STATE LEVEL BANKERS’ COMMITTEE - KARNATAKAConvenor – SYNDICATE BANK, REGIONAL OFFICE, BANGALORE.

MINUTES OF THE 116th SLBC MEETING HELD ON 28.03.2011

The 116th SLBC Meeting was held on 28.03.2011 at the Conference Hall, III Floor, Vidhana

Soudha, Bangalore. Sri. Basant Seth, Chairman-SLBC and CMD, Syndicate Bank presided

over the Meeting. He warmly welcomed Sri. S.V. Ranganath, Chief Secretary, Smt. Meera

Saksena, Addl. Chief Secretary and Development Commissioner, GOK, Sri.Vijaya Bhaskar,

Regional Director, RBI and Dr.Venkatesh Tagat, Chief General Manager, NABARD for the

meeting.

The Chairman SLBC also welcomed Principal Secretaries, Secretaries, Senior Officials from

Govt. of Karnataka representing different Line Departments and Managing Directors/Heads of

State Level Corporations/Boards, Chairmen of RRBs, Executives from RBI, NABARD,

Commercial Banks, Co op Banks, other financial institutions. Mr. Krishnamurthy Vice-

president IBA, Mr. Bhaskaran CEO Indian Institute of Banking and finance and

representatives from Print and Electronic Media present to cover the event.

The Chairman, SLBC in his opening remarks touched upon the following :

Chairman said that in the Budget speech of 2011-12, Hon’ble Finance Minister informed that

the GOI has significantly scaled up the flow of resources to rural areas to give a more

inclusive thrust to the development process. He then briefly touched upon some of the

highlights of the Budget relevant to the Banking Industry.

a] Agriculture Credit : Target of credit flow to the farmers has been raised from Rs. 3,75,000 crore this year

to Rs. 4,75,000 crore in 2011-12. Banks have been asked to step up direct lending for

agriculture and credit to small and marginal farmers.

The existing interest subvention scheme of providing short term crop loans to farmers

at 7 per cent interest will be continued during 2011-12. Considering the good response

to an additional 2 per cent interest subvention provided to those farmers who repay

their crop loans on time, proposed to enhance the additional subvention to 3 per cent

in 2011-12, thus, making the effective rate of interest for such farmers 4 per cent per

annum.

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b] Recapitalisation of Public Sector Banks: A sum of Rs. 6,000 crore has been provided

for the year 2011-12 to enable Public Sector Banks to maintain a minimum Tier I CRAR at 8

per cent.

c] Recapitalisation of Regional Rural Banks: As a part of financial strengthening of

Regional Rural Banks, an amount of Rs. 500 crore has been provided during 2011-12 to

enable them maintain a CRAR of at least 9 per cent as on March 31, 2012.

d] Micro Finance Institutions: The Micro Finance Institutions (MFIs) have emerged as an

important means of financial inclusion. "India Microfinance Equity Fund" of Rs. 100 crore has

been created for providing equity to smaller MFIs to help maintain growth and achieve scale

and efficiency in operations. To empower women and promote their Self Help Groups (SHGs),

“Women’s SHG’s Development Fund” with a corpus of Rs. 500 crore has been created.

e] Micro and Small enterprises play a crucial role in furthering the objective of equitable and

inclusive growth. For the year 2011-12, Rs. 5,000 crore is provided to SIDBI for refinancing

incremental lending by banks to these enterprises.

f] The Public Sector Banks have been directed to achieve the target of 15 per cent of Priority

Sector Lending for loans to Minority Sector.

g] Housing Sector Finance:i) To further stimulate growth in housing sector, the existing scheme of interest subvention of 1

per cent on housing loans has been liberalised by extending it to housing loan upto Rs.15 lakh

where the cost of the house does not exceed Rs. 25 lakh from the present limit of Rs.10 lakh

and Rs.20 lakh respectively.

ii] Due to increase in prices of residential properties in urban areas, the existing housing loan

limit has been enhanced from Rs.20 lakh to Rs. 25 lakh for classification under priority sector

lending.

iii] To provide housing finance to targeted groups in rural areas at competitive rates, the

provision under Rural Housing Fund has been enhanced to Rs 3,000 crore.

iv] In order to enhance creditworthiness of Economically Weaker Sections (EWS) and LIG

households, it is proposed to create a Mortgage Risk Guarantee Fund under Rajiv Awas

Yojana. This would guarantee housing loans taken by EWS and LIG households.

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v] To prevent frauds in loan cases involving multiple lending from different banks on the same

immovable property, the Government has facilitated setting up of Central Electronic Registry under the SARFAESI Act, 2002. This Registry is expected to be operationalised by

March 31, 2011.

vi] Four-pronged strategy covering agricultural production, reduction in wastage of produce,

credit support to farmers and a thrust to the food processing sector has been formulated and a

sum of Rs.7,860 crore has been allocated for these schemes under the ongoing Rashtriya

Krishi Vikas Yojana (RKVY).

He then touched upon certain agenda items listed which required deliberations.

1. Financial Inclusion:He informed the house that Dr. D. Subba Rao, Hon’ble Governor RBI, recently visited

Bangalore for reviewing performance under Financial Inclusion and held an interaction with

the CMDs of Karnataka based banks. The Hon’ble Governor noted that the performance of

Banks in Karnataka under Financial Inclusion has been better than that of other States and

exhorted the participating Bankers to retain the lead and further expedite the process so that

the targeted villages are covered well before the deadline of March 2012. He said that

Governor wanted Bankers to submit a concept paper on ‘meaningful Financial Inclusion’. All,

Bankers were requested to deliberate on this crucial aspect and come out with their

suggestions in this regard.

Out of 3395 un-banked villages with population over 2000 identified in Karnataka, Chairman

said that only 1121 villages have been covered so far as against a target of 2253 villages to

be covered by March 2011. The shortfall in targets relates mostly to RRBs who are presently

in the midst of migration to CBS. He requested Chairmen of RRBs to take suitable steps and

step up the process so as to cover maximum number of villages by 31st March 2011.

Issues like connectivity, inadequacy of training and manpower at field level, delay in issue and

activation of smart cards etc, require urgent attention. Products like saving Bank accounts

remittances, entrepreneurial credit, Micro Insurance should be made available to each

account holder under Financial Inclusion.

2. Flow of Credit to Agriculture:In order to achieve targeted annual growth of 4% under Agriculture, there is a need to step up

flow of credit to Agriculture by focusing on investment credit in addition to the thrust on short

term credit. He said that Banks have reported outstanding level of Rs.45843 crore as at Dec, 3

2010 under Agriculture registering an increase of Rs. 14054 crore over corresponding Dec,

2009 position thereby showing an increase of 44.21%. However growth excluding new

addition is 20.05%.

As we are all aware, Govt. of Karnataka is providing Interest Subsidy on Crop Loans [up to

Rs. 50000] to farmers which is in addition to the interest subsidy provided by GOI. Since this

is an incentive based scheme linked to repayment within the due date, He requested the

banks to provide wide publicity and take maximum advantage by claiming appropriate subsidy

after proper verification of data.

3. Micro and Small Enterprises Sector:To support Micro and Small Enterprises Sector, RBI has advised banks not to insist on

collateral security, mandatorily, in case of loans upto Rs.10 lac. All scheduled commercial

banks should therefore ensure enhanced credit flow to this crucial sector and achieve the

targets set both for quantum of credit as well as number of beneficiaries. He requested all

scheduled commercial banks to take maximum advantage of guarantee scheme operated by

CGTSME to provide collateral free loan upto Rs.1 crore to meet the targeted growth. The

outstanding levels of advances under MSME was Rs. 37545 crore as at Dec. 2010 registering

an increase of Rs. 10713 crore over corresponding Dec, 2009 position thereby showing an Y-

o-Y growth of 39.93%. However growth excluding data of new additions is 25.25%

4. Housing LoansHe stated that GOI in its recent Budget has announced various measures to stimulate the

Housing sector in the country like enhancement of housing loan limit to Rs. 15 lakh for

receiving interest subvention of 1% and enhancement of the existing housing loan limit from

Rs.20 lakh to Rs. 25 lakh for classification under priority sector etc.He requested all Banks to

provide the required focus to Housing loans with special attention to affordable Housing.

However loaning under Interest Subsidy Scheme for Housing Urban Poor which is aimed at

facilitating institutional loans to Economically Weaker Sections (EWS) and Lower Income

Group (LIG) beneficiaries with interest subsidy of 5% for loans upto Rs.1.00 lakh is still to

pickup. The ISHUP scheme has been dovetailed with GOK’s “Vajpayee Housing Scheme”.

Banks have committed to achieve a target of 50,000 loans by March 2011. He informed that

20107 applications have been submitted by GOK to various Bank branches. However Banks

have so far lent Rs. 7.00 crore under ISHUP through 714 accounts. Overall, the Banks have

disbursed over Rs. 5787 crore under housing loans involving 47624 accounts upto

31.12.2010.

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5.Education Loans :

Banks in Karnataka have shown Y-O-Y growth of 42.45% in the level of outstanding advances

under education loans upto Dec’ 2010. Banks should also take full advantage of 6% interest

subsidy provided by the Govt. of Karnataka for Education Loans for professional courses and

also the Govt of India interest subsidy scheme for students belonging to economically weaker

sections with parental family annual income less than Rs. 4.50 lakhs, to ensure adequate

loaning to this important sector. It was also informed that the State government has notified

Tahasildars as designated authorities to issue income certificate for the purpose of this

scheme.

