PROCEEDING OF 120TH SLBC MEETING HELD ON 26.05.2010 AT BHUBANESWAR

The 120th SLBC meeting of Orissa was held on 26.05.2010 at Bhubaneswar under the Chairmanship of Shri S.K Goel, CMD, UCO Bank and Chairman, SLBC, Orissa. Among others it was attended by Hon’ble, Finance Minister, Orissa, Shri P.C Ghadai, Shri R N Senapati, Agriculture Production Commissioner, Govt. of Orissa, Shri B.K Bhoi, Regional Director, Reserve Bank of India, Bhubaneswar; Shri P.C Sahu, Chief General Manager, NABARD, Regional Office Bhubaneswar; Ms. Jostna Jamkhandi, General Manager, SBI, Bhubaneswar and Shri S. M . Sinha, General Manager, UCO Bank- cum –Convenor, SLBC, Orissa. The list of Participants is annexed.

Shri S. M. Sinha, General Manager, UCO Bank, and Convenor, SLBC Welcomed Shri S.K Goel, CMD, UCO Bank and Chairman, SLBC,Orissa; Shri R. N. Senapati, Agriculture Development Commissioner, Govt. of Orissa, Shri B.K Bhoi, Regional Director, Reserve Bank of India, Shri P.C Sahu, Chief General Manager, NABARD, Regional Office, Bhubaneswar and other dignitaries off and on the dais to the 120th SLBC meeting.

In his welcome address, he observed as follows:-

SLBC, Orissa is the only forum for development of the State. We are

also the Convenor of SLBC in Himachal Pradesh. We are glad that only

State Himachal Pradesh has achieved 100% Financial Inclusion in the

Country as Convenor of SLBC. Kindly support us and cooperate. We

want that goal should be achieved. Stimulus package of Govt. should

be properly worked out. Economic down turn of 2008-09 is likely to be

rolled back is now regaining.

RBI in its Plan 2010 raised th3e Key of Inter Bank lending at following

rules raise the reserve ratio by 5 basic points. Ratio rate and Reverse

Repo and Reservations – 5.75, 3.75 and 6%. During March Inflation

Rate remain at double digit figure in 13.5%. Inspite of Global economic

crisis, Banks have done well and increased their profitability in 2010-

11. SME in the fastest growing segment and generating 30% job and

adds 18% to GDP.

Mission Shakti Programme in Orissa is a holistic programme. More

than 5 Lakh women SHG and 17000 Crores of Rupees. Micro Finance is

doing well and rapidly. Rapid growth is also a cause of concern for

many as unbundled loan will lead to degradation of assets quality.

Branch network has significantly shown a growth of 160 branches in

the State.

Aggregate deposit has increased by 10899 Crores with a increase of

growth rate of 23.93%. The trade deposit increased 64.42% to 65.21%

as on 31st March as against rational norm of 60%,

Share of Agriculture is 31.59% as against 18%. MSME has shown a

sharp increase of 56.77% as on March, 2010. It is one of the best in

the country and ACP against annual target Rs.11500 Cores,

achievement is Rs. 11142 Crores, achieving 97% of the target, which is

one of the best of the country.

Establishment of Rudsetti, every Bank should look and every district is

established a Rudsetti. RBI has taken all possible steps for financial

literacy in the country. Financial literacy empowers the poor, those

who are at the bottom. It also increase the economic space of down

trodden, at the bottom of Pyramid.

“ A dream of equality of opportunity of privileged and

prosperity” - Martin Luther King.

HIGHLIGHTS OF THE SPEECH OF HON’BLE FINANCE MINISTER, GOVT. OF

ORISSA SHRI P.C GHADAI

It is pleasure for me to be associated with you all present here and

with the review of various schemes implemented by Banks and poverty

alleviation programme implemented in the State. I must reiterate the

credit is an important input that helps the farmers, the small

entrepreneurs, need support from farmers. Investors also need

support from farmers. Efforts should be made for recognition to the

credit support to the farmers. Investment by farmers is a planned

intervention by the Govt. Our effort should be for expanding the reach

of formal credit to farmers of Rural poor. But in the context of CD

Ratio. I would point out that although CD Ratio of all Banks in the

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State is 65.21% increase is not upto satisfaction. In some Banks it is

below 50%. Banks like Canara Bank, Corporation Bank, IDBI Bank,

Punjab National Bank, Punjab and Sind Bank, Syndicate Bank, Union

Bank, Vijaya Bank, ICICI Bank, Indusind Bank, Baitarani Gramya Bank,

and Rushikulya Gramya Bank have CD Ratio of below 50% as on

31.3.2010. Leading Banks like BOI, IOB, OBC have below national

parameters of 60% (CD Ratio).

