Minutes of the SLBC (U.P.) Meeting Dated 23.03.2010

The meeting of SLBC (U.P.) to review the progress of performance of banks as at the end of quarter ended December’09 was held on 23.03.2010 at Hotel Clarks Awadh, Lucknow. Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda, Mumbai chaired the meeting. Shri N. S. Srinath, Executive Director, Bank of Baroda also participated in the meeting. Shri R. K. Sharma, IAS, Agriculture Production Commissioner, Govt. of U. P.; Shri Sanjeev Kumar, IAS, Commissioner, Rural Development, Govt. of U.P; Shri L. Venkateshwarlu, IAS, Secretary, Fisheries, Govt. of U.P; Shri Ravi Prakash Arora, Special Secretary, Agriculture, Govt. of U. P. Shri Rakesh Krishna, Addl. Director, Directorate of Institutional Finance represented State Govt.; Shri Suresh C. Arya, Senior Research Office, Ministry of Finance, Govt. of India; Shri D. P. S. Rathore, Regional Director, Reserve Bank of India; Shri Ram Lal, Dy. General Manager, RBI; Shri D. P. Mishra, Chief General Manager, NABARD; Dr. S. Saravanevel, General Manager, NABARD & Senior Executives/Officers from Banks, State Govt. Deptts. and other financial institutions also participated in this meeting. The list of participants is enclosed as an ANNEXURE.

Shri Subhash C. Ahuja, General Manager, Bank of Baroda & Convenor, SLBC (U.P.) extended his warm greetings to Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda, Mumbai for his participation in the meeting despite pressing engagements. He also welcomed Shri N. S. Srinath, Executive Director, Bank of Baroda for his maiden appearance in today’s SLBC meeting. He also extended warm welcome to Shri R. K. Sharma, IAS, Agriculture Production Commissioner, Govt. of U. P. & other Senior Bureaucrats, Govt. Functionaries, Higher Authorities of NABARD, RBI & banks. In his welcome address he stated that :-

• India’s economy has been one of the best performer and the real star in the world economy in recent years growing at the rate of 9.2% in 2007 & 9.6% in 2008. The growth may be attributed to market reforms, inflow of FDI, rising Foreign Exchange Reserves, a boom in IT and Real Estate and a flourishing Capital Market. However, like most of the countries of the world, we also faced testing time in 2008.
• To push back the after effects of the global meltdown, Govt. of India adopted some structural transformation in recent times and these were adequate enough to reduce the growth constraint and contributed greatly to the over all growth and prosperity of the country. Our diverse and large economy consists of a number of major sectors including Manufacturing Industries, Agriculture, Textiles, Handicrafts & Services. Agriculture is the biggest component as over 66% of the Indian population earns their livelihood from this area.
• Services Sector has expanded greatly in last couple of years and has assumed an important position. Of late, our country has developed as a hub of outsourcing activities for some of the major economies of the world including USA & UK. Outsourcing to India has been primarily in the area of technical support and customer services. Other sectors where India is expected to make progress include Manufacturing, Pharmaceuticals, Aviation, Bio-Technology, Tourism, Retailing and Tele-Communications so that our energies and efforts are synergized in such a way that these may earn the best possible results in days to come.
• On the front of Financial Inclusion, Banks together have opened 1,34,64,944 “No Frills A/cs” in the State and have saturated 73010 villages. This is undoubtedly a huge work accomplished; however, we still have a long way to go.
• The letter of Chief Secretary, Govt. of U. P. issued to all District Magistrates in the State for extending all possible help to bankers in securing notional possession of the mortgaged property of a defaulter borrower for realizing bank dues through its auction in terms of the provisions of SARFAESI Act 2002 is a testimony of the cooperative and hand-holding attitude of the Govt. authorities.
• The colleague bankers should make it a point to ensure submission of data/information asked for by SLBC on short notice in order to enable SLBC to respond to the calls raised by Govt. of India/Reserve Bank of India for submission of certain data/information.

At the end of his address, he expressed thanks to one and all for the cooperation, coordination and assistance extended by them without which the objectives of this forum would have not been achieved. He also hoped for continuance of the same in future also.

In his Key-Note Address Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda welcomed all the dignitaries in general and Shri R. K. Sharma, IAS, Agriculture Production Commissioner, Govt. of U.P.; Shri N. S.Srinath, Executive Director, Bank of Baroda and Shri S. C. Arya, Senior Research Officer, Ministry of Finance, Govt. of India in particular. To begin with, he gave an overview of the economic scenario all round which would affect the economic activities being carried out for development in our country and other parts of the world. He further stated that:-

• Year 2009-10 was a very challenging year and a different one also due to the impact of the global meltdown and the subsequent crises that emerged thereafter. Initially, it was thought that India may not be impacted too much by the global turmoil because our economy is driven by internal demand and supply. The component of Exports does not have any substantial bearing on our country but it proved wrong ultimately. The roll down of the global turmoil was also felt after the second half of 2008-09. The rectificatory stimulus packages declared by Govt. of India and RBI subdued the problems arisen out of it. Resultantly, a slow down in our economy was witnessed but we were spared from the negative effects experienced in many of the developed economies of the world. We were able to withstand the after math strongly.
• An expected GDP growth around 6.9% in 2009-10 may be turned as extremely satisfactory looking to the fact that there is a contraction in the leading economies of the world. India is poised for a much better growth ahead and we are expected to grow higher in the financial year 2010-11. Keeping in view, role of banks in the Indian context will be significant. The demand for credit from banking sector is likely to increase substantially. As per a general thumb rule, the normal credits pick-up and increased is supposed to be three times of the GDP growth. This may lead to a credit increase of not less than 20 to 25% in 2010-11 as we expect a GDP growth of 7 to 7.5% during the current fiscal.
• Revival of Industrial production and an upward trend in Automobiles, Pharmaceuticals and Real Estate sectors are signs of revival in GDP growth. However, the forthcoming Monetary Policy of RBI to be announced during April 2010 would clearly enunciate what would be the growth factors in the current year.
• The Banking Sector need to take forward various poverty alleviation scheme and welfare programmes to ensure that the objectives set under these schemes and programmes are achieved and the target group is benefited.
• Inflation has remained higher during the last couple of months. RBI has initiated certain necessary steps to tame the inflation and keep it under control. Although it is still in double digit, the expectations are that it would come down around 4.5 to 5% in the coming fiscal. Previously, the average number of inflation during the last 10 years was hovering around 4.5 to 5%.
• Recently, RBI has hiked Repo and Reverse Repo Rate by 25 basis points each, which is expected to increase further. As of now, the liquidity in the system is quite robust.
• On the front of agricultural production, as the monsoon was erratic, a short fall in the production of cereals during Kharif season was noticed but news for bumper Rabi crop is pouring in.
• The MSME sector contributes around 45% of the production in the country. Lots of initiatives have been introduced by the Govt. with a view to support the segment. Banks have also contributed handsomely for this cause and I suppose that the trend will be maintained by banks in future also.
• In the Budget speech for 2010-11, the Hon’ble Finance Minister, Govt. of India has expressed that banking services on a weekly basis in the villages having population over 2000 should be ensured latest by the end of March 2011 and a Road-map for this purpose was to be drawn by SLBC latest by March 2010. I am happy that SLBC, UP with the support of all banks has completed this mammoth exercise for preparing a Road-map to provide banking facility through any of the approved models in all the villages having population over 2000 on a weekly basis by March 2011.
• So far as performance of banks in the state of U.P. under the Annual Action Plan 2009-10 is concerned, an over all 68% achievement against the allotted annual target has been achieved. So far as progress under Agriculture and SME sector is concerned, it is almost 67% and 85% of the stipulated targets respectively. If we compare it with the performance in the corresponding period of last year, it may be termed as substantially higher.
• A good progress has also been made by the banks on the front of CD Ratio because it has also increased noticeably. I will place my views on the progress made by banks during discussions/deliberations on respective Agenda items.

