setting up of RSETIs and 4 FLCCCs are functioning in the State. Offer from Banks to open RSETI and FLCCC in remaining districts is awaited. Action: Member Banks 5
Shri G. Narayanan, ED, IOB acknowledged and thanked for the whole hearted and continued support extended by the Government, Reserve Bank of India, NABARD and the member Banks both at the State level and at the Districts level. He wished every success to SLBC, Tamil Nadu in all its endeavours and bid adieu to the house as he was laying down office on superannuation. Shri K.R. Ananda, Regional Director, Reserve Bank of India, Chennai in his Special Address made the following observations:- Noting that C.D. Ratio @ 114% is probably one of the highest in the country, Regional Director, RBI complimented the Banks for the same. Share of Priority Sector Advances @ 39.42% is very close to the target of 40%. Share of DRI advances is very meager which needs to be increased. Banks can grant advances under DRI against group guarantee. Share of agriculture advances has come down to 15.85% in June 2009 due to change of base for advances to higher level. Banks have to accelerate lending to farm sector as the agricultural operations are in full swing. Share of advances to weaker sections is 8.08% against the national norm of 10%. Instruction of the Hon ble Prime Minister for ensuring 15% of Priority Sector credit to Minority Communities by March 2010, should be honoured by Banks. 6
Credit to Non Farm Sector remained at 80% of the target during the first quarter. It required aggressive expansion. Hassle free credit to MSME Sector is an immediate need. Entrepreneurs frequently complain about insistence of collateral security by Banks. Banks should take advantage of the guarantee cover available under CGTMSE for limits upto Rs.1 crore and extend credit facilities without undue emphasis on collateral as MSME Sector is providing large scale employment with higher productivity. Opening of No Frills accounts is only the beginning in the implementation of Financial Inclusion Project. Poorer sections of society have to be enabled to operate their No Frills accounts through low cost transaction models. The instructions/decision in respect of Financial Inclusion must percolate to the bottom level. Principal Secretary, Finance, Government of Tamil Nadu had assured that RRBs are treated on par with other Commercial Banks. But as per feed back received, RRBs continue to be discriminated at the District level. State Government should ensure that a fair share of business goes to RRBs too. Recovery rate of SHG loans has been declining and necessitating quick corrective measures. Dual membership in SHGs have been noticed in some districts like Dharmapuri & Krishnagiri. Banks/NGOs who are indulging in breaking away 7
the existing SHG Links and diverting to other Bank must stop this reprehensible practice forthwith. In Ottapidaram & Radhapuram of Tirunelveli District, Sub Treasury operations are to be carried out by Banks. In view of the fact that RRBs are not fully equipped to carry out Government transactions, Commercial Banks should come forward for opening branches in these two places. He pointed out that as per the recommendations of High Power Committee, banking facilities have to be extended to all villages with a population of 2000 at least once a week by March 2011. This may be through physical branch or through Mobile Banking etc. Banks should share the villages and ensure that they get banking facilities by March 2011 as recommended by the committee. As part of the Platinum Jubilee Celebration of RBI, sensitization programmes on Financial Inclusion, Banking Habits, RTI etc., are being held. RBI seeks the cooperation of Banks, Government Departments at State/District level in this endeavor. RBI will be adopting 8 villages and make them totally financially inclusive. The working group of RBI has included more entities as eligible Business Correspondents. The additions are Individual Kirana shop owners, PCO Operators, Small Savings Agents, Retired Teachers, successful SHG Members, non deposit taking NBFCs etc. 8