6.Credit to Weaker Sections :He was happy to inform that the banks have shown Y-O-Y growth of 47.39 % in the level of

outstanding advances under weaker sections as at Dec’ 2010 over the previous year. The %

of weaker section advances to total advances stood at 11.83% as against the stipulated target

of 10.00%.

7.Credit to Minority Communities :Banks have shown a satisfactory Y-O-Y growth of 46.27% growth in the level of outstanding

advances under minority communities as at Dec’ 2010. It is mandatory to achieve a minimum

level of 15% of Priority Sector Advances to the segment by March 2011.

8.Self Help Group, Joint Liability Groups and Micro Credit :

Government, through NABARD and Banking Institutions, is encouraging formation of SHG

and Joint Liability Groups [JLGs] of farmers. The target of providing KCCs to financially

excluded farmers, particularly tenant farmers, oral lessees and farmers belonging to weaker

sections can be best achieved by linking this programme with promotion of JLGs/SHGs.

Further ministry of Agriculture,GOI, has advised the Banks to cover all eligible farmers under

KCC scheme. SLBC has been advised to decide Bank wise targets for number of

farmers/accounts to be covered during 2011-12. He requested Banks to deliberate on this

issue.

Besides credit and savings availability of other products like micro-insurance, micro-

remittance, micro-pension etc., can prove very useful for facilitating the objective of financial

inclusion. This gradual and evolutionary growth process will help the rural poor to reach

reasonable economic, social and cultural empowerment, leading to better quality of life. Banks

need to continue their focus on forming more and more SHG/JLG and providing credit linkage

on a mission mode.

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Chairman said that in Andhra Pradesh Government has federated SHG which is proving to be

very beneficial. Similarly, the Government of Tamilnadu is forming Panchayat level federations

to fill the gap in Finance made available to SHG with Panchayat level federation playing the

role of intermediary and receiving bulk loans from Banks for onward disbursal.

This SLBC can also deliberate on such innovative models for improving flow of credit to needy

sectors.

9.Implementation of Govt. Sponsored Schemes/Poverty Alleviation Programmes:

Banks have been participating in the implementation of various schemes sponsored by

Central and State Government in coordination with the respective nodal

agencies/departments. He requested all Banks and the Line Departments to work in tandem

to implement the various central Govt. schemes like Prime Minister’s Employment Generation

Programme ( PMEGP), Swarnajayanthi Gram Swarozgar Yojana ( SGSY), Swarnajayanthi

Shahari Rozgar Yojana ( SJSRY), DRI and other Govt. sponsored schemes in right earnest

and achieve the target fixed for the current year.

 10. Banking Statistics He placed before the members in brief the business trends and performance of banking

sector as at Dec. 2010.

The aggregate deposits of Banks was Rs.3,04,413 cr as at the end of Dec’ 10, as

compared to the level of Rs.2,16,812 cr as on Dec’ 09, recording a growth rate of 40.40%;

this includes data of new/additional banks aggregating to Rs.52,307 cr. included in this

quarter. Growth rate excluding data of new additions is 16.28%.

The total outstanding Advances of Banks was Rs.2,37,977 cr as at the end of Dec’ 10

when compared to the level of Rs.1,56,565 cr as at Dec’ 09, registering an increase of

52.00%; this includes data of new/additional banks aggregating Rs.47,015 cr included in

this quarter. Growth rate excluding data of new additions is 21.97%.

CD ratio as at Dec’.2010 was 78.18% which is above the national average of 72.60%.

Outstanding level of Priority Sector Credit as of Dec’ 2010 was Rs.1, 03,302 cr constituting

46.83%, surpassing RBI stipulation of 40%.

Level of agricultural advances was a Rs.45,843 cr, constituting 19.26% of bank credit,

which is above RBI stipulation of 18%.

Advances to MSME sector stood at Rs.37,545 cr as at Dec’ 2010 compared to Rs.26,832

cr in Dec’ 2009 showing a growth of 39.93%. Growth rate excluding data of new additions

is 25.25%

Under Annual Credit Plan for the year 2010-11, all Banks have disbursed loans amounting

to Rs.30,152 cr under priority Sector as at Dec’ 2010 against annual projection of

Rs.38,952 cr attaining 77.00% of the target.6

He expressed deep gratitude to the Govt. of Karnataka and its officials, more particularly the

Chief Secretary, Development Commissioner, Principal Secretaries and others and also to the

RBI, NABARD and bankers who have made SLBC as an active and vibrant forum.

Release of Book on Inclusive growth through BCs- Kannada edition.Sri.S.V.Ranganath, Chief Secretary released Kannada edition of a book on Financial Inclusion

by BCs “Inclusive Growth thro Business Correspondent”. While speaking on the occasion

Sri.Bhaskaran, CEO of Indian Institute of Banking and Finance thanked the SLBC forum for

giving the opportunity. Business Correspondents are a vital link who carry the card and deliver

it to customers. Therefore, an effort was made to study in detail, the roles and responsibilities

of Business Correspondents and the role played by them in inclusive financial growth of the

Country. Unless education co exisists with development programmes some of the past

mistakes may continue, he said. Since BCs form the grass root level link, it was felt that there

was a need to publish this book in all vernacular languages thereby equipping the grass root

level functionaries. A training module is also formed to train the BCs. He also appreciated the

effort of NABARD for accepting this initiative and reimbursing the training cost in full and

requested all the banks to take up training of BCs as the intention was to educate the BCs.

The Chief Secretary, Sri. S.V. Ranganath welcomed the gathering and expressed pleasure

in participating in the meeting. He congratulated the Chairman, Syndicate Bank for

comprehensively touching upon all the issues to be discussed in the meeting. He wanted to

take the opportunity to congratulate the Indian Institute of Banking and Finance CEO

Sri.Bhaskaran for a wonderful book on Financial Inclusion through Business Correspondents

and said “this book has not come a day too soon”. In spite of the best efforts and minds of

public sector banks, we have a fair distance to go, he said. One thing which is fundamental is

that, whether we contribute to better governance, he queried. One of the key factors is

Financial Inclusion, thereby increasing electronic transactions through banks. A lot of

complaints are received in distribution of Old Age Pensions by State Govt, he said. These are

issues which can be solved by routing payments through banks, he said. He said that the

State should move towards routing all financial transactions through banks. He asked banks

to discuss the steps taken towards following the directions of State Govt/RBI in this regard. He

was happy to declare Kolar District as having provided with Banking services to all villages

with population of more than 2000 ahead of schedule. He requested the banks to implement

the Financial Inclusion programme in true spirit and deed.

He also stressed the need for growth of agricultural credit. He said that this was stressed in

the Union Finance Minister’s meeting also. In Karnataka though there is growth, it is not

sustained growth, he said. He spoke about the innovative scheme “Bhuchetana” which would

increase the micro nutrients and thereby increase yield. He asked for involvement of

Agricultural Department and also University of Agriculture. He asked for banks to be their 7

partner, which is a part of national mandate also. He reiterated that grass root level branch

Managers should be sensitized to make this a success. This year, Chief Minister has come

out with Suvarna Bhoomi Yojana for small and marginal farmers which give loans to improve

their livelihood through Horticulture, organic farming, Bio fuel, aviary etc. The scheme

envisages helping 10 lakh beneficiaries with Rs.5000/- in 2-3 installments each. The data can

be transferred to banks also, he said. He asked SLBC to issue instructions that these farmers

are encouraged. Horticulture, he said is being given a major push in the State. Per capita

income in places where horticulture is encouraged is good as against traditional agricultural

produce. The State plans to improve horticulture, micro irrigation etc. Investment is also

directed to technology transfer, poly houses etc. He said that Horticulture is sunrise area. He

also informed that a global agri business meet is planned during August. A letter from Govt of

India is received to provide to extend Kisan Credit Card to all eligible farmers so that everyone

is a part of Financial Inclusion. He requested NABARD and Public Sector Banks to encourage

JLG, SHG to bridge the gap. 1500000 cards were targeted to be issued in the year. He asked

the banks to ensure that this is achieved and periodically review progress in implementation.

The chief Secretary also asked banks to hasten the process of lending under ISHUP as the

scheme was being given priority by GOI. He also requested banks to come up with

issues/support which require intervention from State Government. He requested the banks to

lend credit to Minorities and ensure implementation of 15 point programme.

In reply to the Chairman, SLBC’s point about formation of SHG federations like in Tamilnadu

and Andhra Pradesh, the Chief Secretary said it is proposed to introduce Andhra model in the

state.

Regarding CD Ratio, Chief Secretary said when compared to southern states, Karnataka CD

ratio should be more. The same was discussed in the Finance Minister’s meeting held at

Hyderabad and it was suggested to be improved upon. He also assured all co-operation to

banks from the State’s side.

The Chairman, SLBC called upon the bankers to observe this year as year of Agriculture and

Financial Inclusion.

Sri.Ajay Seth, Secretary [B&R], Finance Dept., while interacting to the distribution of Kisan

Credit Cards expressed concern that co-operative banks were loaded with target and that

these banks lack the capacity and resources of large commercial banks and this needs to be

relooked. He said the entire 1500000 cards needs to be distributed by commercial banks.

