Annual report inside final - 20-6-13
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ANNUAL REPORT th 50 NAFSCOB
Transcript of Annual report inside final - 20-6-13
ANNUAL REPORT
th50
NAFSCOB
NAFSCOB
ANNUAL REPORT
th50
BOARD OF DIRECTORS OF NAFSCOBAs on 31-03-2013
Sr. NAME OF THE BOARD OF NAME OF THE SCBNo. DIRECTORS
1 Dr.Bijender Singh, MLA PresidentChairman, NAFSCOB Delhi State Cooperative Bank Ltd., 31 Netaji Subhash Marg, Daryaganj, New Delhi -110 002.
2 Shri Bhagat Singh ChairmanVice-Chairman, NAFSCOB Andaman & Nicobar State Cooperative Bank Ltd., 98 Maulana Azad Road, Port Blair – 744 101.
3 Shri Gautam Bora Chairman Vice-Chairman, NAFSCOB Assam Cooperative Apex Bank Ltd., Apex Bank Building, Hem Barua Path, Pan Bazar,
Guwahati – 781 001.
4 Shri Ramesh Chandra Chaubey ChairmanBihar State Cooperative Bank Ltd., Ashok Rajpath, Patna - 800 004.
5 Shri Ulhas B. Phal Dessai ChairmanVice-Chairman, NAFSCOB Goa State Cooperative Bank Ltd., H.O. “Sahakar Sankul”, Patto Plaza, Panaji - 403 001.
6 Shri Dileep Sanghani DirectorGujarat State Cooperative Bank Ltd., Sahakar Bhavan, Tilak Road, Ahmedabad - 380 001.
7 Shri Naresh Chaudhry Managing Director
Haryana State Cooperative apex Bank Ltd., S.C.O. No.78-80, Bank Square, Sector 17-B, Chandigarh - 160 017.
8 Shri Harsh Mahajan ChairmanndHimachal Pradesh State Cooperative Bank Ltd., No.1 Bank Building, 2 Floor, The Mall,
Shimla - 171 001.
9 Shri R.M. Manjunatha Gowda PresidentKarnataka State Cooperative Apex Bank Ltd., “UTHUNGA”, No.1 Pampa, Mahakavi Road, Chamrajpeth, Bangalore - 560 018.
10 Shri Pramod Karnad Managing DirectorMaharashtra State Cooperative Bank Ltd., 9 Maharashtra Chamber of Commerce Lane, Fort, Mumbai - 400 023.
11 Shri Bhanwar Singh Shekhawat ChairmanVice-Chairman, NAFSCOB Madhya Pradesh Rajya Sahakari Bank Maryadit, Multistoryed Building, T. T. Nagar,
New Market, Bhopal - 462 003.
12 Shri W.K. Kyndiah ChairmanMeghalaya Cooperative Apex Bank Ltd., Apex Bank Building, M.G.Road, Shillong -793 001.
13 Shri Avtar Singh Zira ChairmanVice-Chairman, NAFSCOB Punjab State Cooperative Bank Ltd., SCO No. 175-187, Sector – 34-A, Chandigarh – 160 022.
14 Smt. Leela Maderana ChairpersonRajasthan State Cooperative Bank Ltd., DC-1, Lalkothi Shopping Centre, Opp. Nehru Balodyan, Tonk Road, Jaipur – 302 015.
15 Shri L.M. Lepcha, MLA ChairmanSikkim State Cooperative Bank Ltd., National Highway No.31-A, Near Zero Point, Gangtok - 737 101.
16 Thiru M.P. Sivan Arul AdministratorTamil Nadu State Apex Cooperative Bank Ltd, 4, N.S.C.Bose Road, Chennai – 600 001.
17 Shri B. Subrahmanyam Managing DirectorEx-Officio Member National Federation of State Cooperative Banks Ltd., J.K. Chambers, Fifth Floor,
Sector-17, Vashi, Navi Mumbai - 400 703.
Note: There are 05 (Five) vacant position of Directors.
NAFSCOB
NATIONAL FEDERATION OF STATECOOPERATIVE BANKS LTD.