Whenever Banks come across fake notes, the same has to be reported to RBI. However, this is not being done by Banks especially Public Sector Banks. Further, notes of denomination of Rs.500/- and above have to be issued to public after checking the same thro note verification machines. Violating Banks may have to face regulatory action. In this regard, RBI will be convening a meeting of Banks in October 2009. Shri K. Gnanadesikan, I.A.S., Principal Secretary, Finance, Government of Tamil Nadu observed as under in his key note address:- Water has been released from Mettur Dam and cultivation is in full swing in delta districts. Banks must extend crop loans aggressively to ensure maximum production in the ensuing Samba season. In the back drop of concern at the national level that paddy production will be at a lower level this year, Banks contribution by way of timely and hassle free farm credit assumes greater significance. State Government has taken steps to maintain adequate fertilizer stocks and has allotted Rs.90 Crores for the same. State Government has allocated Rs.25 Crores towards 50% crop insurance premium for 25 lac farmers in the current year. Last year, 2 lac farmers were benefited by way of claim settlement to the tune of Rs.230 Crores. This year the claim settlement has increased to Rs.656 Crores. 9
Banks should ensure coverage of all crop loans whether jewel based or otherwise under NAIS and achieve the target of 25 lac farmers set by the State Government. Weather based crop insurance was launched in select districts on a pilot basis. Though the premium is slightly higher, the farmer stands to benefit, as there will be no crop cutting experiment. Cooperation of Banks was needed in popularizing the scheme. Banks should ensure achievement of the stipulated share of agricultural credit viz., 18%. Performance of Banks under ACP in the first quarter is very poor in Tuticorin District. Achievement of Banks under Non Farm Sector in Karur District is also poor. As both these districts have good potential, Banks have to exploit the same and increase credit flow under ACP. Micro Irrigation Scheme viz., IAMWARM project is being implemented in 63 sub-basins covering 17 Districts. The beneficiary is eligible for a subsidy of 65% and the beneficiary requires funding of the remaining 35%. Banks are requested to assist farmers for installation of Drip & Sprinkler irrigation systems, for conserving water. Cooperation and involvement of Banks is essential for successful implementation of this World Bank Funded Project. 10
The Principal Secretary, Finance recalled the active participation of Smt. Madhavi Sharma, GM, RBI in SLBC Meetings, the interest and concern shown by her for the weaker sections and developmental credit. The Principal Secretary, Finance requested forum to record the appreciation for the pro-active role played by her during her tenure as GM, RBI at Chennai. Shri R. Narayan, Chief General Manager (CGM), NABARD, Chennai in his Special Address observed as under:- As regards credit flow, while supply side is being taken care of in almost all the States, in Tamil Nadu, initiatives are being taken on demand side also. State Government s initiative for setting up of Agri Clinics in the District is commendable. While credit flow to agriculture has been doubled, agricultural production has not been doubled. This calls for initiative for increasing productivity. Agri Clinics may be set up thro Diploma holders as Agri Graduates may not be interested/finding it remunerative to run it. State Government has developed good software for soil testing and fertilizers use. It is necessary that such non-credit input /advice are made available to farmers thro FLCCCs or at branch level. 11
Chitta issued by Common Service Centres (CSCs) are not accepted by Banks. CSCs are set up for generating documents for the benefit of farmers at the village level. Hence, Banks should accept the Chitta issued by CSCs. The crop raised under precision farming in Dindigul district is visibly better than crops raised nearby under conventional methods. There is marked decrease in the input costs. Productivity is much better. Further 65% of the project cost is met by Government by way of subsidy. Banks should go in a big way for financing setting up of drip/sprinkler under precision farming. Subsidy linked schemes administered by NABARD viz., Rural Godowns, Cold Storage etc. have not picked up in Tamil Nadu. NABARD would like to disseminate the details of various schemes in the next SLBC Meeting or in a meeting convened by NABARD. After these addresses by Dignitaries, the Agenda was taken up for discussion. AGENDA: 1 CONFIRMATION OF THE MINUTES OF THE EARLIER MEETING The forum confirmed the minutes of the 118 th SLBC Meeting held on 26.06.2009. 12