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Sri. Vijay Bhaskar Regional Director RBI, in his address said that Banks in Karnataka have

covered 33% of the villages and proposed to cover 45% before March 2011. RRBs of

Karnataka have covered 58% of the All India coverage. He reiterated the words of Hon’ble

Governor of RBI to take Financial Inclusion to next higher level. He said that we have been

concentrating on quantitative work and now the focus needs to be shifted to qualitative work to

make financial inclusion more meaningful and holistic which will improve the economic status

of the people.

He also highlighted the action point emerged out of Deputy Governor Chakravarthy’s

meeting with Bankers and other stake holders held on 13th and 14th January 2011. The

important action points are:

1. Increase in number of FLCCs , commissioning of mobile vans etc.

2. Covering urban poor

3. Finance to MSME units and to have a proper data base of MSME units in Karnataka.

Speaking on connectivity issues, he said that out of nine model villages selected, five villages

are having connectivity problem. There is acute shortage of power in villages. Chief Secretary

advised to provide list of villages which require connectivity, power supply etc so that

Government will take required steps like talking to Planning Commission, Gas Authorities or

purchase power etc.

Regional Director, RBI also spoke about Data issues like smart cards etc which are to be

issued by Technology providers who in turn have some cost issues which needs to be sorted

out with Bankers/State Govt. In reply to the same, Chief Secretary asked for a note to be put

up for cost issues to be discussed in detail. He also asked for motivating the man on the job

to assist State Govt for collection of funds as attitude was also an issue which would hinder

taking financial inclusion to the next higher level.

Dr, Venkatesh Taghat CGM NABARD, in his address said that coverage of Kisan credit card

is to be increased since only 50-60% of target is reached. Banks to adopt innovative methods

like issuing smart KCC cards introduced by Central Bank of India. He observed that though

there is growth in agricultural advances there is a decline in number of accounts and this trend

is an all India phenomena. It is also reported that there is increase in agriculture lending by

Metro branches. In an experiment conducted by NABARD there are 21000 new JLGs formed

in the State. JLG and SHGs is useful forum for increasing credit. Government decision to

exempt stamp duty on JLGs will increase lending through JLGs. He said that we are way

behind financing two lakh SHGs during last year and balance outstanding under SHGs has

come down. He briefed about Gujarat model of Niranthara Jyothi Krishi Mahotsav where steps

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are initiated before cropping season for providing required inputs in time. He also requested

State Government to extend equity support to Chico Grameena Bank

Mr. N. Krishnamurthy Vice-president IBA briefed about Swabhimaan FI campaign launched by

IBA on 10.02.2011 to bring about awareness among public at large and also about the

proactive steps taken by Government in providing basic banking facilities to the rural poor in

unbanked villages. He said that first phase of FI campaign has been successfully

implemented by IBA and second phase of ground level sensitization at the villages by way of

floats, posters, wall paintings, counseling etc., through the coordinated efforts of SLBCs and

with the State Government support. He also touched upon Financial Inclusion fund, FLCCs

micro ATM standards and Government scheme payments to rural poor through UID.

He presented an edited version of the launch programme where Hon’ble Chair person UPA,

Finance Minister GOI, Finance Secretary GOI, spoke on the programme.

The Agenda was taken up for discussion by the Convenor Sri G.Ramanathan, GM, Syndicate

Bank.

AGENDA 1.0 CONFIRMATION OF THE MINUTES OF 115th SLBC MEETING

The Minutes of 115thSLBC Meeting held on 17.01.2011 were circulated vide letter No.

882/0479/SLBC/F.101-115 dated 10.03.2011. The Minutes was approved as no amendments

are received.

AGENDA 2.0 FOLLOW-UP ACTIONS ON THE DECISIONS TAKEN DURING PREVIOUS SLBC MEETING

2. A [1] : Providing Banking Services in all villages with population above 2000 by March 2012.

Govt of India, Ministry of Finance, has advised SLBC to furnish a road map for extending

banking facilities to all villages with population over 2,000 and to furnish District wise/Block

wise/Bank wise/Branch wise/ Village wise details. It has also been advised to indicate the time

schedule for providing banking facilities for the next two years i.e 2010-11 and 2011-12 so that

all villages with population more than 2000 presently not having any bank branch, will be

having a bank branch or a BC model in place by March 2012.

In all, there are 3395 [revised] villages with population of over 2000 having no Bank Branches

in the State have been identified and it is proposed to cover 2253 during 2010-11. The house

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was informed that 1121 villages have been covered upto February 2011. Against all India

coverage of 12 %, Banks in Karnataka have covered 27%, highest among states as on Dec

2010. A meeting of bankers implementing the programme was held on 09.03.2011 and Banks

have agreed to cover 1528 villages by March 2011 covering 68%. During the meeting, certain

banks wanted swapping of villages for operational convenience. The issue was discussed and

it was agreed that swapping, if any, among banks shall be made after April 2011 and banks

interested in swapping shall submit their willingness in writing to SLBC. While appreciating the

efforts put in by the bankers of Karnataka State for their good performance, bankers were

requested to provide the needed banking services to the targeted people of the State leading

to a meaningful Financial Inclusion rather than mere quantitative figures. Bankers were also

requested to devise their own innovative method of evolution of Financial Inclusion leading to

successful implementation of the scheme, ultimately ensuring that the benefits reach the

people.

Action: Banks/LDMs

2 A [2] Electronic Wages and Benefit Transfer [EWBT] Scheme  

Reserve Bank of India had proposed an incentive scheme to hasten the pace of adoption of

the smart card based EWBT mechanism by banks for routing the payment of social security

benefits, wages under MGNREGA and payments in other Government schemes. The scheme

envisages that banks would be reimbursed Rs.50/- per account for opening accounts with bio-

metric access for routing the aforesaid payments subject to State Governments agreeing to

pay to the transacting banks, certain transaction fee [1.5% in the state] of the value of the

payments effected through these accounts.

RBI, vide letter RPCD. CO.FID. No. 13091/12.01.19/2009-10 dated 21-06-2010 advised all

scheduled commercial banks including RRBs that the scheme of reimbursing `50/- per

account will not be extended after 01.07.2010. In view of the RBI decision, GOK was

requested to reimburse the amount of `95/- per card which was agreed earlier as per original

MOU in addition to transaction fee of `1.5%.

The House was informed that SLBC had organized meetings of the implementing Banks and

the respective LDMs along with the Technology Providers to review the progress under the

Scheme. During the meeting the bankers and technology providers were informed about wide

gap between the enrolment, accounts opened and cards issued. The Bankers were advised to

review the status of enrolment and pursue with the TPs for delivery of cards after enrolment,

data processing, account opening and after approval of the enrolled data [in respect of SSP 11

Scheme]. It was suggested that better co-ordination between LDM/Banks, Service providers

and Govt Agencies is required to improve the implementation of the scheme.

Convenor SLBC informed that extending financial services by one Bank with limited branch

network may be difficult. In Dharwad district Axis Bank is implementing EBT Scheme in the

entire district, and wanted to know whether Axis Bank can extend all the facilities to villages

from their Bank. Axis Bank representative was absent and the issue could not be discussed.

RD RBI said that one bank cannot cover entire district. It was suggested that lead bank of the

District i.e., Vijaya Bank shall discuss the issue during DCC and come to an understanding for

distribution of villages among Banks.

Action: Banks/LDMs/Govt/TPs

2 A [3] EWBT Scheme – MIS and PGRS  

Systems for MIS and PGRS are to be put in place by Banks implementing EWBT Scheme. In

this regard, SLBC had, after discussing with subsidiaries of SyndicateBank [SyndBank

Services Ltd] and Canara Bank [Canbank Computer Services Ltd] sought proposal from

CanBank Computer Services Ltd for establishing MIS and PGRS.

Initially it was decided to place an end to end solutions with Can Bank Computer Services

Ltd., Later, Govt decided to develop the software through NIC and facility management and

hardware procurement to be entrusted separately. It has been decided now that SLBC will

procure necessary hardware and facility management will be entrusted to Can Bank

Computer Service Ltd. Roles and Responsibility of all stake holders has been drawn. The

SRS document proposed by GOK has been circulated to all the banks implementing EBT,

which was concurred by them. The SRS document has since been finalized, the hardware can

be procured on getting the hardware specification from NIC.

2.B : SETTING UP OF FINANCIAL LITERACY AND CREDIT COUNSELING CENTRES.

SyndicateBank, Canara Bank, Corporation Bank, SBI, SBH SBM and Vijaya Bank have set up

FLCCs at 21 centers as per RBI guidelines issued earlier. Reserve Bank of India, Central

Office advised the banks to take steps to establish FLCCs as per Model Scheme to achieve

the objectives of setting up of such centers. SLBC requested the Lead Banks to take steps for

setting up FLCCs in the respective/ remaining lead districts and to review/revisit the

functioning of the existing FLCCs to confirm to the model scheme.

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Syndicate Bank and Vijaya Bank have jointly formed a trust, “Jnana Jyothi Financial Literacy

and Credit Counseling Trust” for setting up of FLCCs in their lead districts, on the lines

suggested by RBI. Karnataka Bank and KVGB expressed their willingness to join the Trust.

