State Level Bankers Committee, Tamil Nadu s1

State Level Bankers’ Committee, Tamil Nadu Convenor: Indian Overseas Bank Minutes of the 137th Meeting of SLBC Held on 21.03.2014

137th meeting of SLBC, Tamil Nadu was held at Chennai on 21st March, 2014. List of participants is furnished as an annexure:

Welcome Address:

Shri.Atul Agarwal, Executive Director, Indian Overseas Bank, welcomed the participants to the 137th meeting of SLBC, Tamil Nadu. He has highlighted the various special SLBC meetings held after the 136th meeting of SLBC held on 23.12.2013. He has advised the Lead Banks to extend necessary support to SLBC to carry out the proposed study / survey on the functioning of Business Correspondents engaged by various banks in Tamil Nadu.

Inaugural Address:

In his inaugural address, Shri.M.Narendra, Chairman & Managing Director, Indian Overseas Bank and Chairman, SLBC, Tamil Nadu welcomed the participants and informed the forum that the performance upto the third quarter of the year 2013-14 is to be reviewed in the 137th meeting of SLBC.

Highlight of performance of banks in Tamil Nadu during 2013-14:

Chairman, SLBC highlighted the achievements of the banking system in Tamil Nadu. He has expressed his happiness that the State’s CD ratio continues to be above 100%. He has also informed the forum that Deposits have increased by 16.38 percent and Credit increased by 14.93 percent on year on year basis. Further he informed that the priority credit stood at 42.64 percent, Agricultural advances stood at 18.90 percent and Advances to weaker sections stood at 12.09 percent as of December, 2013 which are above the targeted level.

1 He also expressed his happiness on the achievement under various parameters under ACP and congratulated the bankers for such commendable performance. He listed the achievements under ACP upto the quarter ended December,2013. Chairman, SLBC informed the forum that banks have achieved 101 percent of target under ACP. He further informed that achievement under Farm Sector was 102%, 98% under MSE, 105%, 93% and 111% under Education, Housing and others respectively.

Chairman SLBC was very happy to inform the forum that banks in Tamil Nadu have covered under Financial Inclusion, all the allotted 7816 villages with population less than 2000. With this our State has achieved 100% coverage of Financial Inclusion in the State.

He has requested the member banks to widen the domain of inclusion by opening no-frill accounts and also provide affordable credit to holders of these no-frill accounts, so that objective of the financial inclusion is fulfilled.

1. Agriculture:

Chairman, SLBC has informed the forum that the State has achieved Rs.50594.42 crores up to December, 2013 against the credit plan of Rs.65481.25 crores under agriculture for the year 2013-14. He has also informed that during Hon’ble Union Finance Minister’s meeting with Heads of Banks held on 05.03.2014 the following action points emerged: a) Government has earmarked Rs.8.00 lakh crores credit flow to Agriculture in the budget for 2014-15. b) While lending to short term agricultural loans is good, the share of investment credit is comparatively low, which need to be stepped up. c) Capital formation will take place only if term loans are financed. d) Activities like drip irrigation, solar power units are to be given priority. e) Joint Liability Groups are to be promoted for the purpose of investment credit like dairy, poultry, farm machinery, minor irrigation etc.

2 Chairman, SLBC informed the forum that NABARD in their recently released State Focus Paper for Tamil Nadu has projected an outlay of Rs.78789 crores under Agriculture for 2014-15. He has requested the member banks to focus on investment credit.

2. Educational Loans:

Chairman, SLBC informed the forum that the banks in the State have achieved 90% under amount and 85% in no. of accounts till December, 2013.

He further advised that the detailed guidelines are expected on the recently announced Government of India’s moratorium period for educational loans availed up to 31.03.2009 and outstanding as of December, 2013. This will assist the banks to reduce their NPA and also will help the students to repay their dues without much burden.

3. Self Help Groups(SHGs):

Chairman, SLBC informed the forum that as of December, 2013 banks have achieved only 57% of the credit linkage target of Rs.6000 crores for 2013-14. The following are the main reasons for low credit dispensation:

a) Sanctioning amount lower than recommended. b) Additional dosages are not being sanctioned. c) Under reporting the sanctioned / disbursed details whenever officials from Government call on branches. d) Part / stage release in cash credit accounts are not reported. e) Delay in processing / sanctioning.

He requested the member banks to double their efforts and instruct their branches to sanction all the pending applications immediately and achieve 100% before March,2014.

4. Financial Literacy and Credit Counselling Centres(FLCCC):

3 Chairman, SLBC informed the forum that SLBC had printed Financial Literacy posters and circulated to all the banks/ RSETIs/FLCCCs. Now, SLBC estimated a requirement of 6400 Financial Literacy Guides and 6.96 lac Financial Literacy Diaries to be printed and circulated in the State. He also added that NABARD has given the necessary in principle approval for reimbursement of cost of printing and SLBC has already started the process.

Chairman, SLBC appealed to the State Government to address the following issues:

1. Enumeration of SHG in the State and their registration with TNCDW. 2. Extension of Revenue Recovery Act to commercial banks for recovery of chronic NPAs. 3. Village wise enumeration of farmers and providing the list to banks. 4. Digitalistion of land records and registration of online charge and integration of State Registry with Central Registry set up under SARFAESI, Act 2002. Chairman, SLBC acknowledged the support received from RBI, Government of India, Government of Tamil Nadu & NABARD.