AGENDA: 2 New Issues 1. Coverage of handicrafts artisans provided with Artisans Credit Cards (ACC) under Credit Guarantee Scheme (CGTMSE) Shri S. Ramamurthy, Regional Director (H), O/o. The Development Commissioner (Handicrafts) informed that the guarantee fee payable in respect of credit to Handicrafts Artisans is borne by the Government. The Development Commissioner (H), has placed an amount of Rs.2.80 Crores with CGTMSE towards guarantee fee and annual service charges. Bank Branches could inform about eligible loans to CGTMSE directly for debit of the guarantee fee / annual service charges from the corpus held by CGTMSE for covering the credit facilities. He clarified that the guarantee fee is 1% for credit facility upto Rs.5.00 lacs and 1.5% for credit facility from Rs.5.00 lacs to Rs.50.00 lacs. Annual Service Charges is 0.75%. Banks were also informed that the Assistant Directors (H) in Tamil Nadu (details mentioned in the Agenda) will recommend eligible loan applications to the nearest bank branches. Regional Director, RBI advised Banks to take advantage of the scheme and extend credit facility to Handicrafts Artisans. Action: Banks 2. Loans to Denotified Nomadic Tribes (DNTs) Shri C.S. Deivavel, AGM, IOB informed about IBA s request for examining recommendation of the National Commission for Denotified Nomadic & Seminomadic Tribes (NCDNSNT) to fix percentage of target within the overall target for weaker sections. 13
The Principal Secretary, Finance, Government of Tamil Nadu, suggested that the matter may be taken up with the Director of Tribal Welfare and the Director of Backward Classes, Government of Tamil Nadu to determine prevalence of these tribes in the State. The forum accepted this suggestion. Action: SLBC 3. TN IAMWARM Project Implementation of Micro Irrigation Scheme Extending Loans to the Eligible Farmers towards contribution Amount Shri S.N. Misra, GM, IOB explained the scope and coverage of the scheme stating that in our State beneficiaries are entitled to enhanced subsidy of 65%. For the balance 35%, farmers require Bank loan. Shri K. Gnanadesikan, I.A.S., pointed out that the scheme aims at conservation & judicious use of water, which is the need of the hour and appealed to Banks to go in a big way in financing farmers under the scheme. Shri R. Narayan, CGM, NABARD, Chennai shared his experience of visit to precision farms and commended the initiative of State Government in this regard by enhancing subsidy to 65%. CGM, NABARD advised Banks to finance installation of Drip & Sprinkler Systems under the scheme taking into account the low risk associated with such loans. After the deliberations, the forum advised Banks to actively involve themselves in the implementation of the scheme and provide credit to farmers towards 35% of the project cost. Action: Banks 14
4. Notification of Centres for creation of Equitable Mortgage Shri Muralikumar, Chief Manager, Karur Vysya Bank Ltd., quoting the example of Andhra Pradesh, suggested that for the purpose of depositing the title deeds under Transfer of Property Act, all the centres with a Bank Branch should be declared as a NOTIFIED CENTRE. This will reduce the burden of carrying the title deeds from place to place and hasten the process of loan disbursement. The Principal Secretary, Finance, Government of Tamil Nadu assured to consider the request and advised SLBC to take up the matter with Inspector General of Registration. The Regional Director, RBI, drawing attention to the problem of fake documentation, suggested facility for creation of mortgage in electronic form as prevalent in Karnataka. After the deliberations, the forum advised SLBC to take up the matter with Department concerned of State Government for notification of all the centres where bank branches are functioning. Action: SLBC / State Government 5. National Agricultural Insurance Scheme (NAIS) Procedure for settlement of additional claims arising due to Mistakes / Errors / Omissions / Commissions of Financial Institutions Shri C.S. Deivavel, AGM, IOB apprised the forum that the procedure for settlement of additional claims arising due to mistakes, errors etc., was 15