Canara Bank has formed FLCC Trust by name Canara Financial Advisory Trust.

Representative of Corporation Bank informed that they have formed FLCC trust. SBI group

along with its two RRBs has reported that they are in the process of forming a trust by name

Daari Deepa Financial Literacy and counseling centre.

Regarding opening of FLCCs at District level, Canara Bank is yet to open FLCCs at Bangalore

Rural and Urban, Davanagere, Hassan and Shimoga Districts. Syndicate Bank is yet to open

FLCCs at Belgaum, Bellary, Bijapur and Bagalkot districts. These banks have been advised to

open FLCC centres at the earliest. It was decided to set up an outlet of Jnana Jyothi Financial

Literacy and Credit Counseling Trust in the premises of KFRC in Bagalkote. SBI has informed

that they have operationalised FLCC at Yadgir District. Banks were also advised to open

FLCCs at Taluk level. RD RBI, suggested to have a date and deadline for opening FLCCs at

Taluk level. Convenor SLBC requested RRBs to join FLCC trust.

Action: Banks/LDMs

2.C INTEREST SUBSIDY SCHEME ON CROP LOANS TO FARMERS UPTO Rs.50000/- THROUGH PSBs/RRBs

Govt. of Karnataka has accorded sanction for the above scheme for providing interest

subsidy, so that farmers will get loan at 3% for crop loans [up to Rs.50000] availed through

Public Sector Banks and Regional Rural Banks [RRBs]. Detailed guidelines have been

communicated to Public Sector Banks/RRB. Govt of Karnataka in the budget for 2010-11 has

announced continuation of Interest Subsidy Scheme on crop loans to farmers up to

Rs.50000/- through PSBs and RRBs.

During the current year, banks are to charge interest to crop loans at 5% [upto `3.00 lacs] to

borrowers who repay promptly within the due date as per extant guidelines of RBI/Ministry of

Finance. Hence banks were advised to claim interest subvention of 2% for the year 2010-11

from GOK under the above Scheme.

Govt. of Karnataka has already released Rs.40 Crore as advance subsidy under the scheme,

for reimbursement of interest subsidy claims to PSBs and RRBs. It is observed that claims

made by bank under the scheme are not upto the expected level. Hence, bankers are

requested to make claims under the scheme covering all eligible accounts.

13

The Banks and LDMs have been advised to popularize the Scheme of Interest Subsidy to

short term crop loans [upto Rs.50000/-] to farmers launched by GOK so that maximum

farmers can get benefit of interest subsidy and banks can utilize the interest subsidy already

released by the GOK in this regard.

So far, claims in respect of 165505 farmers have been received from the banks amounting to

`9.16 crore and the claims are paid to the bankers by Dept of Agriculture. Bankers who have

not made claims under the scheme are requested to lodge claims along with auditor certificate

immediately. Representative of department of agriculture informed that suggestions to

improve coverage of the scheme recommended by Bankers and SLBC has been submitted to

Government and decision is awaited.

Action: Banks/LDMs/Dept of Agriculture

2.D REHABILITATION OF SICK MICRO AND SMALL ENTERPRISES[ MSEs].

[Recommendations of Dr. K.C.Chakrabarty Committee].

GOK has taken steps for creating Urban Property Ownership Records [UPOR] under PPP

model in 5 cities [Bellary, Hubli-Dharwad, Mangalore, Mysore and Shimoga]. The UPOR

project provides for noting the mortgage charge on the Urban properties. The banks have

been advised to furnish the data on the existing mortgage particulars in these cities for

inclusion in the registry. The Secretary to Govt.( Bhoomi & UPOR), Revenue Department

made a presentation on the Scheme. He requested IT people from Banks to join the

programme for successful implementation. CMD Syndicate Bank, said that IBA is planning to

set up central electronic registry under the SARFAESI Act 2002. Their system of collecting

data is complex and requested revenue secretary to give the details of the UPOR project so

that it can be suggested to IBA.

GOK has computerized agricultural land records under Bhoomi Project. Secretary(Bhoomi &

UPOR), revenue department also made a presentation with regards to online creation of

charge and obtaining property records by Banks.

It was informed that the scheme will be implemented on pilot basis in Dharwad Taluk and

requested Bankers to co-operate in implementation of the project and called for closure of

manual system in Dharwad district.

A BRIEF NOTE ON INTEGRATION OF BHOOMI WITH BANKS14

The agriculture is the main occupation in Karnataka. More than 70 percent of the rural population is dependent on agriculture and allied activities. The banks and co-operative institutions lend money to the farmers against their land set as security. The banks and co-operative institutions expect that, when ever the loan is granted, a charge is created in column 11 of the RTC. The entry of the loan in the RTC would alert the prospective buyer against the liability. Every charge and discharge is always through a mutation.

At present, the charge of such loans and advances are created in column 11 of the RTC either through a registered mortgage deed or through an unregistered declaration depending upon the amount of loan. When ever there is a registered mortgage deed, the information would be transmitted to Bhoomi kendras from the Sub Registrar’s office and a mutation would be initiated. In respect of un-registered mortgage, the declarations would be manually sent to tahsildar (more often the farmer would carry this declarations) for initiating a mutation process.

In the existing process, the citizen is expected to knock many doors to get a small amount of loan, while banker is worried about the creation of charge in the record of rights. Unfortunately, the farmer has to submit the RTC before applying for the loan – to prove he is the owner of the land and after the creation of the charge to satisfy the bankers’ needs.

In Karnataka, after the successful implementation of Bhoomi project, many innovations were done. Bhoomi and Bank integration is one among such innovative attempts, where Bhoomi was integrated with State Bank in Dharawad on a pilot basis. While the attempt of integration was successful from the point of technology but, the banks were not equipped with systems and technology at that time. Hence, it was considered as a premature attempt.

Now, when the core banking is in place and the banks have been computer literate, it would be proper for promoting the tight integration of Bhoomi with Banks. Bhoomi has developed a small Web application to handle the pledge and release transactions. The Secretary to Government (Bhoomi and UPOR) who is incharge of Bhoomi project would extend all co-operation to the bankers in promoting the Bhoomi –Bank integration. The prime objective of this integration would be:

(a) The bankers would use bhoomi database for entering pledge and release transactions.

(b) The bankers would be able to see the extent of agricultural land of the loanee.(c) The farmer need not submit the RTCs copies to the bankers.(d) The bank would be only one single window contact to the farmer.(e) The banker would be able to know as to whether the selected farmer has any liability

with other banks or financial institutions.(f) The banker would pay the mutation fee on a consolidated basis to Bhoomi.(g) The Banker would get an alert when ever a farmer who has liability in their bank is

trying to sell his lands through SMS or e_mail(h) The banker would know the status of the proposal for creation of charge.

Action: Banks/GOK

2.E. INTEREST SUBSIDY SCHEME FOR HOUSING TO THE URBAN POOR [ISHUP]

Ministry of Housing and Urban Poverty Alleviation, Govt. of India has launched an Interest

Subsidy Scheme for Housing to the Urban Poor (ISHUP). The scheme is designed as an

15

additional instrument for addressing the housing needs of the Economically Weaker Sections

(EWS)/Low Income Group (LIG) segments in urban areas. The scheme envisages the

provision of interest subsidy to EWS and LIG segments to enable them to buy or construct

houses. As per the guidelines, major Banks and Housing Finance Companies have entered

into a MOU with National Housing Bank/HUDCO, the national nodal agencies for

administering interest subsidy.

The income criteria for EWS has been increased to Rs.5000/- per month and from Rs.5001-

10000 per month in case of LIGs. This will enable wider choice of beneficiaries for financing

under the scheme and improve viability of the proposal.

Steering Committee of ISHUP in its meeting held on 16.7.2010 has informed that “The

scheme will be implemented through Scheduled Banks in the Public and Private sector,

Regional Rural Banks, Housing Finance Companies, Micro finance Institutions and other

statutory financial institutions and/or any other agency approved by MH&UPA’

Operational issues like income certificate, property records etc., have been settled. ULBs

have withdrawn old applications and resubmitted the applications alongwith required

documents. 20107 applications have been sponsored to different bank branches in the State.

Only 714 loans amounting to `7.00 crores have been lent by banks. It is reported that some of

the controlling offices have not issued revised guidelines particularly relaxations made, to their

branches. Banks are requested to take steps to sensitise branches about the scheme.

DMA to advise ULBs to forward applications to banks who have signed MOU with

NHB/HUDCO. It is also reported that applications reported to have been sponsored to banks

have not reached the Bank branches. DMA to suitably advise ULBs in this matter.

Private sector Banks and RRBs who are yet to sign MOU with nodal agencies were

requested to sign MOU with the nodal agencies for successful implementation of the

programme.

National Housing Bank has informed that in the Steering Committee meeting held on

15.10.2010 the following action points have emerged for consideration and implementation by

member banks.

1. It is informed that MFIs/NGOs/SHGs/CBOs may be associated as business

correspondent/business facilitator and a fee of `250/- per approved application would

be provided to such correspondent/facilitator under the scheme. The Steering

Committee raised the facilitation incentive from `100/- to `250/- for the current

financial year and depending on response the position on the same will be revisited in

the next financial year.