At the end of his address, he expressed thanks to everybody who was present for making his contribution during the course of meeting and reach out to potent decisions so that the fixed goals are actualized and a realistic growth path is set for the state and its populace.

Shri R. K. Sharma, IAS, Agriculture Production Commissioner, Govt. of U.P. addressed the house and said that:-

• I feel very happy and privileged while attending this SLBC meeting to review the progress of banks as at the end of December 09 quarter.
• State Govt. has taken a decision to double the income of the farmers in the state within next 2 years. Consequently, banks have to play a very vital role. Banks may have to extend their all important help by nurturing Agriculture Sector and other allied sectors like Animal Husbandry, Fisheries, Dairy and Rural Service Sector so that the farmer could be able to supplement his income from Direct Agriculture. He desired that Departmental Heads of various concerned State Govt. Departments should make valuable contributions during discussion/deliberation on Agenda item so that this conceptualization may be converted into a reality.
• On the point of crop loans extended by banks to the farmers, he observed that the progress on this count need to be evaluated and it should be explored as to what are the reasons, which are holding back the progress in this regard so that these could be removed. State Govt. is all set to contribute their share for the cause of improving achievement in this area. A greater coordination between bankers and the State Govt. functionaries at district level is needed.
• The Panchayats may be found very instrumental and useful in proper and successful implementation of various schemes promulgated by the Govt. for welfare of the under privileged and unprivileged sections of the society. U. P. happens to be the largest State in the country having a mammoth Panchayat system. The Panchayati Raj Act, 1947 of U. P. is also the oldest one. U. P. houses almost 52000 Gram Panchayats, 820 Block level Nayay Panchayats and 71 Zila Panchayats.
• After the 73rd amendment in the Constitution of India, an emphasis is being laid down by Govt. of India for arranging fund transfer under NREGS & other Social Welfare Schemes through EBT system to facilitate quick transfer of funds and removal of the middle man. There are certain teething problems which have been noticed in the preliminary stage of its implementation which should be taken proper care of so that these may be removed. U.P. is the 2nd largest receiver of funds under NREGS amounting to approx Rs.8000/- crores and stream lining the fund flow is one of the priority areas. He indicated the issues relating to opening of Bank accounts and payment to job card holders for their wages through those accounts at various levels.
• As the Lead Bank responsibility for the districts of the state has been assigned to 9 major Commercial Banks, a better inter coordination among them is need of the hour for smooth implementation of the Social Security Schemes to yield desired results.
• Similarly, SGSY is a very ambitious and important scheme to eradicate poverty in rural folks. Any delay in sanction of a loan discourages the illiterate and poor rural masses. In case of Widow Pension Scheme, payment should be made on monthly basis and immediately on receipt from the Nodal Department. Any irregular and delayed payment defeats the whole purpose of the scheme. The misconception and enhanced expectation amongst the rural people about the “Wonder of Automation” has also increased the problem manifold, because, they understand that everything is possible just by click of a button.
• Bankers have done a commendable job by consolidating the information about hitherto un-banked villages having population over 2000 within our State with a view to provide banking services at least on a weekly basis by any of the approved model by March 2011 because it was a real Herculean task looking to the size and volume of population of our State and the short time available for it. He hoped that Bankers would continue with the same zeal and commitment to actualize the goal of providing banking services by March 2011 in all villages of the state having population over 2000.
• All Agricultural allied activities like Dairy, Fisheries, Animal Husbandry need to be treated at par with Direct Agriculture for their promotion and the same rate of interest should be applied for them as in the case of Direct Agriculture.
• Govt. is promoting the activity of fisheries in a big way under NREGS. We have aimed at having a pond dug in each Panchayat and small and marginal farmers would be encouraged to take up “Fishery” by supply of fingerlings under bank finance from Cooperative Sector. This will certainly add up to the income of the poor farmer. Similarly, we are also promoting Sericulture for the same reason.
• He requested the forum to take up the issue of lowering chargeable interest rate on agriculture allied activities for the simple reason that farmers are lured to take up these allied activities to supplement their income. It bewilders a farmer that he pays lower rate of interest on Direct Agriculture but has to pay higher rate of interest for Allied Activity purposes. more.

He summed up his address and expected that all these issues would certainly draw attention of all concerned and necessary steps would be initiated for finding out suitable solutions to them and banks would certainly play an important role in Rural Development.

Afterwards, the Roadmap for providing banking services by March 2011 in villages of the State having population over 2000 was launched by the distinguished dignitaries and a CD was also distributed amongst all bankers.

Shri N. S. Srinath, Executive Director, Bank of Baroda welcomed all dignitaries present and other participating Senior functionaries of the State Govt. and said that :-

• I am very happy to take part in this SLBC meeting. The forum of SLBC is unique in the sense that more than 10,000 branches of various banks are functional in the State and their performance on various parameters is reviewed on a quarterly basis at State level.
• Today’s SLBC meeting is a special one because the Roadmap for providing banking services through alternates model in villages in the state having population more than 2000 by March 2011 has been launched. All the bankers and State Govt. authorities deserve compliments for completing this voluminous task well in time. He confided that the same spirit will be taken forward to accomplish the goal of providing banking services in all these identified villages through any of the models by March 2011 which is almost one year from now.
• Banking industry in the country has done exceedingly well and stood well through the turmoil generated world over due to Sub-prime lending crises. It all could be made possible because of the timely and prudent steps taken by Govt. of India and RBI.
• The Rural Development is the most important challenge now a days and banks necessarily have a great role to play for which all of us should dedicate ourselves.
• In their pursuit to achieve the goal of 100% Financial Inclusion to promote inclusive growth, banks have done a good job and “No Frills Accounts” have been opened in a very good number throughout the country. In the State of U. P. 43 districts out of the total 71 have been declared as Financially Included so far and the work is in advanced stage in rest of the 28 districts making it possible for these districts to accomplish the task fast.
• The basic idea behind 100% Financial Inclusion programme is to ensure that the benefits of the economic growth of our country are percolated down to the last person and make “Banking a part of their lives”. To facilitate the common man, banking services need to be hassle free and simple in nature so that his productivity is not wasted in unproductive activities. Every Banker should be committed to this cause.
• The large population of educated youths in the country should be trained in one or other vocational skill so that he may earn livelihood for himself and his family through taking up self employment activities. Banks do have a role to play in it also and they are required to set up a RUDSETI in all the districts for imparting vocational training to the local educated unemployed youths. The State Govt. has to allot 1.00 acre of free land to banks to set up such institutes. I urge upon all the concerned State authorities to initiate all necessary action for expediting allotment of land to banks wherever necessary.

To conclude his address he complemented State Govt. officials, RBI & NABARD representatives and Bankers as well for their turnout in this meeting.