Keynote Address:

ShriT.Udhayachandran, I.A.S., Secretary (Expenditure), Government of Tamil Nadu observed the following in his keynote address:

1. The role played by all banks in achieving various targets and the amount of credit flow is commendable. 2. Even though the performance is commendable, there are certain areas which are to be addressed. 3. Though there is an improvement in absolute terms in the performance over December 2012, there is a drop in percentage terms in certain parameters. 4. There is a slight decrease in CD ratio when compared to December, 2012 level.

4 5. There is a decrease in Micro Credit disbursement when compared to last year. However there is a slight increase in weaker section advances. 6. The NPA is comparatively high in education and MSE sectors. While this could be attributed to the general slowdown in the sectors, the reason for higher level of NPA under Micro Credit is a matter of concern. 7. Government of Tamil Nadu has launched new schemes like NEEDS & UYEGP. The data indicates that the performance under these schemes is not satisfactory. 8. It is quite interesting to note that a study is going to be conducted by SLBC to analyse the functioning of banking correspondents. It is a welcome study. Economic & Political weekly recently published a report on a similar study conducted at Andhra Pradesh. 9. During the study factors like a) Qualification of the Business Correspondents b) Commission paid by different banks to BCs c) Ceiling fixed for BCs to operate by different banks d) Radius of operation of each BC e) No. of transactions done by BCs in a month f) Feedback from the customers, are to be included.

Special Address:

Shri.Anandrao Vishnu Patil, Director, Ministry of Finance, Government of India in his special address, appreciated the performance of banks, LDMs, controlling offices for achieving most of the financial targets. He also appreciated that all the identified villages under Financial Inclusion are covered by Banks in Tamil Nadu. Director, DFS was happy to note that SLBC is conducting a study / survey to assess the functioning of Business Correspondents in the State. He has advised SLBC to include the points suggested by Secretary (Expenditure) in the survey format.

Director, DFS observed that though there is an increase in the quantum of loans disbursed under Agriculture and other sectors, there is a slight drop in percentage terms. Government of India has planned a credit flow of Rs.8.00 crores during 2014-15 for agricultural loans. Though there is a significant

5 increase in the short term loans there is a decline under investment credit. This needs to be addressed immediately.

He has advised the banks to guard against double reporting of data. He appreciated that the weaker section advances are above the national norm of 10%. However he has advised the banks to take care to achieve the targets in all the backward / minority concentrated districts to avoid regional imbalances.

Director, DFS expressed his happiness about the establishment of RSETIs and FLCCCs by 4 Lead Banks in all the districts in their lead districts in the State. He advised that RBI- Financial Literacy materials like posters, guides and diaries printed and circulated by SLBC should be used effectively by all rural branches / FLCCCs in conducting Financial Literacy Camps.

He also advised the banks/LDMs to review the performance of Business Correspondents periodically and convene meetings at district level or Zonal level regularly. He appreciated the credit flow to women beneficiaries which is above the national norms. He further advised the Department of Agriculture / AIC to organise awareness camps on crop insurance in the districts.

Director, DFS observed that credit flow to Micro sector is only 47% against the national norm of 60%. Performance under PMEGP is also not up to the mark and it should be addressed immediately by the member banks and all the pending applications are to be processed immediately.

He also advised that NPA figures under MSE, Education and Micro Credit are causing concern. He has requested that, help and co-operation of State Government to be extended to banks in recovering NPAs.

Dr.J.Sadakkadulla, Regional Director, Reserve Bank of India, Chennai mentioned the following in his special address:

1. It is very heartening to note that Government of India and Government of Tamil Nadu are taking special interest in the SLBC matters and rendering all support to banks.

6 2. Micro Insurance schemes should be taken to the people. It is a priority area and the Insurance Companies should take initiative towards this. 3. RBI will be calling shortly the 4 lead Banks along with Department of Rural Development for a meeting on effective utilisation of Business Correspondents. 4. RBI in their circular dated 31.01.2014 emphasised the need for continuous three phased approach regarding Financial Literacy campaigns. 5. The LDOs from RBI will be participating in such meetings. There will be a follow up meeting after a fortnight and the third and final phase will be held after 2 months. 6. RBI issued a circular on 02.12.2013 on the revised General Purpose Credit card. It does not prevent bank from issuing any Credit Card to a person to whom General Purpose Credit Card has been issued already. 7. At present the sub targets under DRI, Women in weaker sections & minorities are all included in the overall target for Weaker Section. Banks should ensure that the above category beneficiaries are adequately supported. 8. Minutes of the previous meeting of SLBC should be a part of the next agenda.

The Regional Director, RBI appreciated the performance by banks in achieving various targets.

After the addresses of the dignitaries, the agenda was taken up for discussion by Shri.S.Balachander, General Manager, IOB and convenor, SLBC, Tamil Nadu.

Convenor, SLBC advised the forum about the action taken on the action points of 136th meeting, held on 23.12.2013.