16

2. The scheme guidelines mention that subsidized loans under the scheme would be

available to an EWS beneficiary for a house of at least 25 square meters and 40

square meters in case of LIG beneficiaries. The Steering Committee noted that the

various claims are either having larger built up area or less than the stipulated

requirement. However, as the guidelines do not provide for a maximum size of plot

and the plots do not generate income by themselves a relaxed view can be taken in

this regard. The Committee is of the view that as the construction envisaged is on a

plot, the built up area may be considered for the purpose of size determination

covering more than one floor if need be. As regard the maximum size it was decided

that this may be left to the judgment of the concerned State Level Nodal Agency

which is sponsoring the applications. Further, regarding the cases where the built up

area is less than 25 sq mtrs or 40 sq mtrs for EWS and LIG beneficiaries respectively,

it was decided that given the high cost of land in the urban areas a lenient view can be

taken (by nodal agencies) provided the house had the space for necessary amenities

like kitchen slab, toilet etc.

Action: Banks/LDMs/DMA

2. F SETTING UP OF KARNATAKA FARMERS RESOURCE CENTRE [KFRC] AT BAGALKOT.

Govt of India, Ministry of Finance had suggested that banks may co ordinate through SLBC

and NABARD for setting up of Farmers Resource Centre [FRC] for providing training and

related services to farmers in the State. Considering the suggestion of the Govt. of India and

the usefulness of the training to the farming community, SLBC decided to set up FRC by

pooling resources from Lead Banks for building infrastructure and maintain it on ‘an on going

basis’. GOK has allotted 8 acres of land free of cost at Navanagar, Bagalkot, through

Bagalkot Town Development Authority [BTDA] for this purpose.

The Trust Deed of KFRC was registered at the office of the Sub Registrar at Bagalkot on

30.11.2010. The 8 acres of land so allotted by GOK to KFRC has been registered in the name

of KFRC. First meeting of the Board of Trustees of KFRC was held on 17.1.2011 under the

Chairmanship of Sri.Basant Seth, Chairman and Managing Director of Syndicate Bank and

Chairman, KFRC Trust. Foundation Stone Laying and Centre’s Inauguration ceremony was

conducted at Bagalkot on 03.02.2011. Sri. Sri. Sri. Ravishankar Guruji, Art of Living,

Bangalore unveiled the foundation stone and inaugurated the centre.

17

KFRC has commenced the activities and it has organized various seminars/workshops in

association with the Govt and other agencies. Two in house training programmes have been

conducted for the benefit of farmers.

The first meeting of Local Advisory Committee of KFRC was conducted on 7.3.2011 at

Bagalkot. All Banks including private, RRBs and co-operative banks were requested to join

KFRC by contributing to the corpus fund. In response, Karnataka Bank and Krishna

Grameena Bank have agreed to join the trust and contributed towards corpus. Other banks

were requested to join the KFRC.

Action: Banks

2 G: REPORT OF THE HIGH LEVEL COMMITTEE TO REVIEW LEAD BANK SCHEME - IMPLEMENTATION OF THE RECOMMENDATIONS

RBI had advised SLBC to implement the recommendations of the High Level Committee on

Lead Bank Scheme.

In this regard, SLBC has initiated steps in this direction on the following

1. Website for SLBC, Karnataka was launched during 112th SLBC meeting.

2. SLBC has advised Lead banks/Commercial Banks and LDMs to take appropriate steps

for implementing the recommendations pertaining to them.

3. Formation of Sub-Committees : SLBC has constituted the following Sub-Committees for

effective implementation of Lead Bank scheme and other developmental programmes in

the State.

i. Sub-Committee on Annual Credit Plan :

ii. Sub-Committee on Flow of Credit to Agriculture :

iii. Sub-Committee on Credit Deposit Ratio :

iv. Sub-Committee on Financial Inclusion :

v. Sub-Committee on SHG-Bank Linkage:

vi. Sub-Committee on Credit flow to SC/STs, Minority Communities and Weaker Section:

vii. Sub-Committee on Education Loans:

viii. Sub-Committee on Housing Loans :

ix. Sub-Committee on Recovery, Rehabilitation and other measures :

18

x. Sub-Committee on MSME

xi. Sub-Committee GSS

Conveners’ of Sub Committee’s were requested to conduct sub committee meetings

within 15 days of the quarter so that the minutes can be included in the SLBC Agenda of

the same quarter, to have uniformity.

Action: Conveners’ of Sub-committee

4. Banking outlet in all villages having population of 2000 and above. [Recommendation: 5- Para 3.10 & 3.11]

The issue is already dealt in detail in Agenda 2 [A]2

5. EBT for all Villages [Recommendation: 15- Para 3.23]

The issue is already dealt in detail in Agenda 2 [A]4

8: Dovetailing Government Schemes in ACPs.The outlay under the Govt. sponsored schemes are dovetailed by the Branches and

consolidated Block wise and District wise in the District Credit Plan/Annual Credit Plan

in LBR 1 . The District wise details for the Government Schemes will be consolidated

for the State District wise / Bank wise for review and monitoring by SLBC.

9: Priority Sector Monitoring and Information Systems[Recommendation: 67 Para 6.9]

As per the recommendations of High Level Committee to review Lead Bank Scheme,

controlling offices of the Banks to submit Block wise and District wise data to SLBC.

SLBC Convenor shall consolidate the information received from the concerned

controlling offices of banks and generate bank wise, block wise, district wise, sector

wise report.

The Committee also suggested IBA to design software which is common for all banks. As

decided during 114th SLBC, IBA was requested to develop suitable software. IBA has

informed that they are not having infrastructure and suggested that RBI would be in a better

position to develop the required software. During 115th SLBC, NABARD was requested to

develop suitable software. CGM, NABARD informed that they are not having necessary

infrastructure. It was suggested to have a separate meeting in this regard. During the 19

conference of SLBC convenors held on 3-4 March 2011, it was informed that RBI central

office is working on designing common format for all SLBCs and methodology to obtain data

directly from the banks for submission to SLBC. Considering the above, it was decided to

defer the issue for the time being.

AGENDA 3 : REVIEW OF BANKING STATISTICS AS OF DEC 2010

Branch Network

As at the end of Dec 10, the total number of bank branches in the State were 7099 Out of

which, Commercial Banks-5001, RRBs-1215, Co-operative Banks- KASCARD-177, APEX

BANK-31, DCC Bank-608, Ind. Coop bank-38 and KSFC-29 Branches.

DepositsThe aggregate deposits of Banks was `304413 Crore as at the end of Dec 10, when

compared to the level of `216812 crore as on Dec 09, registering an increase of ` 87601 Crore showing a growth rate of 40.40%. Growth rate excluding new additions during the

quarter is 16.28%.

Advances

The total outstanding Advances of Banks was `237977 Crore as at the end of Dec 10 when

compared to the level of `156565 Crore as at Dec 09, registering an increase of `81412 Crore showing a growth rate of 52%. Growth rate excluding new additions is 21.97%.

Credit-Deposit Ratio

The Credit to Deposit Ratio as of Dec 10 was 78.18% vis-à-vis 72.21% as of Dec-09 showing an

increase of 5.96%. The CD ratio was the highest at 102% in Rural areas as compared to 70% in Semi-

Urban,69% in Urban and 79% in Metro areas.

Further analysis indicates that some banks with good presence are having CD ratio below

60%. [SBM-57, corporation Bank-59, Karnataka Bank –39, IOB-54, OBC-54, UBI-55, ICICI-

56, HDFC-59]. These Banks were advised to take steps to increase flow of credit to

productive sector of the economy.

Priority Sector Advances

The outstanding level of total priority sector advances of Banks stood at `103302 Crore as of

Dec 10 as against `70355 Crore as at Dec 09 showing an increase of `32947 Crore recording

a growth of 46.83% excluding new additions growth is 27.08%. The percentage of priority

sector advances of Banks works out to 43.41% surpassing the Benchmark level of 40% as

stipulated by RBI.

20

The total agricultural advances as at Dec 10 were to the tune of `45843 Crore constituting

19.26% of the total advances of Banks as of Dec 10, out of which direct advances to

agriculture stood at `27859 Crore

The outstanding Advances to Weaker Sections by Banks was `28151 Crore constituting

11.83% of the total Advances. The outstanding advances to Small & Marginal farmers was to

the tune of `18985 Crore covering about 26 lakh accounts, constituting 41.40% of the total

Advances to Agriculture. The outstanding advances to SCs/STs were `7706 Crore constituting 3.24% of the total advances, there by showing an increase of `2354 Crore over

the previous corresponding year level.

HOUSING LOANS AND REVERSE MORTGAGE LOAN SCHEME:

The Banks have been financing construction of houses under different schemes to encourage

housing sector and to increase the availability of residential houses to the needy people. The

outstanding level of advances under housing as at Dec-10, stood at `29838 crore covering

419103 accounts. During the year 2010-11, the Banks have disbursed `5787 crore involving

47624 accounts during period ended 30.12.2010.

Public Sector Banks have formulated Reverse Mortgage Loan Scheme for the benefit of the

Senior Citizens. The Banks assisted 846 persons with a loan amount of `76 crore as at Dec

10. Progress under the scheme is poor and scheme needs to be popularized. Bankers were

advised to create awareness about the scheme among branches and public.