circulated to Banks to elicit their views. So far only, RRBs have conveyed their views. Shri K.R. Ananda, Regional Director, RBI stressed that Banks should submit the premium / claim without delay by toning up their system and elicited the reason for delay. Shri K. Jeyabal, Chairman, Pallavan Grama Bank explained that there is always a last minute rush by the non-loanee farmers who throng in large numbers at the branches. A lot of details have to be collected and documentation to be done before remitting the premium. Therefore, once SLTC admits the claim after satisfying with the genuineness of delay, the claim should be admitted. Imposing liability on the Bank would have a detrimental effect. The Principal Secretary, Finance, Government of Tamil Nadu agreed with this observation and advised that the views of other Banks may also be collected and a collective response should be made by SLBC. Action: Banks / SLBC Shri Selvam Veeraraghavan, GM, Indian Bank informed that one firka of Tiruvarur District was wrongly taken as that of another district and the claim has not been settled. Despite close follow up and reminders, the claim is yet to be settled. Farmers are besieging the branch, creating law and order situation in the area. He requested for immediate settlement of the claim. 16
He also informed that though State Government has given its share of 50% towards claim (NISHA), Central Government is yet to release its share. Consequently, the claim amount is yet to be received thereby affecting fresh credit to these farmers. The Principal Secretary, Finance explained that while State Government had made budget allocation and released the amount, in the case of Central Government, budget allocation has not been made and hence the delay. State Government has already taken up the matter with Central Government and the amount will be released early. However, disbursement of fresh crop loans should not be linked to release of amount settled under NAIS. He appealed to Banks to accelerate granting of crop loans, as the cultivation operations are in full swing, without linking receipt of amount settled under NAIS. He wanted more details on the issue raised by Indian Bank as well as such issues as multiple payment of premium by same farmers at different Banks. He assured that matter would be taken up with Agricultural Insurance Company. Action: Indian Bank / AIC 6. Financial Inclusion Shri Selvam Veeraraghavan, GM, Indian Bank informed the forum that Indian Bank has given 17698 Overdrafts in No Frill Accounts which needs to be taken into account. 17
Shri S.N. Misra, GM, IOB accepted this and agreed to add a column for overdraft in the data sheet. After deliberations, the forum advised Banks to take note of the observations of the Executive Director, IOB & the Regional Director, RBI 1. To speed up opening of No Frills A/cs. 2. Extend credit facilities in No Frill Accounts by GCC/OD 3. Initiate steps for providing Banking Services to villages having population of 2000 by March 2011 as per the recommendations of High Power Committee (HPC). Action: Banks / SLBC 7. Setting up of Rural Self-Employment Training Institutes (RSETIs) Shri T Udayachandran, IAS., MD, TNCDW Ltd., apprised the forum that 11 districts have so far been allotted to banks for setting up RSETI and the District Collector of these districts have been advised to identify land for setting up RSETI. He added that in the meanwhile, Banks may set up RSETI in rented premises and noted that Banks have set up RSETI in rented premises in the Nilgiris & Tiruvallur Districts. The forum after deliberations advised Banks to come forward for setting up RSETIs in other districts also. Action: TNCDW / Banks 18