Action Taken Report for the 136th meeting of SLBC

1. Scheme for Rehabilitation of Manual Scavengers (SRMS):

7 Convenor, SLBC informed the forum that the following banks are yet to submit the joint verification report despite repeated reminders.

1. State Bank of India, 2. State Bank of Mysore, 3. State Bank of Travancore , 4. Bank of India, 5. Canara Bank, 6. Corporation Bank, 7. Central Bank of India, 8. Punjab National Bank, 9. Syndicate Bank, 10. Union Bank of India, 11. Vijaya Bank, 12. Catholic Syrian Bank, 13.ICICI Bank, 14.South Indian Bank, 15. Tamilnad Mercantile Bank, 16.Tamil Nadu State Apex Co-op Bank

He requested the above banks to submit their joint verification report before 15.04.2014 to SLBC for onward submission to Govt. of India.

Action: Banks

2. Performance of Banks under Direct Linkage to SHGs – Inclusion of Cash Credit figures in the achievement data

Convenor, SLBC requested the banks to report the SHGs disbursement data after inclusion of details of disbursements through Cash Credit and send the cumulative disbursement (both term loan and cash credit) data from 01.04.2013 on monthly basis to TNCDW/NABARD.

Action: Banks

3. Coverage of all villages with population below 2000 before 31.01.2014.

Convenor, SLBC informed the forum that all the 7816 villages with population <2000 have been covered by the member banks through Business Correspondents, Branch model, Satellite branches and Mobile van model. He conveyed his appreciation to the member banks for 100% coverage of villages under Financial Inclusion.

He requested the member banks that a minimum of 5% of covered FI villages (each bank) through BCs need to be converted into brick and mortar branches.

Action: Banks

4. Collection of deposits by “Pengal Palnokku Kootamaippu” from Self Help Groups

8 LDM, Salem has submitted a report dated 14.03.2014 wherein it is mentioned that the PPK is registered as a Society under Tamil Nadu Societies Registration Act, 1975. The LDM is of the opinion that the “savings” collected by PPK from the members of SHGs amount to “deposits” only.

SLBC has forwarded a copy of the report to RBI for their necessary action in this matter. Secretary (Expenditure) advised TNCDW to take up with the District Collector.

5. Awareness campaign on crop insurance schemes to be conducted among the farmers in more number of districts in addition to the 6 districts already identified by Dept. of Agriculture, Govt. of Tamil Nadu:

Convenor, SLBC once again requested the Department of Agriculture and AIC to arrange for the awareness campaigns in all the districts and to inform the schedule in advance to SLBC for sending the information to Banks and LDMs for active participation.

Action: Dept. of Agriculture / AIC

AGENDA No: 1

The forum confirmed the minutes of the 136th meeting of the State Level Banker’s Committee held on 23.12.2013.

AGENDA No: 2

New Issues

1. Department of Fisheries, Government of Tamil Nadu’s Scheme for financing Tuna Long Liners

Secretary (Expenditure), Govt. of Tamil Nadu informed that State Government had recently launched a scheme for Tuna liners which is a very important and ambitious scheme to assist the sensitive sector of Fishermen community. Further, he informed that the State Govt. looks at taking the entire fishermen community to the next level. With that particular aim, this scheme has been

9 conceptualized and launched. He requested the banks to support the scheme and actively involve implementing the scheme.

Director, Dept. of Fisheries, Government of Tamil Nadu has informed the forum that Tamil Nadu is having 1776 km coastal line consisting 13 marine districts and 906 villages. Further, he informed that due to the pressure in the inshore sea water for harvesting the fishes, State Govt. decided to diversify the fishing activity to off shore water i.e. deep sea fishing, and launched the scheme. He also explained elaborately about the processing methods of tuna fish and the potential available for tuna fishing, demand, marketing and importance of tuna.

He informed the forum that each Tuna liner costs Rs. 60.00 lacs, of which State Govt. is providing a subsidy of 50 % i.e. Rs. 30 lacs. Further, he informed that the Dept. of Fisheries has received 271 applications and it will be processed and forwarded to the banks shortly. He requested the banks to support the scheme actively.

Chairman of SLBC requested the Dept. of Fisheries to scrutinise the applications with due diligence and fix the target to all banks and send the applications to the banks early.

Director, Ministry of Finance, GOI informed the forum that the scheme is very good for bank finance. He has also advised the banks to implement the scheme actively.

The scheme was approved by the forum.

Action: Banks/Dept. of Fisheries

2. Equity Grant and Credit Guarantee Fund Scheme for Farmer Producer Companies of Government of India

Convenor, SLBC informed the forum that the scheme of Equity Grant and Credit Guarantee Fund Scheme for Farmer Producer Companies is like CGTMSE and it will be very useful for banks to cover the risk. Further, he informed that SLBC has already organized a special meeting wherein the officials from SFAC have made a presentation on the scheme to the member banks. He requested the banks to percolate the scheme to the branches and popularize the scheme at the gross root level.

10 CGM, NABARD, informed the forum that this scheme has been announced in the Union Budget last year and NABARD also associates with SFAC to implement the scheme. Further, she informed that Farmers Clubs are assisted by the banks so long wherein NABARD is also helping to them and many Farmers Clubs are now registered as a federation. She also informed that if these federations are upgraded as farmer producer companies, banks can take an advantage to finance to them as there is 85 % credit coverage is available.