I request all present here to surpass the national parameters of CD Ratio. As

regards MSME development strategies, the Industrial Policy Resolution –IPR-

2001- the robust Policy frame work. IPR-2007 aims at further forcing up the

process. Requirement and development of MSME is focused on MSME

development Policy – 2008. % of SME advance to total Advance is only

15.04% as on 31.3.2010. Credit is to the tune of 8490.89 Crores indented in

this section. Similarly percentage of MSME advance to total advance is

12.80%. Total MSME advance is to the tune of 7228.33 Crores as on 31.3.10.

Agril. And Allied though there have been progress, % of Agril. Advance to

total advance is 31.59% as on 31.3.10 as against national parameter of 18%.

Those who are legging behind are requested to achieve and improve. Banks

like BOI, Bank of Baroda, Canara Bank, Syndicate Bank, Dena Bank,

Corporation Bank, IDBI Bank, PNB, SBI, Indian Bank are below the national

parameters. Pvt. Banks like ICICI Bank, Axis Bank are always far behind and

at low level. 0% Banks are there. You try to correct yourselves and come to

main stream.

Handloom and Handicraft - This sector provides a very key progress to

economy. This sectors provides and generates e4mployment. Chief Minister

of Orissa announces a special package for Handloom weavers. Banks are

requested to enhance flow of credit to this section.

Micro Finance - Banks have a major role to play. Act as a credit provider

and then as a chase Agent. Money lenders are charging a very high rate of

interest from poor farmers. SHG groups, training should comprise of their

business, their product. They should acquire knowledge. I request all of you

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to redesign your business strategies to promote specific financial inclusion as

corporate social responsibility. Financial Inclusion will lift the financial

condition of the poor of my State.

As regards SHG, Bank linkage scheme can be regarded as most potent

incentive, since independence. There are large numbers of SHGs in the

country. Savings from members of SHG teaches financial management. I

say to Pvt. Sector Banks though their CD ratio is above 60%, finance to Agril.,

finance to weaker section, finance to DRI is far below the stipulations of RBI.

In case of some Pvt. Sector Banks it is seen that to be nil.

In last SLBC meeting it was discussed at length. Pvt. Sector Banks are

requested to improve their finance in these sectors. Otherwise I have to

rethink and l shall be forced to issue directions to Govt. Agencies of Public

Sector Undertakings, Semi Govt. Agencies not to park their surplus fund with

these banks. Again I remind all of you to cooperate and be liberal to extend

credit to various sectors.

Another point, NREGA Programme has been adopted in whole country. Govt.

wants to stop corruption and we want to make NREGA payment through

banks. So BC Model to be adopted every where. Only SBI has adopted.

They are helping the Govt. to facilitate payment through their agencies. Still

other Banks are hesitating. All Regional Heads are there. I request to adopt

this BC Model. Thank to SBI and other Banks should adopt. I request to all

those who are legging behind please correct yourselves. Let us all join our

hands for progress of the State. So far fiscal development is concerned; we

are much ahead of other State. Right from CM to Official of the State, we all

work for development of economic condition of the State. The spheres where we are legging

behind few years back, now we are developing. Now we want to be No.1 State of the country.

Banks are required to play a very key role, a dedicated role, a committed role to be rich. State is

very rich. But people are very poor. People of a rich State should be rich.

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HIGHLIGHTS OF THE SPEECH OF SHRI R. N. SENAPATI. IAS AGRICULTURE

PRODUCTION COMMISSIONER, GOVT. OF ORISSA.

State Level Bankers Committee is a forum where we discuss various issues connected with the

socio economic development of the State. I find that we should concentrate broad policy issues

rather than Micro Finance issues in the Agenda. One thing, I would like to high light that CD

Ratio has been declining might be due to Global recession. There has been recovery. Our CD

Ratio is improving. But if we compare the CD Ratio of Dec, 2009 and March, 2010, the CD

Ratio is decline. CD Ratio is still a matter of concern. As Finance Minister told some Pvt.