Shri D. P. S. Rathore, Regional Director, RBI also welcomed all dignitaries and senior colleagues from banks and Govt. and observed that:-

• Non participation of District Coordinators of Banks in DCC/DLRC meetings at district level is a matter of concern. He continued that a good number of complaints in this regard from various District Magistrates are pouring in since last few months. Even some of the Divisional Commissioners have raised their voice in this regard during meetings. All banks should take a careful note about it and it should be ensured that there is no chance of such a complaint in future. It is all the more important that there are certain banks whose name is reported quite often. They should be vigilant in future and preferably improve upon by adhering to RBI guidelines.
• Appropriate level of participation should be ensured both from Banks and Govt. as well in review meetings constituted at State and District levels under Lead Bank Scheme, which has also been reiterated upon in the Lead Bank Scheme.
• Banks should show a responsive and responsible attitude towards RBI and SLBC and ensure correctness of the data while reporting to them because it is the analysis of the data which sets the further course of action. It has been observed at times that the required data is not submitted by banks to RBI and SLBC despite several reminders. At times, the data reported is not found consistent, correct and commensurate with the one reported earlier. It would be in fitness of the things that a particular person is identified by each bank for submission of the data so that he may be approached in case of necessity and the correctness of the data may be ensured. He advised all the banks to act in right direction in this regard.
• SLBC has done a good job in preparing the Road-map well in time for providing banking services by March 2011 in so far un-banked villages in the state where population is above 2000. He congratulated SLBC for having taken the mission successfully. The higher management in RBI is concerned about this exercise because it will pave way for inclusive growth. In this connection, he mentioned that it has come to notice that some of the Lead District Managers in the State have excluded villages having population over 2000 and falling within vicinity of branch of a bank, which is not correct. He exhorted that all those villages having population over 2000 are to be provided with banking services atleast once in a week latest by March 2011.
• Some banks have done a good job in the area of Smart Card based Financial Inclusion. While appreciating the work done by Union Bank of India in Varanasi & Chandauli districts he hoped that other Banks would also follow the same and target of 100% Financial Inclusion would be achieved because technology based banking services are the only solutions for achieving cent percent Financial Inclusion. He observed that it is very difficult for banks to serve such a huge population manually. IT based banking services involve a huge investment and the State Govt. has a pivotal role to play in sharing the cost. He hopes that State Govt. authorities present here will take an early decision for implementation of EBT scheme. The responsibility of the State Govt. is very crucial in providing IT based services in rural areas.
• The target of cent percent Financial Inclusion in rest of the 28 districts in the State need to be achieved fast because the prescribed time limit has already elapsed and Reserve Bank of India is very serious about it.
• The Sick units in the State should be rehabilitated at a brisk pace. The Bankers must actively participate in purposeful discussions of this forum so as to derive the benefits.

Shri D. P. Mishra, Chief General Manager, NABARD greeted all the dignitaries and stated that:-

• The State Credit Plan was launched on 15.01.2010 by NABARD to set a direction for the credit flow in the State during 2010-11. The Annual Credit Plan for Banks in the State is prepared on the basis of Potential Linked Plan projected by NABARD for each district of the State. The State Credit Plan for the F. Y. 2010-11 has been fixed at Rs.51388.00 crores looking to the fact that the expected credit flow during 2009-10 by the banks in the State would be around Rs.40000.00 crores. Thus, the State Credit Plan 2010-11 will be showing a growth of around 20% over the achievement of banks in the previous fiscal. In the area of Agriculture Credit, it has been fixed at Rs.33820.00 crores in the State Credit Plan 2010-11 against the expected level of flow of credit to Agriculture under ACP 2009-10 at Rs.27000.00 crores and thus registering a growth of around 25%.
• We together have to take some effective steps to cover all eligible farmers in the State under KCC fold in a time bound manner. Similarly, we need to form and credit link JLGs to cover Sharecroppers, Tenant farmers and Oral lessees under Institutional credit. NABARD has set a goal of forming and credit linking one lakh JLGs. in the country. So far as our own State is concerned, we have set an aim to cover 20000 JLGs during Financial Year 2010-11 out of which, RRBs in the State have agreed to form and credit link almost 10000 JLGs. He was optimistic that the Commercial Banks would also be taking care of another 10,000 JLGs. He wished that SHGs, JLGs and Farmers’ Club may prove to be an excellent instrument for realizing the goal of Financial Inclusion.
• As far as credit flow under Agriculture Sector in the state is concerned, the achievement is around 67% and the growth is around 42% which is very attractive while compared to the position achieved in the last fiscal. Looking to the all India position of achievement, U.P. is still legging behind. Against the Annual Target on all India basis for credit flow at Rs.325000/- crores under agriculture sector, achievement upto 31.12.2009 has remained around Rs.248000/- which comes to around 75% of the target while in our State it is just 67%. We need to identify the constraints so that we are able to catch up with the all India position.
• As regards, agency-wise achievement in the state under agriculture during F.Y.2009-10, Commercial Banks have done an excellent job and have achieved 70% of the fixed target. However, in case of RRBs, the achievement is 63% which may be considered as satisfactory. While performance of Cooperative Sector is about 40% against the target and is evidently poor and has also adversely affected the collective percentage achievement. It is well known that there are certain problems with the Cooperative sector and some remedial steps have been suggested by Vaidyanathan Committee which would take some time to be implemented.
• So far as SHGs are concerned, almost 44 lacs SHGs have been credit linked in the country but in our State this figure is only 3.20 lacs. Looking to the size, population and number of rural poor in the State, there is a wide scope for improving the performance in this area and atleast 10 lacs SHGs should be formed. All banks should commit themselves to the cause, because a real revolution in the rural sector and more particularly in the women folk in our state may be brought through SHG movement.
• Similarly, Sharecroppers, Tenant farmers and Oral lessees belong to the most vulnerable section of the society and all of us should ensure that they are not denied their legitimate rights and are not deprived of bank-finance. A close monitoring is required so that we may be able to put up a much better performance in the next fiscal.
• For the cause of improving the income of the poor farmer, farmers club may prove quite instrumental. Atleast 1 farmer club should be promoted by each branch of the bank in the State.
• NABARD is doing its bit for the cause of Financial Literacy. A project has been undertaken in collaboration with UNDP in different areas for creating Financial Literacy in poor people. Village level meetings, Puppet Shows, Nukkad Nataks and Quiz programmes in the Schools are being organized to promote financial literacy amongst poor people. Wall Posters and Paintings have also been displayed. All these initiatives will surely culminate in improving demand for banking services and will ultimately lead to Financial Inclusion and promote inclusive growth.

Afterwards, Agenda-items were taken up through a Power Point Presentation.

Agenda No. 1: SLBC Meeting dt. 24.12.2009 – Confirmation of Minutes

The minutes of last SLBC Meeting held on 24.12.2009 was circulated amongst the members vide letter No.UP&UZ/36/SLBC/109 dated 11.02.2010. RBI had suggested certain modifications in Para 4 under Agenda No.8 in Minutes. The minutes were confirmed by the house with the modifications made by RBI.

Agenda No.2: Status Report on Action Points of the last meeting

Action Point No. 1. A. : Exemption of 10% Recovery Charges in RC Filed A/cs that have been “compromised” by banks under “OTS”.

Action Point No. 1.B.: Waiver of 10% Recovery Charges in A/cs where RCs were issued earlier and covered under ADW&DRS 2008.

Both the issues are reported to have been taken up by the DIF with the Revenue Deptt., Govt. of U.P. on 11.03.2010. DIF was requested to follow-up with the Revenue Deptt. for expeditious decision.

Action Point No.2&3.: Problem of payment of overdues of banks in Govt. Guaranteed accounts & Delay/Non Payment of interest against the investments made by banks in Bond floated by Govt. Undertakings, Corporations & Institutions.

Shri Rakesh Krishna, Additional Director, DIF asserted that both these issues should be dropped from the list of pending action points of SLBC (UP) in view of the decision taken in the meeting held under the Chairmanship of Chief Secretary, Govt. of U. P. on 04.03.2010 that all concerned banks should take up the issue individually with the concerned Govt. Institution/Corporation on a case to case basis, on merits.

Shri Dinesh Sharma, Chairman, Baroda U. P. Gramin Bank said that the issue pertains to RRBs also and the amount involved is heavy and any amicable settlement could not be reached despite persuasion of this august house for quite some time. He was of the opinion that individual bank will not be able to find any solution for release of the payment stuck up for long with the concerned department and requested the house to review the matter in this light.

Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda opined that to continue with the issue in the SLBC meeting as an Action Point does not mean that individual accounts will be discussed in this forum. As substantial amount of Bank dues are locked up in various Govt. Guaranteed accounts, this forum may prove to be more successful and purposeful to raise the issue before the Govt. for immediate redressal. He asserted that this is quite old issue and a decision to resolve it should be taken up at an early date, although, it is to be settled under mutually agreed OTS.