8. SETTING UP OF FINANCIAL LITERACY & CREDIT COUNSELLING CENTRES (FLCCC) Shri K.R. Ananda, Regional Director, RBI advised Banks to adopt a proactive stand to instill confidence among the public about FLCCC and suggested that Branches may be advised to refer customers to FLCCCs. Shri G. Narayanan, Executive Director, IOB suggested that the experience of Bank of India & ICICI Bank who have been running FLCCCs for quite some time, can be shared and made use of. Shri S.N. Misra, GM, IOB informed that meeting of Sub Committee of SLBC on FLCCC/RSETI will be convened in the next month and appealed to Banks to send their proposals for uncovered districts. Action: SLBC / Banks 9. Government of India s Agricultural Debt Waiver & Debt Relief Scheme 2008 The forum noted that loans pertaining to 11.01 lacs SF/MF to the tune of Rs.2247.36 crores have been waived and 2.57 lacs farmers have been offered relief to the extent of Rs.594.33 crores. The forum advised Banks to take advantage of time limit extended to Other Farmers for paying 75% of the overdue amount upto 31.12.2009 and take sincere efforts to provide relief to maximum number of farmers. Member Banks were also advised to dispose off the grievances applications within a month and advise progress to SLBC. Action: Banks 19
10. FLOW OF CREDIT TO AGRICULTURE The forum noted that credit flow to farm sector in the current year upto July 2009 amounted to Rs.6044.73 crores. Shri Nanda Kishore, IAS., APC & Secretary, Agriculture, Government of Tamil Nadu drew the attention of the Banks to his request for providing crop loans disbursement details on a weekly basis. While they are able to get the information from Cooperative Banks, the information is not forthcoming from Commercial Banks. Shri T. Udyachandran, IAS, MD, TNCDW pointed out that LDMs are not having the requisite infrastructure which needs to be augmented. This has been stressed in various fora. TNCDW is contacting Bank Branches on their own to collect data. Shri Selvam Veeraraghavan, GM, Indian Bank pointed out that all Banks are not CBS compliant at the same level and Lead Banks find it difficult to collect the data from other Banks. Every month, there is a meeting at district level viz., Standing Committee, DCC & DLRC, wherein the progress at the district level may be reviewed on a monthly basis. However, if required, the data may be collected on fortnightly basis. Shri Nanda Kishore, IAS., APC & Secretary, Agriculture, Government of Tamil Nadu explained that the Collectors need to know the agri credit disbursement during the season and appealed to Banks to arrange for giving data on weekly basis. 20
After the deliberations, the forum advised Banks to accelerate credit flow to agriculture and provide the details of agri credit disbursement on weekly basis to LDMs to apprise the District Collectors. Action: Banks AGENDA No: 3 REVIEW ON BANKING DEVELOPMENTS IN TAMILNADU ON KEY PARAMETERS AS OF JUNE 2009 The forum noted that credit and deposit growth has been 15.72% & 18.77% respectively during the 12 months ended June 2009. The forum advised Banks to accelerate credit flow to Priority Sector in general and agriculture in particular so as to attain the national norm of 40% & 18% respectively and advised Banks to follow the instructions of Regional Director, RBI, to increase lending under DRI Scheme. Action: Banks AGENDA No: 4 REVIEW OF PERFORMANCE UNDER ANNUAL CREDIT PLAN 2009 2010: APRIL 2009 TO JUNE 2009 The forum noted that achievement under ACP 2009-10 during the first quarter ended June 2009 was 88% within which, Farm Sector, Non Farm Sector and OPS registered 94%, 80% & 80% respectively. The Principal Secretary, Finance observed that in Tuticorin District, the performance of Banks under ACP @ 38% of the proportionate target was 21
very poor while the performance under Non Farm Sector in Karur District was not up to mark. AGENDA No: 5 SWARNA JAYANTI SHAHARI ROZGAR YOJANA (SJSRY) Shri Parthasarathy, Technical Officer, Department of Municipal Administration apprised the forum that the State is awaiting funds from Central Government and the action plan for the current year would be advised shortly. Action: Municipal Admn. Dept. AGENDA No: 6 Prime Minister s Employment Generation Programme (PMEGP) The forum noted that 639 loans have been sanctioned for Rs.11.32 crores during the first quarter ended June 2009. The forum decided to dispose off all pending loan applications immediately and claim subsidy immediately on first disbursement. Action: Banks AGENDA No: 7 SWARNJAYANTI GRAM SWAROZGAR YOJANA (SGSY 2009-10) Shri T. Udayachandran, MD, TNCDW informed the forum that emphasis in the current year is on identifying activity clusters. 10 to 15 activity clusters would be identified and the members would be given training through reputed 22