CGM, NABARD informed the forum that they are initiating, identifying and sponsoring the federations, if bank financial assistance given, it will help to boost their investment credit. She also pointed out that SFAC also financing to Farmers Producer Companies for preparation of Equity Grant Application and Detailed Project Reports (DPR). She requested the banks to actively participate to finance in the scheme.

Director, Dept. of Financial Services, GOI informed the forum that Secretary, SFAC already written about the scheme to CMDs of all banks.

Action: Banks

3. Taking possession of securities under SARFAESI ACT 2002 through the District Magistrates (District Collectors)

Convenor, SLBC requested the State Government to advise the District Collectors for speedy disposal of the applications filed by the banks before them under SARFAESI Act 2002 so that the banks can able to recover NPA immediately.

Action: State Government

4. Rajiv Rinn Yojana (RRY)

Convenor, SLBC informed the forum that district-wise target for 2013-14 has already been advised by SLBC to Lead District Managers and instructed the LDMs to sub allot the target to banks in their districts. He requested the member banks to issue necessary guidelines to their branches and achieve the allotted target.

11 Representative from NHB informed that the nodal agency for RRY scheme implementation is Tamil Nadu Slum Clearance Board.

Representative from Municipal Administration Dept. informed the forum that nodal agency for RRY scheme implementation for the year 2013-14 is National Housing Board and Tamil Nadu Slum Clearance Board. Further, he informed that the RRY target achieved by both NHB and Tamil Nadu Slum Clearance Boards for 2013-14, since they have already collected applications and forwarded to the banks.

He also informed that Tamil Nadu Slum Clearance Board in slums in urban areas and Commissionerate, Municipal Administration in urban areas other than slums are nodal agency for 2014-15 onwards.

Action: Banks/ LDMs/ NHB/ Tamil Nadu Slum Clearance Board/ Municipal Administration

5. “Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013” – Scheme for Rehabilitation of Manual Scavengers (SRMS)

General Manager, TAHDCO informed the forum that this scheme is re introduced by the Central Government and the Dept. of Municipal Administration is in the process of survey. Further he informed the forum that the rehabilitation activity will be undertaken by TAHDCO once the survey completed.

Representative from Municipal Administration informed the forum that format for survey is already finalized and survey will be completed soon after completion of Lok Sabha election.

Action: TAHDCO/Municipal Administration

6. Standardised Financial Literacy Material Provided by Reserve Bank of India

Convenor, SLBC informed the forum that Financial Literacy posters were already printed by SLBC and circulated to the controlling office of the banks for onward distribution to their rural branches. Further, he informed that SLBC is in the process of printing of 6400 copies of Financial literacy Guide and 6.96 lacs Financial Literacy Diary and they will be circulated to the banks shortly. He

12 requested the member banks to instruct their branches to conduct outdoor financial literacy camps using the financial literacy materials.

He thanked NABARD for funding the whole process of printing of financial literacy material.

Action: Banks/ SLBC

7. VIP references regarding opening of bank branches in the state of Tamil Nadu

Convenor, SLBC informed that VIP reference is the matter of concern for SLBC when there is no response from the member banks and Lead District Managers. He requested the Banks and Lead District Managers to submit the updated position on the branch opening to SLBC immediately.

Action: Banks/LDMs

8. Centrally Sponsored Schemes of Integrated Development of Small Ruminants and Rabbits (IDSRR) – Delay in submission of claims to NABARD.

Convenor, SLBC requested the member banks to instruct their branches to ensure timely submission of claims to NABARD.

Action: Banks

9. Pending applications of Scheduled Caste beneficiaries under various Government sponsored schemes- Meeting with National Commission for Scheduled Castes

Convenor, SLBC informed the forum that National Commission for SC has conducted a series of meetings at the district level in which bank branches and LDMs have participated in the meeting and National Commission for SC was satisfied with the response given by the banks.

He requested the member banks to avoid any complaints from National Commission for SC and also requested the banks to respond the letters of National Commission for SC immediately. He also requested the member banks to issue suitable instruction to their branches.

Action: Banks

13 10. Study on the functioning of Business Correspondents engaged by banks in Tamil Nadu by SLBC

Convenor, SLBC informed the forum that study of functioning of Business Correspondents is an idea mooted by RBI. Further, he informed that General Manager, RBI has taken very active role in the special meeting conducted by SLBC with major four banks and analyzed the functioning of business correspondents.

He requested the member banks, Lead District Managers to extend the cooperation to SLBC for conducting a meaningful survey and makes the Tamil Nadu project as a model project for the country.

General Manager, RBI requested the forum to fix the time frame for survey. The forum decided that due to the yearend work for the banks, the survey may be undertaken from 3rd week of April 2014 to June 2014.

Action: Banks/ LDMs

AGENDA No: 3 Review on Banking Developments in Tamil Nadu in Key Parameters as of December 2013

The forum noted that year on year incremental deposits & credit growth was 16.38% and 14.93 % respectively over December 2012. The CD ratio has slightly decreased from 121.79% as of December 2012 to 120.28 % as of December 2013. The share of agricultural advances was 18.90 % against the national norms of 18%.