Shri Rakesh Krishna, Additional Director, DIF said that in each case the Institution/Corporation is different. Most of the cases belong to Industrial Development Deptt. and there is no role of SLBC in this particular issue.

Shri D. P. S. Rathore, Regional Director, Reserve Bank of India said that the issue involved is if the matter may be dropped from the list of pending Action Points of the Agenda of SLBC or not. As bankers are not agreeing to drop the issue from the list of pending Action Points, it should be allowed to remain on the Agenda and the Govt. may be requested to reconsider the issue because sizeable amount of bank dues are locked up in certain Govt. Guaranteed Accounts. Simultaneously, every concerned bank need to approach individually the concerned Govt. Institution/Corporation for a settlement on one to one basis in each case.

Action Point No. 4: Pending Margin Money claims under KVIC/KVIB Schemes.

Shri R. S. Pandey, State Director, KVIC, Lucknow informed the house that the matter is under review of Chief Executive Officer, KVIC and the issue has been discussed by him with state officials of both KVIC and KVIB. He further informed that the subsidy has already been paid to 124 units and in rest of the 178 units where subsidy is yet to be released/paid, the matter stands referred to Head Office, Mumbai for necessary instructions. As regards other units referred by banks for release of subsidy claims in 2nd phase, a review visit is yet to be carried out in case of 80 units because KVIB had submitted them late and a fresh proposal is to be submitted in respect of these units to Head Office for a decision. So far as the issue of payment of subsidy claims in respect of 178 units which were referred by banks in 1st phase is concerned, it would be resolved within a month’s time.

Action Point No. 5: Exemption in Stamp Duty for High-Value Agriculture Projects

It was requested by the DIF to make them available notifications, if any issued on the subject matter by other State Govts. so as to give them a picture as to what is going on in other states and to enable them to make a concrete proposal and submit it to the Govt. A request was made to DIF also from Bankers side to collect the information from their counter parts in other State Governments.

Action Point No. 6: Registration of Equitable Mortgage (Noting of Lien)

It was informed by DIF that a proposal was handed over to the Tax & Registration Deptt., Govt. of U. P. after the meeting held on 04.03.2010 under the Chairmanship of Chief Secretary, Govt. of U. P. and the matter is under their active consideration.

Shri Shailendra Kumar, Chief Manager, SLBC was of the view that no decision is coming for the last 2 years despite regular follow up and since equitable mortgage already attracts stamp duty, only a token fee should be charged in this regard.

Action Point No. 7: Amendment regarding auction of Agricultural Land of defaulting borrowers and leaving 3.125 acre of farm land with him in case of its auction.

After the meeting held on 04.03.2010 under the chairmanship of Chief Secretary, Govt. of U. P., a meeting was convened by DIF with representatives of Lead Banks wherein it was informed that the compulsion of leaving 3.125 acres of land with the farmer in case of auction for realization of bank dues may be relaxed/reduced to 1.125 acre if banks agree to grant relaxation to the farmer for cultivation of one crop after issue of the RC. DIF informed that the matter since stands referred to Revenue Deptt., Govt. of U. P. on 11.03.2010 for a decision.

Action Point No. 8: CD Ratio

The recommendations made by the Sub-Committee of SLBC (UP) formed to monitor the progress of CD Ratio in Districts below 40% mark have been forwarded to the Principal Secretary/Secretaries of concerned Govt. Deptt. and DIF is also pursuing with them regularly. Simultaneously, the Sub-Committee will continue to monitor the progress in future also.

In view of the above, house was requested to drop the issue from the list of pending Action Points.

Shri Rakesh Krishna, Additional Director, DIF opined that as the Sub-Committee was constituted in accordance with the RBI directives, the issue should continue as an Action Point till CD Ratio in the concerned districts achieve the stipulated level of CD Ratio.

Shri Shailendra Kumar, Chief Manager, SLBC said that the Action Point pertained to formation of a Sub-Committee to monitor the CD ratio in districts below 40% mark, submission of its report and necessary follow up action. All these tasks have been accomplished. The Sub-Committee would also continue to monitor the progress in this regard in future also. So this matter qualifies for being dropped from the list of pending action points of SLBC.

Shri Subhash C. Ahuja, General Manager, Bank of Baroda & Convenor SLBC said that CD Ratio forms as a regular item of the Agenda of SLBC and is discussed regularly, as such, these districts having low CD Ratio will naturally be monitored through this mechanism.

Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda said that there is no point in discussion on CD Ratio as an Action Point because it forms part of regular Agenda of SLBC.

After detailed discussions, it was decided by the house that this issue may dropped hence forth from the list of pending Action Point of SLBC.

Point No. 9: Debt Swap Scheme It was submitted by SLBC that the subject matter has been included as a regular Agenda Item and requested the house to drop it from the list of pending Action Points henceforth.

Shri Rakesh Krishna, Additional Director, DIF said that Debt Swap Scheme is not isolated scheme but it is a part of Financial Inclusion. It was proposed earlier that every Lead Bank should adopt atleast 5 villages in their Lead Districts to make them free from informal credit. We have yet to achieve substantial progress in this direction hence; the subject matter should not be dropped from the list of pending Action Points.

Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda opined that as the subject matter has been included as a regular Agenda Item, it has no meaning to continue in the list of pending action points.

Shri Rakesh Krishna, Additional Director, DIF said that looking to the importance attached to this issue, it qualifies for being discussed at a prominent place in the Agenda Note. There is no reservation about it being dropped from ATR but there is virtually no progress reported by certain banks which is a matter of concern. It should be ensured by all banks that necessary circulars have been issued by them to their branches so that branches are sensitized about the scheme and a worth while progress is achieved. Until then, the issue should be allowed to continue in the pending Action Points.

Shri D. P. S. Rathore, Regional Director, Reserve Bank of India upheld that the point raised by DIF is valid enough and the issue may continue to surface in ATR for some more time.

Shri Shailendra Kumar, Chief Manager, SLBC said that the extension services of State Govt. would be required for identification of beneficiaries under the scheme otherwise, banks would feel difficulty in spotting the real beneficiaries as no mechanism is available with banks for this job at present. Moreover, there is no data available as to which particular village is saturated or not.

Shri Rakesh Krishna, Additional Director, DIF informed that the same problem is coming across all over India. Money Lending Acts are in vogue in almost all the states which regulates the money lending activity, but, people always tend to escape its purview. However, whatever help is required from the Govt. for the success of the scheme, the entire Govt. machinery is behind bankers but there are certain reservations in issuing “Certificate of indebtedness”. We may take a clue from “Krishak Sathi Scheme” of NABARD which has inbuilt provision for obtaining an affidavit from the prospective beneficiary for making available the institutional credit to him.

Shri Ravi Prakash Arora, Special Secretary, Agriculture, Govt. of U. P. affirmed that the issue should not be dropped from the ATR as it is very important from the point of view that Government has a plan to double the income of the farmer.

Shri Shailendra Kumar, Chief Manager, SLBC enquired if Agriculture Deptt. is going to extend any support to banks for identification of a genuine person so that bank may come forward and play their role. Shri Ravi Prakash Arora, Special Secretary, Agriculture, Govt. of U. P. said that for assistance required by banks from the State Govt. necessary orders would be issued for District level functionaries to join hands with banks for the success of the scheme.

Shri Subhash C. Ahuja, General Manager & Convenor, SLBC (UP) pointed out that a very valid point has been raised by Shri Rakesh Krishna, Additional Director, DIF and all banks should necessarily issue circular regarding Debt Swap Scheme for the ground level functionaries so that they may implement the scheme with commitment.