J. K. Chambers, Fifth Floor, Plot No. 76, Sector - 17, Vashi, Navi Mumbai - 400 703, India.Tel. : (91) 22-2789 2741, 2789 2697, 2789 2738,Fax : (91) 22-2789 2604
NAFSCOB
NAFSCOB/A-9(xxiv)/2013-14/153 Date: 28-06-2013
The Members of the General Body of NAFSCOB
NOTICE
Notice is hereby given that the Fiftieth Annual General Meeting of the National Federation of State Cooperative thBanks Ltd. (NAFSCOB), Navi Mumbai will be held at 4.30 P.M. (1630 Hrs.) on Friday the 26 July 2013 at Jubilee Hall,
Public Gardens, Hyderabad, Andhra Pradesh to transact the following business:
th th1. To confirm the Proceedings of the 49 Annual General Meeting of NAFSCOB held on 27 July, 2012 at Bhubaneswar,
Odisha.
2. To confirm the Proceedings of the Special General Body Meeting of the NAFSCOB held on 26-04-2013 at Guwahati,
Assam.
3. To consider and approve the Auditors' Report and Auditors' Statement of Accounts of NAFSCOB for the year 2012-
2013 and also the Compliance on the Observations made by the Auditors.
4. To consider and adopt the Fiftieth Annual Report of NAFSCOB for the year 2012-2013.
5. To review the work of NAFSCOB and to formulate the programme of activities for the year 2013-2014.
6. To consider and approve the Annual Budget of Income and Expenditure for the year 2013-2014.
7. To appoint Auditors for the Statutory Audit of Accounts of NAFSCOB for the year 2013-2014 and fix their
remuneration.
8. To conduct elections for the vacant position of Directors on the Board of NAFSCOB.
9. Any other item with the permission of the Chair.
In case there is no quorum till 1630 hours, the meeting will stand adjourned and the adjourned meeting will be
held at 1700 hours to transact the business on the agenda of the original General Body Meeting Notice at the same place
and on the same day whether there is a quorum or not.
By Order of the Board/Chairman
(B. SUBRAHMANYAM)
MANAGING DIRECTOR
Sr. No. State Cooperative Banks
President / Chairman / Chairperson / Special Officer / Administrator
Chief Executive
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Andaman & Nicobar SCB, Port Blair Shri Bhagat Singh* Shri Ravinder Rao
Andhra Pradesh SCB, Hyderabad Shri K. Veera Reddy Shri M. S. Rama Rao
Arunachal Pradesh SCB, Naharlagun Shri Onik Paniyang, IAS Shri Tsering Thongdok
Assam SCB, Guwahati Shri Gautam Bora* Shri K. N Talukdar
Bihar SCB, Patna Shri Ramesh Chandra Chaubey* Shri P. K. Sinha
Chandigarh SCB, Chandigarh Shri Kamal K. Sharma Shri Harnek Singh
Chhattisgarh SCB, Raipur Shri Mahavir Singh Rathore Shri C. Panna
Delhi SCB, New Delhi Dr. Bijender Singh, MLA* Shri R.S. Dahiya
Goa SCB, Panaji Shri Ulhas B. Phal Dessai* Shri Sadanand N. Borkar (i/c)
Gujarat SCB, Ahmedabad Shri Ajaybhai H. Patel -
Haryana SCB, Chandigarh Ms. Shakuntla Jakhu, IAS Shri Naresh Chaudhry*
Himachal Pradesh SCB, Shimla Shri Harsh Mahajan* Shri Madan Chauhan, HAS
Jammu & Kashmir SCB, Srinagar Shri M. S Dar Shri Mohd. Ashraf Bhat
Karnataka SCB, Bangalore Shri R.M. Manjunatha Gowda* Shri R. K. Raju, IAS
Kerala SCB, Thiruvananthapuram Dr. V. M. Gopala Menon IAS** Shri S. Raveendran, IAS (Retd.)