Action: Banks

EDUCATION LOANS:

With a view to provide financial assistance to deserving and meritorious students to pursue

higher studies, Banks have formulated education loan scheme as per IBA guidelines. As at

Dec 2010, the outstanding level of education loans stood at `3593 crore covering 190067 accounts. Banks have disbursed loans to 16743 students amounting to `227 crore during the

quarter.

Govt of Karnataka has designated Tahasildars for issue of income certificate under education

loan scheme of govt. of India. Under the scheme, Income Certificate is to be issued in the

prescribed format. It is reported that some Tahasildars are refusing to issue Income Certificate

21

in the format prescribed under the scheme. Govt of Karnataka was requested to advise the

Tahasildars in this regard.

Action:GOK- Revenue Department

Credit Flow to Micro, Small & Medium Enterprises [MSME] – Dec 10

As per the guidelines issued by GOI/RBI, the Banks have taken steps for increasing the flow of credit to

Micro, Small & Medium Enterprises. The outstanding level of credit to Micro Enterprises stood

at `9200 Crore. The advances to Small Enterprises were at the order of `13266 Crore. The

advances to Medium Enterprises stood at `15079 Crore as at Dec 10. The percentage of

advances to Micro & Small Enterprises [`22466 Crore] was at the order of 60% out of the

total advances to MSME Sector [`37545 Crore].

The sector-wise particulars are as follows:` in lacs

SLNo

SECTOR MANUFACTURING SECTOR -[PM up to Rs.25 lakh]

SERVICE SECTOR -[Equipments Upto Rs.10 lakh]

TOTAL (Rs. in lakhs)

  A/CS Amount A/CS Amount A/CS Amount1 MICRO ENTERPRISES 85669 325911 442046 594048 527715 9199592 SMALL ENTERPRISES 18454 781484 54141 545139 72595 13266223 MED ENTERPRISES 3876 493051 4289 1014885 8165 1507936

TOTAL 107999 1600445 500476 2154072 608475 3754517

COVERAGE UNDER CREDIT GUARANTEE SCHEME OF CREDIT GUARANTEE FUND TRUST FOR MICRO & SMALL ENTERPRISES [CGTMSE] – Under guarantee scheme of CGTMSE, Banks have covered 13404 units with an approved

amount of `61565 Lac during the year. [Source: Credit Guarantee Fund Trust for Micro &

Small Enterprises].

COLLATERAL FREE LOANS TO MICRO AND SMALL ENTERPRISES [MSE] SECTOR

RBI vide Cir.No.RPCD.SME&NFS.BC.No.79/06.02.31/2009-10 dated 6-5-10 stated that the

banks are mandated not to accept collateral security in the case of loans up to Rs.10 lacs

extended to units of MSE Sector. Banks may also strongly encourage their branch

functionaries to avail of the CGTMSE cover, including making performance in this regard a

criterion in the evaluation of their field staff.

All commercial banks and RRBs were requested to issue suitable instructions to controlling

offices/branches for meticulous/strict compliance in this regard.

22

Action: All Banks

AGENDA 4.0 IMPLEMENTATION OF ANNUAL CREDIT PLAN (2010-2011)

Consolidated Agency-wise targets and achievement under ACP 2010-11 is as under: -

(Amt ` in crore)

Sector Annual Target

Disbursements %age achmt over

TargetCom Banks RRBs Co-op

Banks KSFC Total

Primary 25970 11715 2966 3349 0 18030 69

Secondary 3167 5306 294 2 159 5761 181

Tertiary 9815 5360 748 0 253 6361 65

TOTAL PSA 38952 22381 4008 3351 412 30152 77

Production Credit [CL] 15470 7169 2636 3105 0 12910 83

Banks have disbursed `30152 crore under ACP 2010-11 up to Dec 2010 against annual

target of ` 38952 recording an achievement level of 77% under total Priority Sector.

Achievement under secondary sector is 181% and tertiary sector is 65%. Banks have

disbursed `12910 crores under crop loans against the annual target of `15470 recording an

achievement of 83%.

AGENDA 5.0 CENTRAL AND STATE SPONSORED SCHEMES5.1 PRIME MINISTER EMPLOYMENT GENERATION PROGRAMME [PMEGP] Khadi & Village Industries Commission [KVIC] is the nodal agency for implementing Rural

Employment Generation Programme [REGP] of GOI, Ministry of Micro, Small & Medium

Enterprises [MSME]. KVIC Mumbai has advised that while implementing the programme, the

nodal agencies/blocks have to ensure coverage of social category beneficiaries such as SC-

15%, ST –7.5%, OBC-27%, Minorities-5%, Ex Serviceman-1%, PHC –3%, Women-30%

(overall).

The progress under PMEGP for the year 2010-11 as at Dec 2010 is as follows:

[Amount ` in lacs]

Agency TargetsActual Achievement

Sanctioned by Banks

Disbursement by Banks

23

No. of Projects

Margin Money

Employment Generation

No. of Projects

Margin Money

No. of Projects

Margin Money

KVIC 621 868.81 6210 189 622 68 172

KVIB 621 868.81 6200 317 654 198 548

DIC 836 1158.40 8280 888 1638 143 385

Total 2078 2896.02 20690 1394 2914 409 1105

Requests are being received for financing by Banks located outside the Service area and

District. Under extant guidelines service area norms are applicable for Government

sponsored schemes. It is reported that financing through Banks located outside the District will

have operational problems like review and monitoring of implementation by the District

agencies. However, Bangalore Urban and Rural districts being located in contiguous area,

considering the suggestion SLBC permitted DTFC to relax service area norms on case to

case basis.

5.2 SWARNA JAYANTI GRAM SWAROZGAR YOJANA (SGSY) [2010-11] Progress under SGSY as of Dec 10 is as under: Amt. ` in lacs

CategoryCredit Credit disbursements

Target Amount Subsidy amt

Individuals 20831.25

239 79

SHGs 10625 4153

Total 10864 4232

Disbursement of credit and subsidy to weaker sections under SGSY as at Dec 10

All the banks are requested to take steps for achieving the targets under the scheme.

5.3 SWARNAJAYANTI SHAHARI ROZGAR YOJANA (SJSRY) – 2010-11

The progress up to Dec, 10 is furnished below –

[Amount ` in Lac]

Sl.No Category Credit Subsidy Total

1 SC 3416.85 1298.07 4714.93

2 ST 1000.74 431.36 1432.10

3 Minorities 549.59 209.74 759.334 Women 9125.86 3576.95 12702.815 Disabled 252.75 94.20 346.95

24

CategoryAnnual Target Achievement [Amt. ` in lacs]

Physical Financial Number Loan Amount Subsidy

USEP 1975 987.50 1278 1998.42 525.90

UWSP [Groups] 395 1185.00 172 998.63 368.50

5.4 SCHEMES OF Dr. B. R. AMBEDKAR DEVELOPMENT CORPORATION LTD

Progress as at Dec 2010 is as under:

[Amt. ` in lacs]

ParametersSelf Employment

Programme( S E P )

Industry-Service-Business( I S B )

Safai Karmachari Rehabilitation

Programme (SKRP)Annual Target 7500 860 NAAchievement 3687 516 94Bank Loan 849.17 842.67 39.25Margin Money 0.00 212.84 0.15Subsidy 331.72 19.05 9.20Total Assistance 1180.89 1074.56 48.60

5.5 SCHEME OF KARNATAKA S.T. DEVELOPMENT CORPORATION –

The Corporation is implementing 2 schemes, viz, Self-Employment Scheme and ISB Scheme

for the benefit of persons belonging to Scheduled Tribes.

The progress for Dec 10 is as follows. Amt ` in lacs

Name of the scheme

Annual Target Progress

Physical Subsidy Margin money Physical Subsidy Margin

moneyBank loan Total

Self Employment 2500 250.00 - 1406 130.85 0.00 293.07 423.92

ISB Scheme 300 30.00 150.00 236 9.10 113.81 420.62 543.53

TOTAL 2800 280.00 150.00 1642 139.95 113.81 713.69 967.45

SCHEME OF KARNATAKA MINORITIES DEVELOPMENT CORPORATION

The Corporation is implementing the Swavalambana scheme.

Progress as at Dec 2010 is as under:[Amt. ` in lacs]

25

TARGET ACHIEVEMENT

Physical Financial Physical Financial [Bank Loan]

7200 600 2335 229.27

5.7 SCHEME OF D.DEVARAJ URS BACKWARD CLASSES DEV. CORPN. LTD.

D Devaraj Urs Backward Classes Development Corporation Ltd. is implementing

CHAITANYA Subsidy cum Soft Loan Scheme.

[Amt. ` in lacs]Target for the year 2010-2011

Physical TargetFinancial Target

Subsidy Margin Amount Total

5000 250.00 750.00 1000.00

Achievement as at Dec 2010

Physical Financial

Subsidy Margin Amount Total Bank loan

2458 122.90 271.42 394.32 1073.54

AGENDA 6.0 SPECIAL FOCUS PROGRAMMES

6.1 CREDIT FLOW TO MINORITY COMMUNITIES The Scheduled Commercial Banks, including RRBs, have extended loans to 198360 beneficiaries amounting to `2050 Crore during 2010-11 as at Dec-10. The outstanding level

of advances to Minority Communities as at the end of Dec-10 was `10693 Crore constituting

10.35% of PSA

FLOW OF CREDIT TO MINORITY COMMUNITIES IN IDENTIFIED DISTRICTS

The outstanding level of credit to minority communities in the identified districts as at Dec 10 is

as follows – [` in Crore]

26

Name of the District Bidar Gulbarga Dakshina Kannada

Name of Lead Bank SBI SBI SyndicateBankTotal Advances 1884.29 3498.34 8826.40Priority Sector Advances 1437.92 3020.60 5591.21Lending to Minority Community 223.29 419.84 1547.98% of Minority Community Lending to PSA 15.52 13.89 27.68Stipulated % of Minority Community Lending to PSA 15.50 15.00 15.00

The flow of credit to minority communities in Gulbarga District requires improvement to

achieve the stipulated target of 15% of priority sector advances in the district. The banks

operating in the districts were requested to increase flow of credit to minorities.