Chairman, SLBC advised the forum that percentage of CD ratio, priority sector advances, Agricultural advances; Micro credit and DRI loans are low compare to the previous year. He requested the member banks to improve their portfolio in these sectors.

Lead District Officer, RBI requested the forum to discuss as to why DRI advances are not picking up. He also pointed out that district co-ordinators of some Banks are not participating in the DCC/DLRC meeting regularly and their co-operation with lead bank of the district is very poor.

14 Secretary (Expenditure) Govt. of Tamil Nadu informed that the central Govt. have linked the DRI scheme for housing loan purpose under Indira Awas Yojana (IAY) , and State Govt. has also came up with idea to link the DRI scheme for construction of Chief Minister’s Solar powered Green house. He requested the member banks to lend in this segment.

General Manager, RBI suggested that awareness campaign may be conducted by line departments, District authorities and banks among the targeted group, so that banks will lend more under DRI.

Forum noted that percentage of agricultural advances is very low in Coimbatore i.e less than 18%. Secretary (Expenditure) Govt. of Tamil Nadu that this may be due to the high industrial exposure when compared to agricultural advances out of the total advances. CGM, NABARD pointed out that CD ratio in Theni, Ariyalur and Dharamapuri Districts are high compared to Kancheepuram district.

GM RBI informed the forum that this is mainly because of the fact that units located in Kancheepuram District are financed by banks located in Chennai District which is reported in Chennai District’s achievement.

Chairman, SLBC requested banks to report the disbursement details in respect of Kancheepuram district correctly. Secretary (Expenditure) Govt. of Tamil Nadu explained that CD ratio is less in Kancheepuram district as deposits are more than credit.

Action: Banks

AGENDA No: 4

REVIEW OF PERFORMANCE UNDER ANNUAL CREDIT PLAN

2013 – 2014: (APRIL 2013 TO SEPTMBER 2013)

15 The forum took on record the final achievements under ACP 2013-14 up to September 2013. The banks in Tamil Nadu have achieved 99% under Farm Sector, 87 % under Non farm sector and 95 % under other priority sector.

AGENDA No: 5

REVIEW OF PERFORMANCE UNDER ANNUAL CREDIT PLAN 2013-14 APRIL 2013 TO DECEMBER 2013

The forum took on record the achievements for the half year ended April 2013 to December 2013 under ACP 2013-14. The banks in Tamil Nadu have achieved 102 % under agriculture, 98 % under MSE sector, 105 % under education, 93 % under housing, 111 % under other priority sector and 98 % under non priority sector.

Director, Dept. of Financial Services, GOI advised the SLBC to discuss in the next meeting about the banks, who have not achieved their ACP target, so that such banks can be accelerated to achieve their allotted target.

Action: Banks/SLBC

AGENDA No: 6

Micro & Small Enterprises (MSE) sector

The Convenor, SLBC informed the forum that a sum of Rs. 14115.94 Crores & Rs. 15428.03 Crores was disbursed from April 2013 to December 2013 to Micro & Small Enterprises respectively. Convenor, SLBC advised the member banks to speed up credit flow achieve 60% norms.

Convenor, SLBC informed the forum that RBI has taken lot of initiatives for the development of MSE sector in the State and has conducted several Town Hall meetings in Ambur, Madurai etc. wherein an interface was arranged with bankers, State Government, Industrialists and RBI.

Action: Banks

AGENDA No: 7

Prime Minister’s Employment Generation Programme (PMEGP)

16 Representative from KVIC informed the forum that as on date 31.69 crores of margin money have achieved against the target of 58.40 crores, of which 132 and 6 projects were financed in this scheme to SC and ST respectively. He also informed that the performance in Ariyalur, Thiruvarur and Nagapattinam districts is very low.

Lead District Officer, RBI informed that representatives of KVIC and KVIB are not participating in the district level meeting regularly so that the performance of the scheme could not be reviewed at the district level meetings.

Secretary (Expenditure), Govt. of Tamil Nadu advised KVIC and KVIB to ensure that the representatives of KVIC and KVIB regularly participate in all the district level meetings with necessary particulars.

Secretary(Expenditure) requested the bankers to take care of the districts like Perambalur, Ariyalur, Nagapattinam, Thiruvarur and ensure proper credit flow in all sectors to ward of the regional imbalances if any.

Representative from DIC informed the forum that performance of DIC under PMEGP is very good and they have got sanctioned 1243 projects with tune of 29.52 crores which is ahead of the target of 23.35 crores. He also informed that loan has disbursed for 871 projects, 20.50 crores.

Chairman, SLBC advised the banks to actively involve in this scheme and dispose all the pending applications immediately.

Action: Banks/ KVIC/ KVIB

AGENDA No: 8

Performance under New entrepreneur-cum-Enterprise Development Scheme (NEEDS) Representative from DIC informed the forum that against the target of 1000 beneficiaries and subsidy component of 100 crores, DIC has recommended 1219 applications with subsidy of 125 crores. DIC has received the provisional sanction for 728 cases with subsidy component 76.87 crores. He requested the member banks to give provisional sanction immediately to enable them to send the beneficiaries for the compulsory EDP training for one month.