institutes. In this regard, the experience of Banks will be utilized both at the State and District level. MD, TNCDW also appealed to Banks to ensure maintenance of credit subsidy ratio at the desired level of 3:1. The forum noted that credit to the tune of Rs.67.59 crores has been disbursed during the four months ended 31.07.2009 and advised Banks and Nodal Agency TNCDW to work together for achieving 100% of the target in the current year. Action: Banks / TNCDW AGENDA No: 8 CREDIT FLOW TO WOMEN The forum noted that credit outstanding to women at Rs.12405.07 crores constitute 4.64% of total Bank credit and advised Banks to achieve 5%. Action: Banks AGENDA No: 9 SELF HELP GROUPS (SHGs) Shri G. Narayanan, Executive Director, IOB pointed out that the recovery rate is coming down in respect of loans to SHGs which is not a healthy sign. Shri K. Jeyabal, Chairman, Pallavan Grama Bank mentioned that of late, Bankers are pressurized by politicians in the matter of opening SHG accounts. 23
Shri T. Udayachandran, IAS., MD, TNCDW informed that as per their internal study, the repayment of loan in the current year is better than earlier years and if Banks have definite information on any unhealthy practice, the same should be brought to his knowledge. As regards irregularities committed by NGOs, MD, TNCDW assured that if such NGOs are from Magalir Thittam, then TNCDW would initiate action against them and the District Collectors will initiate action for remaining NGOs. The forum noted that upto 31.08.2009 in the current year, credit disbursement amounted to Rs.566.67 crores and advised Banks/TNCDW to work together for achieving the target in the current year. Action: Banks / TNCDW Shri T. Udayachandran pointed out that in Tamil Nadu, Revolving Fund Subsidy is released to SHGs only after the groups are rated. Accordingly 1.50 lacs SHGs were extended Revolving Fund subsidy last year with actual number being 1.31 lacs. He added that at the initial stages, the emphasis was on popularizing the concept of SHGs. But, in the last 3 years, thrust is given for forming SHGs from among the BPL families. In the current year, 50,000 SHGs are formed out of which 20,000 groups will be out of NREGA Members. In urban areas, SHGs will be formed from among slum dwellers. Further, villages, where less than 25% of the population is organized under SHGs, are targeted for forming groups. The Regional Director, RBI suggested a study to be undertaken on the reasons for declining recovery of SHG loans. 24
AGENDA No: 10 CREDIT FLOW TO MINORITY COMMUNITIES The forum took on record that against the targeted level of Rs.11892.93 crores to Minority Communities, outstanding credit as on June 2009 amounted to Rs.9735.92 crores (9.95%). Banks were advised to achieve 15% target by March 2010. Action: Banks AGENDA No: 11 BANK FINANCE UNDER HOUSING SCHEME: Shri W. Christopher Robin, Regional Representative, National Housing Bank, drew the attention of Banks to ISHUP Scheme, the guidelines of which were circulated in the last SLBC Meeting. He also suggested that SLBC may consider conducting workshop to disseminate the scheme details among Banks and other stakeholders as done in neighbouring States. The forum noted that Banks have disbursed Housing Loans to the tune of Rs.346.41 crores during the first quarter ended June 2009. The forum also noted that 627 loans to the tune of Rs.10.43 crores have been disbursed under Golden Jubilee Rural Housing Finance Scheme in the first quarter ended June 2009. 25