Point No. 10: IT enabled services by Banks

It was informed by SLBC that a meeting of Task Force under the Chairmanship of APC, Govt. of U. P. was held on 22.01.2010. Further action is awaited for want of a breakthrough.

Shri Rakesh Krishna, Additional Director, DIF informed that the meeting could not be organized due to certain exigencies, however, it is likely to be organized in the month of April 2010 because State Govt. is very keen about EBT Scheme.

Point No.11: To provide Banking Services by March 2011 in villages in the State having population over 2000.

It was informed by SLBC that the Roadmap for providing banking services latest by March 2011 in hitherto un-banked villages having population over 2000 has been prepared and launched today in this SLBC meeting and requested to drop the Action Point from ATR.

Shri Rakesh Krishna, DIF opined that it should now be discussed as a regular Agenda Item.

Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda remarked that the Roadmap has since been completed and launched therefore, the action point may be dropped henceforth from the ATR, however, progress achieved in the direction of providing banking services in so far un-banked villages in the State having population over 2000 should be put up with the Agenda Note in every SLBC meeting, now onwards.

Agenda No.3: Review of progress under Annual Credit Plan – 2009 - 10

The progress as at Dec.’ 09 was put up before the house.

Agenda No.4: Kisan Credit Card/Crop Loan, PAIS & RKBY

Shri Ravi Prakash Arora, Special Secretary, Agriculture, Govt. of U. P. said that :-

• Crop loan factor is very important from the point of view of doubling the income of the farmer in the state. In Punjab per hectare loan availability is Rs.19480/-, in Haryana it is Rs.16678/- but in our State it is just Rs.5599/-.
• Loan Mela may be organized in a big way with a view to maximize agriculture portfolio which is at present around Rs.19747.82 crores.
• There are more than 2.00 crores farmer families in the state and 1.77 crore KCCs are shown as issued cumulatively which clearly indicate that this figure includes both KCCs i.e. fresh issued and renewed. There is a common belief that only around 25% KCCs are active.
• In the State, more than 90% of the farmers belong to SF/MF category while only about 10% are really resourceful. Banks should come forward to lend crop loans with a commitment to such poor and starved farmers. Ground level functionaries need to be sensitized for extending financial assistance to such farmers. Further, corrective steps are required in certain districts where the ADW&DRS’08 beneficiaries are still deprived of the KCC facility.

Shri L. Venkateshwarlu, IAS, Secretary, Fisheries pointed out that the farmers engaged in allied activities such as Horticulture, Animal Husbandry, Poultry, Fisheries etc. should also be extended bank finance at a rate which is charged by the bank for Direct Agriculture activities. The number of farmers engaged in such activities is low in our State. He was of the view that seriousness and commitment are necessary for actualizing real results.

Shri D. P. Mishra, Chief General Manager, NABARD said that the number of KCCs shown as issued is really a matter of concern. We need to collect information from each branch of every bank about the real number of operative KCCs with them so as to ascertain the actual number of farmers covered under KCCs and that of who have not been covered as yet. Let us do it right now. As a general perception what we gathered during our field visits, only 20 to 25% of farmers are enjoying facility of KCC.

Shri Rakesh Krishna, Additional Director, DIF informed that the Directorate has a certain information about the farmers who have been issued KCCs and those who are still without a KCC. This data will certainly help us in identifying such farmers that have not been issued a KCC till now.

Shri Subhash C. Ahuja, General Manager & Convenor, SLBC (UP) said that this is a very vital data and will help Banks to cover more and more farmers under the KCC Scheme.

Shri D. P. S. Rathore, Regional Director, Reserve Bank of India informed that there are standing instructions of Reserve Bank of India that all eligible and desirous farmers should necessarily be issued a KCC. The genuineness of the data is real problem and it is causing sort of a communication gap. It is very important that the difference between the data generated by the Govt. and the banks should be removed fast. As far as the problem pertaining to KCC in Basti and St. Kabir Nagar districts is concerned, all banks should take a note of it and ensure that the problem is sorted out without any delay. Lead District Officers of RBI in these districts should also look into this.

Shri M. D. Mallya, Chairman & Managing Director, Bank of Baroda summed up the discussions stating that 2 issued have emerged during the discussions. One is to ensure that all deserving and desirous farmers are necessarily issued a KCC and second one is the difference in data between the Govt. and the Bankers. The data naturally need to be validated quickly for precipitation of the realistic picture.

Dr. M. Dutta Gupta, Regional Manager, AIC of India Ltd. informed the house that :-

• The State of U.P. was under drought during last Kharif 09 season and as a result special care was taken by banks for coverage of crop loans which gave way for highest crop insurance coverage during last so many seasons. Almost 14.5 lacs farmers were insured for an amount of Rs.250.00 crore and premium worth Rs.50.00 crore was paid. During Kharif season we have calculated claim for 10 crops based on the yield submitted by the State Govt. and an amount of Rs.128.00 crore will be paid towards settlement of claims.
• During Rabi 2009-10, 7 crops have been notified and crop loans worth Rs.570.00 crores have been insured in case of 6.50 lacs farmers so far. Cut off date for payment of premium is 31st May 2010. All banks are requested to instruct their nodal branches to cover crop loans under Rabi season within the cut of date.
• As per the guidelines of Govt. of India, we are doing awareness programmes for bankers as well as farmers. We have gone to the training centers of Allahabad Bank and Bank of Baroda to conduct these programmes. We request all other Commercial Banks, RRBs to arrange for such training programmes by us.

Agenda No.5: Credit Deposit Ratio

Progress under the Scheme as at Dec.’ 09 was put up before the House.

Shri Rakesh Krishna, Additional Director, DIF stated that the figures pertaining to credit deployed by the branches out side the state should not be accounted for at both the places i.e. in the state where unit is functioning and also in the state where branches are situated which have deployed the credit.

Shri N. S. Srinath, Executive Director, Bank of Baroda opined that the credit should be accounted for in favour of the place where it has actually been deployed. The information in respect of the District of Sonebhadra includes credit extended in the district by bank branches outside the state because the unit is very well situated in Sonebhadra District itself and it has pushed the CDR of the District Sonebhadra while in the data displayed on RBI website does not include this amount of credit deployed by outside U. P. branches. Simultaneously, RBI does not reckon the advances of Cooperative Sector for the purpose of computation of CDR of the Districts and this has created difference in the figure of CDR as reported by RBI and the concerned LDM.

There should be conscious efforts by the banks that the CDR improves for the State as and more especially in those districts which are below 40% level.

Shri Rakesh Krishna, Additional Director, DIF said that in certain Districts the CDR of few individual banks is very high while the CDR of the District is low. It is indicative of the fact that some banks are not doing well in these Districts which should not be the case. Such banks should also strive hard and join hands to raise the CDR of the particular Districts.

Shri S. S. Ghugre, Field General Manager, Union Bank of India was of the view that the districts with CDR level below 40% are concentrated in the Eastern part of the state however, most of them have started showing upward trend as of Dec.09. The places without sufficient banking facility have also been identified so that a bank branch is opened and more credit is provided. Certain banks have also been underlined which are having a weak Advances portfolio despite presence of a good number of their branches. A reference has also been made to such banks by the Sub-Committee as a follow up action.

Agenda No.6 Advances to Micro, Small and Medium Enterprises

Progress under the Scheme as at Dec.’ 09 was appraised to the House.

It was informed that a monthly special SLBC (UP) meeting is being convened regularly for resolution of the credit issues pertaining to MSME sector in terms of special package declared by Govt. of India for this sector.

The efforts of SLBC have been appreciated at all levels including Trade & Industry Associations.

Shri Rakesh Krishna, Additional Director, DIF said that banks should make concerted efforts for promotion of the Artisan Credit Card scheme. There is no dearth of demand for issuance of Artisan Credit Cards.

Shri N. S. Srinath, Executive Director, Bank of Baroda said that banks should reiterate the scheme to the branches and sensitize them also so that the performance is considerably improved.