Opening of NFA Accounts for students belonging to minority community

Ministry of Finance has informed that Banks are hesitant in opening of No Frill Accounts in

favor of students from minority communities who wish to avail of the scholarships being

awarded by Ministry of Minority Affairs thereby causing much hardship and inconvenience to

the applicants for scholarship schemes of Ministry. Ministry has advised that the issue of

opening No Frill Account of the students of the minority community should, be reviewed in

SLBC meeting on regular basis and member Banks may be sensitized that a recurrence of

such instances should be avoided. Banks were advised to sensitize their branch functionaries

in this regard and ensure that no complaints are received.

Action:All Banks/LDMs

6.2 CREDIT FLOW TO WOMEN

Banks have disbursed `3766 Crore to 383686 Women Beneficiaries during the year 2010-11

up to Dec 2010. The outstanding level of Advances to Women Beneficiaries was `20679 Crore as of Dec 10 constituting 8.69% of total of advances.

6.3 KISAN CREDIT CARDKeeping in with the suggestions received from NABARD, SLBC has, vide letter No.42 dt

22.4.2010, advised all banks to work out practicable strategies and take steps for covering all

eligible farmers under KCC scheme. Further, a target of issuing 10 lac KCCs for the year

2010-11 has been communicated to major banks, RRBs and Co-op Banks. All Banks are

requested to take appropriate steps to achieve the target of covering all eligible farmers under

KCC scheme.

27

The Banks have issued 606310 KCC Cards during 2010-11 with credit limit of `4319.75 Crore. Agency-wise number of Cards issued is as under:

(`` in crore)

AgencyTarget for

2010-11 [Number of KCCs to be issued]

During the Year Up To Dec 10

Outstanding Balance- Dec 10

No.of cards Issued

Limit sanctioned

No. of cards Amount

Comm.Banks 375000 276693 2628.14 870120 7196.10

RRBs 400000 206609 1390.18 701634 3541.55

Cooperatives 225000 123008 301.43 1491500 4441.33

Total 1000000 606310 4319.75 3063254 15178.98

Ministry of Agriculture Govt of India has advised banks to launch a time bound campaign to

cover all eligible farmers under KCC. Government has also suggested to encourage formation

of JLGs/SHGs of farmers through NABARD and banking institutions for providing KCC’s to

financially excluded farmers particularly tenant farmers, oral lessees and farmers belonging to

weaker sections. They have advised SLBC to decide bank wise targets for number of

farmers/Accounts to be covered during 2011-12. It is estimated that there are about 60 lakh

eligible farmers in Karnataka. Out of which, 30 lakh farmers are covered and it is proposed to

cover 15 lakh farmers each during 2011-12 and 2012-13.

SLBC has prepared bank wise targets for the year 2011-12 and it was presented to the house.

Secretary, Finance (B&R) GOK, observed that the targets allotted to Co-operative institutions

is on higher side and co-operative institutions do not have resources to lend. It was suggested

that the additional targets may be allocated among commercial banks. It was decided to

reallocate the targets among banks.

Action: Banks/SLBC

AGENDA 7.0 SELF HELP GROUPS

Progress under SHG Bank Linkage as at Dec 2010 –

[` in Crore]Agency Target

28

New Repeat TotalCommercial Banks

40000 160000 200000RRBsCooperativesTotal 40000 160000 200000

Achievement as at Dec 2010 [`` in Crore]

Agency

DIRECTINDIRECT TOTALNEW REPEAT TOTAL

NO. AMT NO. AMT NO. AMT NO. AMT NO.[ 6+8]

AMT[ 7+9]

Com. Banks

20368

258.15

11740

240.39

32108

498.54

37432

248.59 69540 747.13

RRBs 7986 91.76 10878

157.18

18864

248.94 1966 9.66 20830 258.6

Co-opBanks 7492 50.75 1400

0174.1

92149

2224.9

4 0 0 21492 224.94

TOTAL 3584

6400.6

63661

8571.7

67246

4972.4

23939

8258.2

511186

21230.6

7

Outstanding position of advances to SHGs as at Dec 10:

Agency No. a/cs Amount (Crore)

Commercial Banks 261594 2164.19

RRBs 78188 553.01

Cooperatives 163377 1311.93

Total 503159 4029.13

LENDING THROUGH MFIs

OTHER ACTIVITIES OF AKMI

Summary of MFI's Portfolio Report as on 31st December 2010

Particulars A/c Amt. `In Cr.

No. of MFI 27  

Disbursements 180522 240.8

Outstanding 454852 3,128.42

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1) AKMI is conducting one seminar every year involving all MFIs, bankers,

Stakeholders, FKCC, Rotary and other organizations interested in Microfinance

2) AKMI is conducting programmes on financial literacy, training to Dist. Units,

blood donation camps and other types of health camps, distribution of notebooks

to students etc.

3) Organizes activities like community development and poverty alleviation Programmes

also.

AGENDA 8.0 STREE SHAKTI PROGRAMME

The progress under Stree Shakti Programme as furnished by the Women & Child

Development Department, Govt. of Karnataka, for Jan 2011 is as under:

No. of Stree Shakti Groups formed 130000

No. of groups maintaining accounts with banks 130000

Cumulative amount saved by the Group Members ` 919.23 Crore

No. of groups credit linked 120513

Loan disbursal by banks ` 1172.08 Crore

AGENDA 9.0 UDYOGINI, AASARE AND AMRUTHA SCHEME OF KARNATAKA STATE WOMEN’S DEVELOPMENT CORPORATION [KSWDC]

The Corporation has finalized the targets for the year 2010-11 under Udyogini, Asare and

Devadasi Rehabilitation Scheme, which have been communicated to the LDMs for

reallocation. Banks are requested to take steps to implement the schemes.

The Women Development Corporation may present the latest position to the house for

discussion.

AGENDA 10 IMPLEMENTATION OF SPECIAL SCHEMES

A] Agri-Clinics / Agri-Business

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As per the information received from Banks, during the current fiscal [2010-11], Commercial

Banks have financed 468 Clinics [`13.12 cr] up to Dec 10. Banks were requested to monitor

the implementation of the scheme at the ground level and ensure sanction of the proposals

received on merits, submit subsidy claims to NABARD in respect of eligible proposals.

B] Implementation of National Horticulture Board [NHB] Subsidy Scheme.For the year 2010-11, NHB has released subsidy in respect 331 proposals under the scheme

amounting to `349.73 lakh, which is approved by the State level committee.

AGENDA 11.0 - RECOVERY

11. A RECOVERY OF BANK DUES UNDER GOVERNMENT SPONSORED SCHEMES

The summary of scheme-wise Demand-Collection-Balance position as at Dec 2010 is

(Amount in ` crore )

SECTOR DEMAND COLLECTION BALANCE %-age of over dues to demand

P M R Y 175.71 62.15 113.56 64.63

SGSY Individuals 50.94 19.14 31.80 62.42Groups 58.49 44.00 14.49 24.77

SJSRY M E 29.34 12.95 16.39 55.87DWCUA 9.73 7.06 2.67 27.44

Nodal agencies [DIC, RDPRD/Zilla Panchayat, ULB (municipalities)] are requested to extend

assistance to banks for recovery of overdues in co-ordination with Banks.

11. B NON-PERFORMING ASSETS POSITION –

There were 532424 NPA a/cs involving an amount of `9698.76 crore as of Dec 10 accounting

for 4.07% of total advances. Farm sector account for 165236 a/cs with a balance of `2124.77 crore constituting 4.63% of advances to agriculture.

AGENDA 12 RECOVERY UNDER KPMR & KACOMP ACTS

As of Dec 10 25160 cases filed by Banks under RR Act were pending before Revenue

Authorities involving an amount of `123.17 Crore. The Banks have filed 1064 applications

during the current quarter involving loan amount of `2.88 Crore. There are 9489 cases

pending for more than 3 years for recovery under RR Acts.

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During 115th SLBC it was reported that Dy. Commissioners of Chickmagalur and Kodagu

districts are not accepting cases under RR Acs for recovery. Revenue Dept was requested to

advise district level authorities to expedite execution of Recovery Certificates for realizing the

dues. The Revenue Dept was requested to take steps in this regard.

Action: Revenue Department/GOK

AGENDA 13 APPOINTMENT OF RECOVERY TAHSILDARS IN THE DISTRICTS WITH LARGE AMOUNT OF BANK DUES:

The Under Secretary to Govt, Finance Department vide letter No.AE.21.2009 dt 13.7.2010

has informed as follows “Earlier the Districts with large amount of Bank dues to be recovered

as arrears of Land revenue used to have Recovery Tahasildars assisted by few staff. The

salary of the recovery unit was being met by the banks. It is advised to place this matter

before the SLBC to take a view whether the same arrangement can be revived.”