Sector Banks and Commercial Banks are legging behind and discouraging. So we have to

increase CD Ratio, otherwise investment will not be there in the country. This is No.1. Second

thing is Priority Sector advance of quarter ending December, 2009 and March, 2010. It is also

declining from 65% to 60%.

Besides, issues which Chairman, UCO Bank and Finance Minister has raised that is Financial

Inclusion. RBI is also very keen on this issue. So we should assure 100% Finance Inclusion.

District has been divided among different Banks. So they must ensure that all the villages are

covered. Hon’ble Finance Minister also points out regarding NREGA payment through Banks.

Not only NREGA payment but also various payments of Govt. Department is also made through

Banks. SBI has come forward to take some Panchayat. All Banks should come forward to take

all the Panchayats, where there is a will there is a way. We should achieve 100% Financial

Inclusion. We can short out various issues.

HIGHLIGHTS OF THE SPEECH OF SHRI B.K BHOI, REGIONAL DIRECTOR, RBI,

BHUBANESWAR

I have joined as R.D, RBI. I took charge on 26th April. Earlier I was RD, RBI for UP and

Uttarakhand. I look forward to work with you in a fruitful manner. SLBC is a unique forum

where regular that is RBI, Top Govt. Officials and Banks meet. Our State is going down and

down, what I read from News Papers. This gives me great sense of anguish. Our State is rich.

People are very laborious. Despite such richness why our State will go down and down. I assure

you all cooperation from RBI.

Agenda-wise discussion

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LDM Nabarangpur and Malkangir raised the issue of facing problem in achieving 100%

Financial Inclusion. Shri R.N Senapati told we will talk to the Collector. LDM asked to enhance

the cash holding of Banks. They face many problems due to low cash holding. Shri R.N

Senapati told Finance Department will also pursue. Let us achieve 100% Financial Inclusion by

31.3.2011. You (LDM, Malkangiri) have done excellent job in Nabarangpur. Some more effort

requires for Malkangiri. We should be No. 2 State in the country. DIF will dispatch a letter

under my signature on Secretary, Finance. I will follow Malkangiri specially.

Roadmap was finanalised on the spot.

Action taken report discussed Point-wise.

No. 12 - K.C Chakraborty Committee on.

LDM Mayurbhanj - At what time Margin Money to be released? Nearly Rs.1 Crore amount is

pending in PMEGP.

Nearly 150000 – Handicraft artisans are there. Only 7500 – ACC has been issued. So I request

the bankers to issue more and more ACC Cards.

ISHUP – Issue raised by LDM, Nabarangpur

Shri R.N Senapati told that let us unanimously try for development allied activities. Poverty can

not be elevated through wage employment. Wage employment is only for sustenance. We have

to give tremendous emphasis on allied sector.

Agenda No. 7

Shri R.N Senapati told that for reconciliation the deadline is 30.6.10. Interest rate charged by

MFI. No regular. RBI should pay interest for regulation of interest.

Agenda No. 8

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No. 14 - Shri R.N Senapati told that Banks please try to sanction and disburse the sponsored

applications. If there is dearth of application please mobilize applications on this sector.

No. 16 - The Director, NHB told that we have sponsored 1960 applications. Only 350 loan

sanctioned. So pendency is very high. Cashew Processing Units need long Term loan to be

sanctioned.

Shri R.N Senapati told that There is a tremendous potential in this sector. There is vast scope in

Horticulture. So, I think we should concentrate more and more in this sector. We have to focus

right from Horticulture where there are vast scopes. Sub-Committee of Agriculture to review the

credit flow to Horticulture regularly. Lot of insensitive are there. Tie up is missing. Sufficient

number of applications can be sponsored. We are discussing sufficient credit flow to this sector.

Agenda No. 18 – Reverse Mortgage Scheme - This scheme is not picking up to the mark.

Shri R.N Senapati told that sufficient publicity should be there.

At the end Mr. C.P. Das, Chief Officer, SLBC, UCO Bank proposed vote of thanks to the Chair as well as participants.

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