Agenda No.7 : Financial Inclusion

Progress upto 31.12.09 was put up before the House.

Shri Shailendra Kumar, Chief Manager, Bank of Baroda informed the house that 43 Districts in the state have been declared as Financially Included so far and in the rest 28 districts, the progress is in advance stage and these will also be saturated soon. As is the case with Etawah – a lead district of Central Bank of India, there may be certain districts where the work related to Financial Inclusion has been completed but a formal declaration to this effect could not be made in DCC meetings for wants of certain paper formalities; an early proclamation should be made soon.

Shri Subhash C. Ahuja, General Manager & Convenor, SLBC(UP) made an appeal to the Controllers of the banks present in the meeting that the target of Financial Inclusion should be accomplished by 31.03.2010 positively in rest of the districts.

Shri D. P. S. Rathore, Regional Director, RBI stated that initially it was considered to open a deposit account of atleast one member in each family would serve the purpose of the Financial Inclusion. Now, it is being considered essential that every person/family which has been included must enjoy the facility of some sort of institutional credit. Such an approach will also help to raise the CDR and minimize occurrence of complaints related to bank finance.

Agenda No.8: Recovery-under Priority Sector, RC Filed A/cs, Govt. Sponsored Scheme & NPAs

Progress upto 31.12.09 was put up before the House. The details about scheme-wise, Recovery under NPA and RC filed accounts and Priority Sector etc. was discussed and a comparison with the figures of last year for corresponding period was made.

Shri N. S. Srinath, Executive Director, Bank of Baroda requested the concerned State Govt. Authorities to extend their sincere support for recovery of the bank dues. He also suggested banks to step up their recovery efforts.

Agenda No.9 : Golden Jubilee Rural Housing Scheme

Progress upto 31.12.09 was put up before the House.

Agenda No.10 : Review of progress under various poverty alleviation & self employment generation programmes

A. Swarn Jayanti Gram Swarojgar Yojana (SGSY)

Progress upto 31.12.09 was put up before the House.

Shri N. S. Srinath, Executive Director, Bank of Baroda requested concerned Govt. Authorities to apprise the latest position of allotment of land for RSETIs in the State. Shri Sanjeev Kumar, IAS, Commissioner, Rural Development, Govt. of U.P. informed that a proposal for allotment of free of cost land to the banks in respect of 48 Districts has been submitted to Govt. for a Cabinet decision. The issue is expected to be resolved soon.

B. Swarna Jayanti Sahari Rojgar Yojna (SJSRY)

The scheme has been revised now and the process of identification of beneficiaries has since been completed. As per the data submitted by Nodal Department, 2160 applications out of the applications sponsored, have been sanctioned by banks and disbursement has been made in 2109 applications.

C. Prime Minister’s Employment Generation Programme (PMEGP)

Progress upto 31.12.09 was put up before the House.

Shri R. S. Pandey, State Director, KVIC informed the House that 2303 projects have been disbursed by banks to the tune of Rs.75.08 crores. Almost 7826 cases involving the margin money of 166.00 crores have also been sanctioned by banks. The total amount of Rs.122.00 crores against the margin money has been parked with 10 nodal branches of banks. Almost Rs.75.00 crores worth margin money has been released by the nodal branches. 31.03.2010 is the last date for release/utilization against the cases sanctioned by banks. Upto the last month, Margin Money worth Rs.38.00 crores was utilized by banks. Compared to the last month, the progress under the scheme is quite satisfactory but banks need to claim/utilize margin money against all sanctioned cases, upto 31.03.2010.

Shri K. K. Mathur, Senior Manager, SLBC requested that the PMEGP should be declared as State Sponsored soon because quick mortality has been noticed in some of the cases sanctioned/disbursed last year. It is all the more necessary to guard the interest of the banks because the loan component has now been raised substantially under the scheme.

D. Saghan Mini Dairy Pariyojna

Dr. Mohan Swaroop, General Manager, SMDP informed the House that out of 12211 applications, almost 85.77% have been sanctioned by banks, however, disbursement is still awaited in 6456 cases. Banks should necessarily make disbursement in all sanctioned cases. Recovery under the scheme is the highest in the State and banks should be motivated to lend proactively. Marketing tie-up arrangements have also been suitably taken care of. There is a good scope for employment generation under the present scheme as the scheme now permits unit of 2,4,6,8 and 10 milch cattle which caters to the need of a wide range of farmers. The unit cost has also been suitably revised in consultation with bankers so that good quality of milch cattle may be purchased. Beneficiaries under the scheme have also been identified for the next financial year. He requested that interest in case of Allied Activities should also be charged by banks at a rate as is charged for crop loans.

Shri N. S. Srinath, Executive Director, Bank of Baroda observed that it is heartening to note that the recovery under the scheme is good. Interest on crop loans is cheaper compared to the interest applicable to Allied Activities because Govt. of India provides interest subvention of 3% to banks otherwise, it is the same rate of interest for all the activities under the Agriculture Sector.

E. Special Component Plan

Progress upto 31.12.09 was put up before the House.

Shri P. C. Singh, General Manager, UP SC Financial & Development Corpn., Govt. of U.P. informed that 125 cases already sanctioned by banks are pending for disbursement of loan. The entire amount of subsidy eligible as per the target fixed under the scheme has already been parked with the banks for the first time. If applications pending with banks are disbursed, the target would be achieved. Banks should appropriate the entire subsidy released in one go and interest should be charged on “Loan amount net of the Subsidy”.

The progress under the scheme is quite satisfactory.

F. Mukhya Mantri Gramodyog Roajgar Yojna – KVIB Scheme

Progress upto 31.12.09 was put up before the House.

G. Manyawar Shri Kanshi Ram Ji Alpasankhayak Swarojgar Yojna

Progress upto 31.12.09 was put up before the House.

H. Margin Money Scheme for Backward Class

Progress upto 31.12.09 was put up before the House. Shri N. S. Srinath, Executive Director, Bank of Baroda requested all Banks to bring down the pendency to zero level by the end of current fiscal.

I. Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)

Progress upto 31.12.09 was put up before the House.

Shri Bhavnath Singh, Special Secretary, Social Welfare, Govt. of U.P. informed that the banks have done good job by extending financial support to all candidates eligible and desirous under the SRMS scheme. We should thank banks for their sincere cooperation. The progress under the scheme in our state has also been applauded by the authorities of Govt. of India.

Shri N. S. Srinath, Executive Director, Bank of Baroda said that bankers are thankful for the appreciation showered on them for their performance under the scheme.

Agenda No.11: Financial Assistance to Minority Community

Progress upto 31.12.09 was put up before the House.

The house was informed that as per 15 Point Programme of Prime Minister the current year is the last year for increasing the level of advances to Minority Communities from previously mandated level of 6% to 15%. Banks were requested to step up their performance and ensure reporting of actual data so that the realistic picture may be reflected. RRBs need to be more cautious and specific about reporting of the data.

Agenda No.12: Swarojgar Credit Card

Progress upto 31.12.09 was put up before the House

Agenda No. 13 : Submission of LBR 2 & 3

The house was apprised that The Chief General Manager, NABARD had expressed opinion in the last SLBC meeting for discontinuation of this Agenda item because it had lost its relevance and purpose due to non receipt and analysis of required data from the banks.

Shri D. P. Mishra, Chief General Manager, NABARD informed that almost 2 & half years back a team was constituted in the Central Office of RBI, Mumbai to revise the LBR Returns and a new system was devised also but it is yet to be introduced. However, there is no doubt about it that the present monitoring and information system of LBR has lost its relevance and purpose because the submission of these returns by banks is almost at zero level and consequently, there is no sense in continuing with it and it is as good as being “Dropped”.