17 Secretary (Expenditure), Govt. of Tamil Nadu pointed out that the pending applications in the scheme are more in Cuddalore, Kancheepuram Pudukottai, Thanjavur, Vellore and Villupuram.

Secretary (Expenditure), Govt. of Tamil Nadu and Chairman, SLBC advised the banks to concentrate in these districts and instruct their branches to dispose all the pending applications immediately.

Action: Banks

AGENDA No.9

Rural Self-Employment Training Institutes (RSETIs)

Chairman, SLBC advised the banks to endeavour to obtain A /AA grade in all their RSETIs. He also advised the banks to inform SLBC the grades obtained by their RSETIs for placing the matter in the upcoming SLBC meeting. He advised the banks to maintain 70% of the settlement rate i.e trained candidates and self employment as per national norms.

Representative from TNCDW informed the forum that as per the guidelines of Monitoring Cell of RSETIs, TNCDW has engaged a retired State Government official as State Project Co-ordinator to monitor and mentoring the RSETIs in the state. He has also advised that under NRLM Rs.2.13 crores allotted for RSETIs for providing training to BPL candidates. Further, he informed that SBI RSETIs have only submitted the claim proposal and remaining banks RSETIs are yet to submit the claims. Chairman, SLBC advised the banks to submit the claims to TNCDW immediately.

Chief Manager, SBI informed the forum that land allotment is yet to be made in Thoothukudi District. He also informed that initially a land was offered in the Collectorate, Thoothukudi but however now there is a hesitation issue to offer the land. He requested the State Govt. to look in the matter.

Secretary (Expenditure) Govt. of Tamil Nadu informed the forum that they will impress upon the District collectors to offer suitable land to RSETIs.

18 Director, Ministry of Finance, Govt. of India advised SLBC to submit the status report of land allotment to State Govt., so that the allotment of land can be done immediately.

Action: RSETIs/ Lead Banks/ State Govt./ SLBC

AGENDA No.10

Financial Literacy & Credit Counseling Centers (FLCCC)

Convenor, SLBC advised the member banks to instruct their rural branches to conduct Financial Literacy Campaigns every month using the financial literacy materials and a consolidated report should be submitted to RBI / SLBC.

GM, RBI advised the FLCCCs and banks to conduct the Financial Literacy in line with the DCC/ DLRC meeting dates, so that the Lead District Officer, RBI also participates in the camps.

Chairman, SLBC advised the banks to submit the outcome of the camps like account opened, credit disbursed, deposits mobilized etc., to SLBC.

Action: Banks

AGENDA No.11

Progress under Financial Inclusion in the state:-

Chairman, SLBC appreciated the banks for coverage of all the 7816 villages in the state. Chairman advised the banks to take it forward in very successful manner.

GM, Reserve Bank of India advised the member banks to submit the revised plan duly incorporating the 5% of brick and mortar branches in their allotted villages.

Action: Banks

AGENDA No: 12

Ultra Small Branches:-

19 The Convenor, SLBC informed the forum that banks have opened 3915 Ultra Small Branches in the State of Tamil Nadu as on 28.02.2014. He advised the member banks to complete establishment of USBs in the remaining villages, wherever BCs are engaged as per the guidelines of Ministry of Finance.

Action: Banks

AGENDA No:13

Financial Inclusion and Green Initiatives – Electronic transfer of Benefit Payments:-

Convenor, SLBC advised member banks to submit data on ICT based financial inclusion before 5th of every succeeding month to SLBC without fail for consolidation and outward submission to RBI.

Action: Banks

AGENDA No: 14

Allocation of targets for Education Loans by Government of India:-

The Convenor, SLBC informed the forum that banks have reached the educational loan outstanding of Rs.15250.15 Crores as on 31.12.2013 against the target of Rs.16851.08 Crores (90.49%). The number of accounts remained at 928356 against the target of 1085560 accounts (85.52%).

Convenor, SLBC advised the member banks to achieve educational loan targets assigned by Government of India before 31.03.2014.

Director, DFS, advised Co-operative banks to submit the correct figure of Educational Loan outstanding and NPA, since the report shows 975 NPA under educational loan.

Action: Banks/Apex Co-operative Bank

AGENDA No: 15

Review of performance of Educational Loans for the quarter ended December, 2013:-

20 The forum took note that banks in Tamil Nadu have disbursed 91613 educational loans to the tune of Rs.1438.81 Crores during April 2013 to December 2013, of which Engineering/Medical courses account for 66637 amounting to Rs.850.99 Crore, 2474 loans for study abroad amounting to Rs.334.60 crores and 22502 loans to others to the tune of Rs.253.21 Crores.

Out of the 91613 educational loans granted to the tune of Rs.1438.81 Crores, SC/ST, Minority Communities & Women account for 14796 loans amounting to Rs.212.28 Crores, 10304 loans amounting to Rs.138.07 Crores and 25594 loans to the tune of Rs.367.73 Crores respectively.