The matter was discussed during earlier SLBC meetings and based on the suggestion of Sub-

Committee on Recovery and Rehabilitation; it was decided in the previous SLBC meting to

select 4-5 districts having highest NPAs for appointment of special Tahasildars for recovery.

Based on the information furnished by LDMs, the following districts are having higher cases

pending under R R Act :

Sl.No Name of the District Cases Pending under RR ActNo of Accounts Amount [`in lakhs]

1 Belgaum 3055 5572 Bellary 1224 6783 Uttara Kannada 3760 4834 Bijapur 6904 4433

The house after deliberations accepted the suggestions for appointment of special

Tahasildars at Belgaum, Bellary, Bijapur and Uttar Kannada Districts. State Government was

requested to appoint special Tahasildars in these districts for recovery of loans under RR Act.

Action: GOK

AGENDA 14: IMPLEMENTATION OF COFFEE DEBT RELIEF PACKAGE – 2010

Bankers were advised to implement the Coffee Debt Relief Package-2010 as per the scheme

guidelines and advice of RBI. In order to implement the scheme successfully, meeting of

bankers was held on 11.02.2011 at SLBC office and on 15.02.2011 at Coffee Board. Further,

representations from various coffee growers associations were received regarding the

anomalies in implementation of the package. Hence, on the advise of Coffee Board, a meeting

of Bankers, RBI, officials of Coffee Board and representatives of coffee growers associations

32

was held on 26.2.2011. There was a face to face interaction with all the stakeholders,

anomalies/misconceptions in implementation of the package. It was decided in the meeting

that all the stakeholders will co-operate in successful implementation of the package.

Action: All Banks

AGENDA – 15 INTEREST SUBVENTION SCHEMES OF STATE GOVERNMENT

Govt of Karnataka is implementing various Interest subvention schemes for the benefit of

weaker sections. Complaints/representations are received from various sources that the

Branch Managers are not aware of the schemes and the schemes are not extended to eligible

beneficiaries. The following are important schemes where complaints are received regularly:

1. Interest Subsidy Scheme for Weavers.

2. Interest Subsidy Scheme for crop loans upto `50000/-.

3. Interest Subsidy Scheme for Fishermen.

4. One time subsidy scheme for Silk Reelers.

5. Interest Subsidy Scheme for Dairy and Sheep units.

6. Interest Subsidy Scheme for Silk Reelers.

During 114th and 115th SLBC meetings, Bankers were requested to sensitize branch personnel

about the scheme and implement the schemes successfully. However, representations are

still received from public. Hence, Banks were advised to pay special attention and submit

compliance that instructions have been issued to branches for implementation of the

schemes.

Representative of sericulture dept. informed that they have forwarded about 700 applications

of silk Reelers seeking loans to Banks in Chamarajanagar, Kolar, Mandya, Mysore and

Ramnagar Districts and Banks managers are not considering the applications under the

pretext of not receiving instructions from higher authorities. The officials of the department

were requested to submit bank wise pending cases to SLBC so that the issue can be pursued

with the concerned banks.

Action: All Banks

AGENDA – 16 SCHEME FOR FINANCING RAIN WATER HARVESTING STRUCTURES IN BBMP AREA.

During 112th and 115th SLBC, Bankers were requested to implement the above scheme.

Representations are also received from the public about lack of awareness at branch level

33

about the scheme. During last SLBC, Bankers were requested to popularize the scheme

among bankers and public. House was informed that Syndicate Bank has formulated a special

scheme by name syndvarshini to finance rain water harvesting structures. DGM, of SBM

informed the house that they are also having a scheme to finance rainwater harvesting

structures by name varshavahini. GM Canara Bank, also informed that they are also having

schemes to finance rainwater harvesting. Other banks were requested to formulate similar

scheme.

It was also suggested that GOK may provide capital and interest subsidy for the loans

extended by banks on the lines of incentives extended to solar and other schemes.

Action: All Banks/BWSSB/GOK

AGENDA – 17 INVITING LDMs to SLBC MEETINGS.

In the 115th SLBC meeting, proposal to invite LDMs to SLBC meetings to have direct feedback

from districts on operational issues was accepted and 8 LDMs are invited to this meeting.

They will be invited on rotation basis so that they attend meetings once in a year.

AGENDA 18 – INTRODUCTION OF CHIEF MINISTER’S EMPLOYEMENT GENERATION PROGRAMME [CMEGP]

We have been informed by Dept of Industries and Commerce, Govt of Karnataka that a new

scheme by name Chief Minister’s Employment Generation Programme called Bapuji

Swavalambana yojana is proposed to be implemented during 2011-12 on the lines of PMEGP

Scheme, considering huge demand from unemployed and educated youth.

Under the scheme, beneficiaries who undertake projects in rural industries will be eligible for

assistance upto project cost of `25.00 lakhs. Govt of Karnataka proposes to release margin

money of `50.00 crores under the scheme and banks are expected to sanction loans to the

tune of `150.00 crores. Extant guidelines of PMEGP will be followed while implementing

CMEGP. Govt of Karnataka has requested for the views of the bankers and consent of SLBC

for implementing the scheme.

The gist of the presentation made by the department and salient features of the scheme is

furnished below:

BAPUJI SWAVALAMBANA YOJANEChief Minister’s Employment Generation Programme

34

A scheme for generation of employment for rural and urban unemployed in Karnataka has

been announced by Ministry of SSI, Govt of Karnataka and Karnataka State Khadi and Village

Industries Board.

The objectives of the above scheme are :

To generate employment opportunities in rural and urban areas of the State through self

employment ventures/ projects / micro enterprises.

To bring together widely dispersed traditional artisans/ rural and urban unemployed youth

and give them self – employment opportunities to the extent possible, at their place.

Salient features of the scheme are :

- A new Scheme Sponsored by G.O.K on the lines of PMEGP scheme of Govt of India

with small changes.

- The B.S.Y scheme will be implemented in Backward areas only subject to the

modifications issued by G.O.K. from time to time. (Areas as specified in Dr. D.M.

Nanjundappa Committee report)

- Karnataka State Khadi & V.I.Board is the Nodal agency as well as Implementing agency

with the financial support of Nationalised /Private /Co-op Banks in the State of Karnataka.

- Empowering entrepreneurs through Skill Development and entrepreneurial development

programme (EDP)

District Task Force (DTFC) 1. Chief Executive officer- Zilla Panchayat : Chairman (As CEO-ZP is holding Monthly/Quarterly Bankers meeting in the District)

2. Lead Bank Manager : Member

3. Representatives from Panchayats (Two Members) : Member (To be Nominated by Chairman, DTFC by rotation every year) 4. Nominated One Non-official Member of KVIB to each District : Member by GOK or Nominated by Hon’ble Chairman, KVIB if the post is vacant.

5. Representative from DIC : Member

6. Representative of NYKS/SC/ST Corporation : Spl .Invitee

7. Representative of MSME-DI/ITI/Polytechnic : Spl. Invitee35

8. District Officer , KVIB : Convener

If an Entrepreneur desires to extend/ to modernize/ to upgrade technically the existing working

unit, provision will be made for further financial assistance within the maximum limit of `25.00

lakhs under BSY scheme which is applicable only to BSY units. (Difference of financial

assistance already availed & the balance to be availed subject to the Max. limit of `25.00

lakhs)

Eg:- If a beneficiary already availed the Financial assistance of `5.00 lakhs under BSY

scheme & the unit is working in good condition, he is eligible to avail the balance financial

assistance upto `20.00 lakhs to yield higher production/service activity.

The house accepted the scheme for implementation through banks.

Action: Banks/GOK

AGENDA 20 – PROTEST BY RAITHA SANGHA AGAINST COERCIVE METHODS ADOPTED BY BANKS WHILE SEIZING TRACTORS.

The house was informed that the LDM Mandya and Regional office of SBI Bangalore, have

reported that farmers associations/units are protesting/obstructing seizure of tractors etc.

Similar instances of agitation by farmers and obstructing functioning of branches were

reported earlier also. In view of the above, the State Government was requested to provide

necessary protection to bankers.

Action:GOK

AGENDA 21 – NABARD AGENDA ITEMS

The following agenda items of NABARD were placed before the house. LDMs and Bankers

were requested to take note of the same for implementation.

1. Ground level credit disbursement by Commercial Banks 2. Credit off take in Watershed areas.

3. Non receipt of LBR-2 from LDMs

4. Government of India Schemes

4 (a) Centrally sponsored scheme for financing Agri clinics and Agribusiness Centers4(b) Centrally sponsored Schemes under Animal Husbandry Sector

36

4(c). Centrally sponsored Scheme on Artificial Recharge of Dugwells in Hard Rock Areas4(d). Furnishing of Utilisation Certificates in respect of subsidy released under Central Sector Schemes.5. Waiver of Stamp Duty on documents executed in connection with JLG loans

6. Annexure – LBR 2 defaulters

Action: Banks/LDMs/GOK

The meeting concluded with Vote of thanks proposed by Sri. Ravi Chatterjee, Executive

Director, SyndicateBank.

37