Shri D. P. S. Rathore, Regional Director, RBI stated that a circular is likely to be issued by RBI and as such, we may continue with the present system for some more time and a final view may be taken after the next SLBC meeting. We may now defer to drop it from the Agenda for some more time.

Agenda No.14: Self Help Groups

Progress upto 31.12.2009 was put up before the House.

Agenda No.15:

(A): Scheme For Setting-up Agri-Clinic & Agri-Business Centers for Agricultural Graduates

Progress upto 31.12.09 was put up before the House, per which -23- units have been sanctioned by banks amounting to Rs.72.73 lacs.

(B) Capital Investment Subsidy Scheme for Construction/Renovation/Expansion of Rural Godowns

Progress upto 31.12.09 was put up before the House.

Shri D. P. Mishra, Chief General Manager, NABARD said that the progress for setting up of Agri-Clinic & Agri-Business Centre is very slow and NABARD has released subsidy for 31 cases only uptil now in the current year. Emphasizing the importance of these schemes of National importance, he requested all the banks to actively participate.

Shri N. S. Srinath, Executive Director, Bank of Baroda mentioned that the scheme for setting up Agri-Clinic & Agri-Business Centre has not picked up all over the country to the desired level. Reluctance on part of the Agriculture Graduates to set up Agri-Clinic & Agri-Business Centres due to the viability factor might have hindered the progress under the scheme. To encourage and allure the agriculture graduates, banks should extend hassle free financial assistance under the scheme. Lead Banks in their Lead Districts should always be on a look out for suitable agriculture graduates and motivate them to set up Agri-Clinic & Agri-Business Centers. Looking to the size of the state the number of cases financed by banks under the scheme is for construction of Rural Godown is quite low & Bank should put up concerted efforts atleast in potential districts.

Dr. S. Saravanavel, General Manager, NABARD informed that earlier agricultural graduates were eligible under the scheme for setting up Agri-Clinic & Agri-Business Centres. Now, Diploma holders in agriculture and allied sectors and general graduates having done post graduation in agricultural sciences are also eligible under the revised eligibility criteria. This is a welcome change because the scope for the target group has been considerably widened now and the scheme needs to be promoted with new vigour and commitment.

Agenda No.16: Crime Against Banks

It was informed that no new issue has been added. However, no worth while progress has been achieved in the old cases, which are continuing for long now.

Agenda No. 17: Debt Swap Scheme

Progress upto 31.12.09 was put up before the House.

Shri N. S. Srinath, Executive Director, Bank of Baroda wished that Punjab National Bank should share their secrets about their success in this area in the States of Punjab & Haryana. It would naturally be a learning experience for others.

Ms. Mani Awasthi, Asstt. General Manager, Punjab National Bank stated that the farmers who had repaid their loans extended under KCC scheme were covered by us under Debt Swap Scheme.

Shri N. S. Srinath, Executive Director, Bank of Baroda stated that banks having significant presence in the State should make concerted efforts for the progress under the scheme. As we are well aware of the concern of the State Govt. in this regard, we must register a good show.

Shri Rakesh Krishna, Additional Director, DIF said that banks have not shown any focused attention for identifying atleast 5 villages in their Lead Districts for implementing the Debt Swap Scheme in a big way and make these villages debt free. Some of the lead banks in the state have not been able to achieve success under the scheme.

Shri N. S. Srinath, Executive Director, Bank of Baroda suggested that a small Sub-Committee of SLBC comprising of members from 3 – 4 Lead Banks may be formed and it should discuss the related issues and its findings may be put up in the next SLBC meeting for deciding an action plan to take the scheme forward. Moreover, this Sub-Committee may also collect information about the progress achieved by banks. The issues holding back the progress of the scheme may also be crystallized by the Sub-Committee. All these things will surely enlighten our way towards successful implementation of the scheme.

Agenda No. 18: Joint Liability Groups

Agenda No. 19: Any other Issue with the permission of Chair.

(A) High Level Committee to Review Lead Banks Scheme: Providing banking services by March 2011 in villages having population over 2000.

A Roadmap for providing banking services by March 2011 in villages having population over 2000 was launched earlier during the meeting.

(B) Interest Subsidy Scheme for Housing the Urban Poor.

Convener SLBC informed that a meeting on this subject was held on 26.02.2010 and the State Nodal agency – SUDA was entrusted the responsibility to allocate District-wise targets for their onward distribution amongst banks operating in a particular district. SUDA has just informed that the process of finalization of District-wise targets is under way and these will be advised soon to SLBC.

(C) Report on the High Level Committee to Review Lead Bank Scheme – Implementation of the Recommendations.

The RBI Circular No.RPCD.CO.LBS.HLC.BC.NO.56/02.19.10.2009-10 dated 26.02.2010 issued by Chief General Manager (RPCD), RBI, Central Office, Mumbai was circulated as Table Agenda amongst the members.

Shri Ram Lal, Dy. General Manager, Reserve Bank of India stated that the action taken by banks on various recommendations made by the committee constituted under the Chairpersonship of Ms. Usha Thorat, Dy. Governor, RBI to review the Lead Bank Scheme should be informed to the respective Regional Offices of RBI on quarterly basis. It was submitted by SLBC that Banks have already initiated suitable action in the light of these recommendations on some of the issues related to establishing of FLCC, setting up of RUDSETIs, Financial Inclusion, Constitution of Sub-Committees of SLBC for specific important task and implementing IT enable services through BC model etc. Some of the banks have already introduced IT enable services in rural areas on Pilot Basis in selected districts. All Banks are requested to submit quarterly monitoring report on time as this need to be submitted to Central Office, RBI and Govt. of India on a regular basis.

Shri Suresh C. Arya, Senior Research Officer, Govt. of India, Ministry of Finance expressed thanks for giving him an opportunity to address the forum and being benefited by the information and deliberations of this meeting.

Shri Arya informed that now Govt. of India officials are attending SLBC meetings of different states to get the first hand information and also knowing the ground realities. He made certain observations on still better coordination amongst various stakeholders of the developmental process, lending under DRI, KCC financing and achievement of sub targets prescribed by Govt. of India for women and SC/ST beneficiaries under SGSY. Expressing the Govt. of India’s concerns on large number of complaints under Education Loans, he requested banks to extend finance under the existing scheme to eligible applicants. He stated that the Interest Subsidy Scheme for Education Loans is in the offing and on the verge of finalization by IBA.

Towards the end of the meeting Shri Dinesh Sharma, Chairman, Baroda, U. P. Gramin Bank proposed a “Vote of Thanks” to the House.

Action - Points of SLBC Meeting Dt.23.03.2010

During the deliberations/discussions of SLBC meeting held on 23.03.2010, following action points emerged for implementation.