Action: Banks

AGENDA No: 16

Swarna Jayanti Shahari Rozgar Yojana (SJSRY):-

The representative from Municipal Administration informed the forum that subsidy utilisation for the programme for the year 2012-13 have achieved 100% under USEP and 95% under USWP programmes. Further, he informed that the year 2013-14 the allotment of subsidy of 50% received and remaining amounts are yet to be received from them. He also informed that achievement under USEP is 30% and UWSP is 25% as of now, and applications have already been forwarded to the banks.

Convenor, SLBC advised the member banks to dispose all pending applications.

Action: Banks

AGENDA No: 17

Bank finance under Housing Scheme:-

21 The forum noted that banks in Tamil Nadu have disbursed Rs.4560.42 Crores to the housing sector (upto Rs.25.00 lakhs) from April 2013 to December 2013.

Convenor SLBC advised member banks to submit data to SLBC in time without fail.

Action: Banks AGENDA No 18

Golden Jubliee Rural Housing Finance Scheme (GJRHFS)

The forum noted that banks in Tamil Nadu have disbursed 1402 loans amounting to Rs.5036.13 lacs from April 2013 to December 2013.

AGENDA No: 19 Credit Flow to Women

The forum noted that the share of credit flow to women in the State constitute 7.24 % of total Bank Credit as against the national norm of 5 % as on 31.12.2013.

AGENDA No:20

Credit Flow to Minority Communities

The forum noted that the achievement under credit flow to Minority Communities as on 31.12.2013 is 11.62 % against the targeted level of 15 % as per the guidelines of Ministry of Finance. Convenor, SLBC requested the member banks to increase the share of credit flow to Minority Communities to reach the desired target level of 15%.

Action: Banks

AGENDA No:21

Kisan Credit Card Scheme (KCC)

22 The Convenor, SLBC informed the forum that banks in Tamil Nadu have issued 22.96 lakh Kisan Credit Cards to the tune of Rs. 15550.81 Crores from April 2013 to December 2013.

Director, DFS, MOF advised the member banks to issue ATM enabled Kisan Credit Card to all the eligible borrowers and report to SLBC.

Chairman, SLBC advised Indian Bank to verify and confirm the correctness of data in respect of No. of KCC issued to SLBC. Convenor, SLBC advised all the member banks to ensure 100 % coverage of eligible loans under crop insurance scheme.

Action: Banks/ Indian Bank

AGENDA No: 22

Self Help Groups (SHGs)

Representative from TNCDW informed the forum that the banks have achieved 87% amounting Rs.5196 crores as on 15.03.2014 under direct linkage to SHGs against the 2013-14 target of Rs. 6000 crores. He informed the forum that the banks are reporting the SHG disbursement details without including the cash credit figures. He requested the member banks to verify their data and submit afresh duly incorporating the cash credit figures.

Secretary (Expenditure) Govt. of Tamil Nadu informed the forum that poor performance is observed in Theni, Dharmapuri, Cuddalore, Thiruvarur, Tiruppur, Erode, Nagapattinam and Ariyalur districts. He advised TNCDW to clarify that why performance in Dharmapuri is very low when compared to Krishagiri District, since profile of Dharmapuri district is similar to that of Krishanagiri district like, SHG Population, good bank network , similar non mahalir thittam SHGs and high rate of recovery.

Representative of TNCDW replied that repeat loans are not given to SHGs in Dharmapuri district, this is the reasons for poor performance in the district.

Secretary (Expenditure) Govt. of Tamil Nadu advised the team of banks and TNCDW officials to look in the matter and sort out this issue immediately. He also requested the banks to verify their software and ensure to report the figures duly incorporating Cash Credit figures to TNCDW.

23 DGM, IOB informed the forum that executives from Central Office has visited in Thanjavur, Tiruchirapalli and Nagapattinam districts and impressed upon the branch mangers of IOB to lend more loans to SHGs.

Representative from TNCDW informed the forum that due to visit under taken by IOB, there is an increase in SHG disbursement in these districts. He acknowledged the support given by IOB in this regard.

Action: Banks/ LDMs /TNCDW

Agenda No: 23

Progress Report on Economic Development Schemes implemented by TAHDCO

General Manager, TAHDCO informed the forum that the banks are keeping pending 13773 applications for a long time. He informed the forum that out of 13773 pending applications, 5527 applications relating to 2012-13 and 8246 applications relating to 2013-14. He requested the member banks to dispose all pending applications where subsidy has been received by the banks immediately.

Secretary (Expenditure) Govt. of Tamil Nadu pointed out in the forum that the performance under land purchase scheme is very poor. He advised TAHDCO to look in the matter and concentrate to provide assistance in the delta districts, since the scope for land purchase scheme there is high.

Convenor, SLBC requested the member banks to actively involve themselves in the implementation of the schemes of TAHDCO and dispose all the pending applications on priority basis immediately.

Action: Banks / TAHDCO

AGENDA No: 24

Review of NPA Accounts in Priority Sector Lending – December 2013

24 Secretary (Expenditure) Govt. of Tamil Nadu pointed out that percentage of NPA in micro credit is high with State Bank of India. He advised the State Bank of India to take up with TNCDW and recover the micro credit NPA.

