STATE LEVEL BANKERS' COMMITTEE, TAMILNADUCONVENOR: INDIAN OVERSEAS BANK

MINUTES OF THE 119th S L B C MEETING HELD ON 25.09.2009

119th SLBC Meeting of Tamil Nadu was held at Chennai on 25th 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 31st 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.

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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

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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

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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 BanksUnder-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

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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.

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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

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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.

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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.

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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.

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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.

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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 118th SLBC Meeting held on

26.06.2009.

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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 & Semi-

nomadic Tribes (NCDNSNT) to fix percentage of target within the overall

target for weaker sections.

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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

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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

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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.

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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.

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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

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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

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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.

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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

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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

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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.

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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.

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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.

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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

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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

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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

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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.

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