SN	Subject	Issue	Status	Required Action	Latest Position
1.	Recovery	(A) Exemption of 10% Recovery Charges in RC filed a/cs that have been “compromised” by banks under “One Time Settlement Scheme”. (B) Waiver of 10% Recovery Charges in accounts where RCs were issued earlier and covered under ADW&DRS, 2008 now.	DIF had desired the figures of recoveries made by banks in RC filed accounts compromised under OTS Scheme and the 10% Recovery Charges paid against them.     DIF had desired amount of debt waiver by banks under ADW&DRS, 2008 to proceed into the matter. However, at the request of SLBC, Commissioner & Secretary, Board of Revenue, Govt. of U.P. has recommended State Govt. for favourable consideration in the matter.	DIF to take up the matter with State Govt. in larger public interest for quick decision in the matter as the issue is pending since long.       DIF to pursue with State Govt. for an early decision in the matter as the issue is pending since long.	DIF has taken up both the issues with Deptt. of Revenue, GoUP on 11.03.2010. DIF is requested to follow up with Deptt. of Revenue, GoUP for an expeditious decision. (Action: DIF, Govt. of U.P.)
2.	Overdue in Govt. Guaranteed A/cs	Problem of payment of overdue of banks in Govt. Guaranteed A/cs.	Approximately, an amount of Rs.657.55 crores of banks (as on 31.12.09) is locked-up in Govt. Guaranteed A/cs.	State Govt. is required to arrange for a settlement in all such Govt. Guaranteed Accounts without further delay as the matter has been pending for past many years.	As per the decision reached in the meeting held under the Chairmanship of Chief Secretary, GoUP, each bank was required to negotiate cases on one to one basis with the concerned. Since issue is quite old and no concrete action has so far been taken to resolve the issue, the house desired the GoUP to initiate adequate measures for an early resolution of the matter.   (Action: DIF & IDC, Govt. of U.P.)
3.	Non-payment of interest/principal amount in Govt. Guaranteed bonds/investment	Delayed/non-payment of interest against the investment made by banks in bonds floated by Govt. undertakings, corporations & institutions.	Approximately, an amount of Rs.113.87 crore of banks (as on 31.12.09) is locked-up in Govt. Guaranteed Bonds/ Debentures/Other Securities.	State Govt. is required to arrange for a settlement in all such Govt. Guaranteed Bonds/Investment Accounts without any further delay as the matter has been pending for past many years.	As per the decision reached in the meeting held under the Chairmanship of Chief Secretary, GoUP, each bank was required to negotiate cases on one to one basis with the concerned. Since issue is quite old and no concrete action has so far been taken to resolve the issue, the house desired the GoUP to initiate adequate measures for an early resolution of the matter.  (Action: DIF & IDC, Govt. of U.P.)
4.	Pending Margin Money Claims under KVIC/KVIB Schemes	Nodal Deptt. should release subsidy in all old pending cases pertaining to KVIC/KVIB. The matter may be referred to Chief Secretary, Govt. of U.P.	304 units verified.  63 found eligible for subsidy.  75 cases are eligible for subsidy. Notices issued to 136 units for completion of certain paper formalities.30 cases are sub-judice. Nearly, 600 cases have become time barred.	As per a decision in the SLBC meeting dated 27.03.2008, all concerned banks have submitted a list of pending subsidy claims (period 2000-01 to 2004-05) to the State Director, KVIC. KVIC to speed up decision in the matter as the matter is pending since long.	Matter in respect of 178 units found eligible out of the list of cases submitted by banks in 1st phase stands referred to Central Office, KVIC, Mumbai and a resolution within a months time is expected. Instructions in respect of 80 units which were found eligible in the list submitted by banks subsequently also stands referred to Central Office, KVIC, Mumbai. KVIC to expedite final decision in the matter.  (Action: KVIC)
5.	Stamp Duty	Exemption in State Stamp Duty for high value agriculture projects upto Rs.10.00 crore.	High Value Agril. project such as cultivation of medicinal/aromatic plants, horticulture, pisciculture etc. involve an investment of Rs.50.00 lacs to Rs.10.00 crore which attract huge amount as stamp duty and is proving as a retardant for these projects to come up in the state.	DIF to follow up with the Govt. for an early decision in the matter.	DIF was requested to collect relevant information from their counter parts in other States and make a concrete proposal to be put up before the Govt. for a favourable decision. (Action: DIF, Govt. of U.P.)
6.	Registration of equitable mortgage (Noting of Lien)	In view of the focus on Retail Financing, registration of equitable mortgage has assumed importance to provide comfort to financing institutions.	No such facility is available in the State of U.P. However, State Govts. of M.P., Gujrat, Karnataka, Tamilnadu and Andhra Pradesh. have introduced such a system.	DIF to pursue with the concerned Deptt. of State Govt. for introduction of such a procedure/system to safeguard the interest of the financing institutions and help check the menace of multiple financing through fake title deed of property.	As informed by DIF, a proposal is pending with Tax & Registration Deptt., GoUP for active consideration. Further, a sympathetic decision is requested in view of the fact that Stamp Duty is already payable on creation of Equitable Mortgage hence only a token fee may be charged in order to minimize the risk of frauds and encourage banks for lending more specially under Retail Sector.  (Action: DIF, Govt. of U.P.)
7.	Amendment regarding auction of agriculture land of defaulting borrowers of banks.	3.125 acres of agricultural land essentially to be left with the borrower whose agriculture land is being auctioned for recovery of bank dues.	In SLBC meeting dated 01.07.08, Secretary & Commissioner, Board of Revenue, Govt. of U.P. had agreed for referring the matter for reducing minimum land holding requirement from currently 3.125 acre to 1.125 acre.	DIF to follow up with the State Govt. for an early decision in the matter as the issue is pending since long.	The issue stands referred to Deptt. of Revenue, GoUP by DIF for lowering limit of leaving farm land with the farmer from 3.125 acre to 1.125 acre in the eventuality of auction of his land for realization of bank dues, if banks allow to grant relaxation to farmer for cultivation of one crop after issuance of RC. Issue is pending since long hence DIF is requested to take up the matter with the State Govt. for an early and favourable decision as agreed to earlier by Commissioner & Secretary, Board of Revenue, GoUP in SLBC meeting. (Action: Board of Revenue/DIF, Govt. of U.P.)
8.	CD Ratio	CD Ratio below 40% level in certain districts of the state	At the end of quarter ended March 09, 32 distts. in the state are having CD Ratio below 40%.	DIF, Govt. of U.P. to form a committee to identify the reasons responsible for low CD Ratio, monitor it continuously and prepare an actionable plan through corrective measures.   DIF to advise progress in this regard.	As the purpose of formation of the Sub-Committee of SLBC under the Chairmanship of Union Bank of India has been achieved and its recommendations submitted to GoUP for necessary action, the issue was proposed to be dropped and approved as well by the house.
9.	Debt Swap Scheme & Joint Liability Groups	Every Lead Bank in the State should adopt atleast 5 villages in their respective lead districts to free the indebted villagers from the clutches of private moneylenders.	Some of the banks have achieved satisfactory progress in this direction and others who are yet initiate action, must take an expeditious step.	All Lead Banks to identify 5 villages in each of their lead district(s) for reliving the villagers from the burden of their loans from informal sector by way of extending institutional finance. Progress to be submitted to SLBC.	Banks should reiterate necessary and elaborative instructions to the branches to ensure satisfactory achievement under the scheme. A Sub-Committee of SLBC (UP) has since been constituted under the Convenorship of Allahabad Bank. It is proposed to crystallize issues which are required for achieving progress under both these schemes. (Action : Allahabad Banks/All Banks)
10.	IT enabled services by banks	Bank should implement “Business Correspondent” Model fast in far flung rural areas to provide banking services.	Some of the banks have introduced Business Correspondent Model in certain districts on a pilot basis.	In view of the discussion/deliberation in the meeting, DIF is requested to form a Sub-Committee with members from PNB, SBI, UBI, BOB and RBI.  PNB may make a presentation about their systems and procedures adopted in Punjab & Haryana and findings thereon may be put up in SLBC meeting.	DIF informed that a meeting of the Task Force formed under the Chairmanship of Agriculture Production Commissioner, GoUP to look into the issues could not be convened due to certain exigencies, however, it will soon be organized as State Govt. is very keen about EBT Scheme. (Action : DIF)
11.	Providing Banking Services in villages having population over 2000	To provide banking services in villages having population of 2000 & more latest by march 2011.	All such villages within the state to be spotted by March 2010.	DCCs/DLCCs to identify all villages having a population of 2000 & more in their respective district and sub-committee to be formed to draw a roadmap for providing banking services in all such villages latest by March 2011.	As the Road-map to provide Banking Services upto March 2011 in hitherto unbanked villages having population over 2000 has been prepared and launched, the issue was proposed to be dropped and approved by the house.

Meeting of SLBC (U.P.) held on 23.03.2010 PARTICIPATION SHEET