DGM, SBI replied that they have already informed the details of defaulted Self Help Groups and sponsored NGOs to TNCDW and district authorities. Further, he informed that they have also requested assistance from State Government to recover the NPA.

DGM, IOB informed the forum that NPA under micro credit increased due to breaking the group by the members and forming another groups. These groups avail fresh loans from some other banks and leave the earlier loan unpaid.

CGM, SBI informed the forum that the splitting of the SHGs and formation of new groups are the main concerns for NPA. She requested the State Govt. to enumerate and compulsorily register the SHGs members and NGOs and make available the details of SHGs to the banks. She also informed the forum that SBI has with come out the OTS scheme for SHGs with the discount of 30 to 40% of the outstanding loan up to 31.03.2014.

Representative from TNCDW informed that under NRLM, the registration of the member profile in online is compulsory. Further, he informed that the registration of the SHGs members in online portal in all the districts are being done, at present 70 to 80% registration is over. He informed that this will help in avoiding duplication.

He informed the forum that National level, Tamil Nadu is in 2 nd position in respect of SHGs disbursement and also NPA. He also informed that they have conducted study and found that NPA under SHGs is higher in non mathi SHGs. He informed the forum that TNCDW already requested the banks to share their SHGs NPA details for mathi and also Non mathi SHGs, so far SBI only submitted, he requested the banks to submit their NPA details to TNCDW immediately.

Regional Director, RBI requested TNCDW to complete the registration 100% and banks should maintain the NPA level at less than 2 % in NPA under micro credit.

25 Secretary (Expenditure), Govt. of Tamil Nadu advised TNCDW/ Banks/ LDMs to bring the details of SHGs quality of lending , target , achievement along with NPA level and discussed in the meeting and keep informed to the district collector, so that the remedial measures can be taken immediately.

Director, DFS, MOF advised that Lead District Manager and banks to represent with details of NPAs in the DCC meeting to District Collector and Tahsildar to invoke recovery action.

General Manager, Pandyan Grama Bank informed that under NRLM scheme interest subvention is not available to SHGs financed through PLF. He requested the Government to consider interest subvention to PLF also. DGM, IOB informed the forum that as PLF loans are mainly lending for SHGs only, the interpretation can be that interest subvention is available for such loans also. He suggested that there is no need of representation to Ministry of Rural Development, Govt. of India, and decision can be taken by State Govt. itself.

Secretary (Expenditure), Govt. of Tamil Nadu advised TNCDW to refer the matter with Finance Dept. Govt. of Tamil Nadu to sort out this issue at the State level.

Action: Banks/TNCDW/ State Government

Agenda No. 25

Success Story

The Convenor, SLBC appreciated Indian Bank and Indian Overseas Banks for sharing the success stories with SLBC. He requested the banks and State Govt. to share their success stories with SLBC like the ones shared by Indian Bank, and IOB.

Action: Banks/ State Govt.

Table Agenda

26 1. Bank-wise, District-wise Performance under New entrepreneur-cum- Enterprise Development Scheme (NEEDS) and Unemployed Youth Employment Generation Programme (UYEGP)

The Convenor, SLBC requested the member banks to dispose all pending applications immediately.

Action: Banks

2. National Horticulture Board – Revised procedure for Letter of Intent (LOI).

Deputy Director, NHB informed the forum that first time NHB is providing 100 % advance subsidy from 09.12.2013 onwards to all crops, floriculture, honey bee, cold storage, ripening chamber but this subsidy should be kept 3 years under frozen account. He also informed that 100% advance subsidy is given by NHB based on the bank’s loan sanction copy, appraisal note, term loan account statement and affidavit from the beneficiary.

He informed the forum that from 01.04.2014 onwards the subsidy percentage for floriculture is increased from 25% to 50% and for cold storage it remains at 40 % i.e 1.80 crores subsidy.

He also explained the forum that the revised procedure for issuance of Letter of Intent (LOI).

He requested the member banks to make use of NHB subsidy scheme to lend more under horticulture sector.

Other issues:

1. Representative from Dept. of Animal Husbandry informed the forum that the current year achievement under poultry development scheme is only 25%. She requested the member banks to dispose all the pending applications immediately. She also informed the banks that SLBC already circulated the bankwise details of pending applications to the concerned bank. She has also informed the forum that 60% of loans under this scheme have been given by IOB and thanked IOB for the same.

27 Representative from Karur Vysya Bank informed the forum that the beneficiary is insisting the bank to credit the subsidy amount to their SB account. He requested Dept. of Animal Husbandry issue cheque with loan account number.

Action: Banks/Dept. of Animal Husbandry

2.Representative of TABCEDCO informed the forum that the proposal of banks signing an MOU with them as their sub-channelising agents for implementation of the educational loan scheme of NBCFDC.

Convenor SLBC advised that this matter was taken up in several meetings and even a special SLBC meeting was organised to discuss this issue. He also advised that the onerous clause in the agreement that “even if the party does not repay banks have to repay the loan to TABCEDCO” is not acceptable to the bankers. This fact was already advised to TABCEDCO.

The meeting ended with a vote of thanks proposed by Shri. M. Elangovan, General Manager, Central Bank of India, Chennai.