AGENDA No: 12 KISAN CREDIT CARD SCHEME (KCC) Shri Nanda Kishore, IAS., APC & Secretary, Agriculture, Government of Tamil Nadu requested the Banks to issue KCC on mission mode as advised by Government of Tamil Nadu. He added that the KCC will also serve as an identity card for availing subsidy in future, as the Hon ble Prime Minister of India has made a reference that the subsidy should go direct to farmers. Shri S.N. Misra informed that SLBC has already written to both LDMs and Member Banks to conduct campaigns for issuance of KCC on mission mode. In view of the urgency, SLBC will write to LDMs/Banks again in this regard. APC & Secretary, Agriculture, Government of Tamil Nadu also appealed to Banks to issue KCCs without linking to receipt of claim settled amount from Agricultural Insurance Company. The forum noted that 176275 KCCs have been issued to the tune of Rs.670.72 crores during the quarter ended June 2009 and advised Banks to (i) issue KCCs on mission mode by involving themselves actively in the campaign for KCC. (ii) submit weekly progress report to LDMs Action: SLBC / Banks 26
AGENDA No: 13 Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS) Shri S.N. Misra informed that all loans under the scheme should be disbursed prior to 30.09.2009. The forum, noting that Banks have sanctioned 10134 loans and 223 loan applications still remained to be cleared, decided to dispose off the same within 30.09.2009. Action: Banks Table Agenda 1 Coverage of Unbanked / Under banked areas of the State: Shri S.N. Misra apprised the forum that there is no Un-banked district or Block in the State. There are 5 Under Banked Blocks in 4 Districts wherein only one Branch of Commercial Bank / RRB is functioning. He requested Banks to come forward for opening of their Bank Branch in these 5 Blocks and convey their willingness. He added that DCC Convenors of these 4 districts have been advised to discuss this matter in their DCC Meetings. Shri G. Narayanan, ED, IOB advised Banks to advise SLBC on their willingness to open their branches in these Blocks. Based on the response, SLBC will decide on the Bank which will open their branch in these Blocks. After the deliberations, the forum advised Banks to communicate to SLBC on their willingness to open their branches in these districts. Action: SLBC / Banks 27
Table Agenda 2 Swarojgar Credit Card (SCC) Scheme Target for 2009-10 Shri S.N. Misra apprised the forum that NABARD has conveyed Bank-wise Target for SCC for the Current Year. Accordingly, Banks are required to issue 24500 SCCs in the Current Year. Action : Banks Table Agenda 3 Proposal for Special Financial Package to the Tiruppur Dyeing Industry GM, IOB explained that Government had ordered Dyeing Industry in Tiruppur to treat the pollutant waste before releasing to rivers. The Tiruppur Dyers Association had requested financial assistance for complying with obligations under environmental laws. The Textile Ministry, Government of India have forwarded a proposal for financial package to Ministry of Finance who have referred the same to SLBC, Tamil Nadu for their views. The financial package involves adjustment of interest already paid by these units towards principal, adjustment of subsidy assistance by State Government towards principal, reschedulement of loans for 20 years and waiver of interest for the Current Year and 2010-11. GM, IOB advised Banks to offer their views. After the deliberations, Banks were advised to give their views to SLBC Convenor within 2 weeks to enable SLBC to send their report to Ministry of Finance. Action : Banks / SLBC 28
Table Agenda 4 Loans to Fishermen Smt. Kannagi Packianathan, IAS, Spl. Secretary (AH), Government of Tamil Nadu informed that fishermen are experiencing delay in getting loans. In certain cases in Chidambaram, loans were sanctioned after a year. She also suggested that prompt payers should be given some incentive. The forum advised Banks to dispose off the loan applications for fishermen promptly as per RBI guidelines. Action : Banks Table Agenda 5 Venture Capital Assistance: Shri K. Govindan, Executive Director, TNSFAC apprised the forum that an interface meeting was conducted on 21.09.09, wherein their MD, GM & Banks have participated. He added that the target for Tamil Nadu was 21 projects of which 4 have been sanctioned. 15 projects are in pipeline. He requested Banks to refer projects to TNSFAC which has to be for Rs.50 lacs & above with good backward linkage and soft loan from Banks. The forum advised Banks to refer eligible projects under this scheme to TNSFAC. Action: Banks / TNSFAC After deliberations, the meeting came to conclusion with vote of thanks proposed by Shri P.R. Narayanan, Deputy General Manager, Canara Bank. ********** 29