Madhya Pradesh SCB, Bhopal Shri Bhanwar Singh Shekhawat* Shri R. B. Vatti
Maharashtra SCB, Mumbai Shri. V. K. Aggarwal, IAS (Retd.) Shri Pramod Karnad*
Manipur SCB, Imphal Shri Kh. Khamba Singh Shri M. Lakshmikumar Singh, IAS
Meghalaya SCB, Shillong Shri. W. K. Kyndiah* Shri D.F. War
Mizoram SCB, Aizwal Shri J.C. Chawangvawra Shri Ropiangliana
Nagaland SCB, Dimapur Shri Toshi Aier, IAS Shri B.K. Thadani
Orissa SCB, Bhubaneshwar Shri Bishnupada Sethy, IAS Shri Tusarkanti Panda
Pondicherry SCB, Pondicherry Thiru G. Ragesh Chandra, IAS Thiru D. Balakirouchenin
Punjab SCB, Chandigarh Shri Avtar Singh Zira* Shri K. S. Sangha
Rajasthan SCB, Jaipur Smt. Leela Maderana* Shri R. K. Puri
Sikkim SCB, Gangtok Shri M. G. Kiran, IAS —
Tamil Nadu SCB, Chennai Thiru M. P. Sivan Arul* —
Tripura SCB, Agartala Shri Haripada Chakraborty Shri Swapan Kumar Saha
Uttar Pradesh SCB, Lucknow Shri Fateh Bhahdur Singh Shri S. C. Dwivedi
Uttarakhand SCB, Haldwani Shri Sanjeev Arya Shri R.P. Sharma
West Bengal SCB, Kolkata Shri Kumar Rabindranath Shri Nitai Karjee
* Board of Directors, **appointed as part time administrator by State Government of Kerala.
CHAIRMEN & CHIEF EXECUTIVES OF
MEMBER STATE COOPERATIVE BANKSST(AS ON 31 MARCH, 2013)
FIFTIETH ANNUAL REPORT
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NATIONAL FEDERATION OFSTATE COOPERATIVE BANKS LTD., NAVI MUMBAI
CONTENTS
th50 ANNUAL REPORT – 2012 – 2013
SR.NO. PARTICULARS PAGE NO.
1. Introduction ..............................................................................................................1
2. Economic Environment...............................................................................................1-2
3. Agricultural Production from 2009-10 to 2012-13 ...............................................................2-3
4. Union Budget for the year 2013 – 2014 ..............................................................................4
5. Government of India – Initiatives for Short Term Cooperative Credit and Banking
Sector......................................................................................................................8
6. Reserve Bank of India (RBI) – Policy and other initiatives for Short Term Cooperative
Credit and Banking Sector – 2012-13 ...............................................................................13
7. National Bank for Agriculture and Rural Development (NABARD) - Policy and other initiatives for Short
Term Cooperative Credit and Banking Sector - 2012-13.........................................................29
8. Progress and Performance of Short Term Cooperative Credit Institutions....................................34
9. National Federation of State Cooperative Banks (NAFSCOB)....................................................37
10 All India Mutual Arrangement Scheme (AIMAS), NAFSCOB.......................................................59
11. Planning, Research and Development (PRD) Cell, NAFSCOB.....................................................61
12. Conferences, Seminars, Workshops and Meetings by NAFSCOB.................................................62
13. NAFSCOB Journal of Rural Cooperative Credit and Banking.....................................................63
14. Computerisation in NAFSCOB.........................................................................................65
15. Representation and Participation by NAFSCOB....................................................................66
16. Accounts and Finance of NAFSCOB..................................................................................70
17. Acknowledgements.....................................................................................................73
Appendices.............................................................................................................74
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Sr. No. Details
Appendix – 1 Agricultural Production – At a Glance –2009-10 to 2012-13.............................................................75
Appendix – 2 Status of Bank Rate since 1935..............................................................................................76
Appendix – 3 Status of CRR – Since July 1935..............................................................................................77
Appendix – 4 State-wise sanctions and utilisation of Credit Limits to S.T.(SAO), ST-Weavers, MT (Conversion) during the year 2012-13.......................................................................................................81
Appendix – 5 Cooperative Development Fund – Assistance sanctioned to Cooperative Credit Institutions as on 31.03.2013......................................................................................................................82
Appendix – 6 Cooperative Development Fund – Assistance disbursed to Cooperative Credit Institutions as on 31.03.2013......................................................................................................................83
Appendix – 7 Cooperative Development Fund – Purpose-wise sanctions and disbursements as on 31.03.2013.................84
Appendix – 8 Kisan Credit Card - Progress -2012-13......................................................................................85
Appendix – 9 Kisan Credit Card – Agency-wise cumulative Progress since inception – 2012-13....................................86
Appendix – 10 Performance of SCBs during 2011-12 vis-à-vis 2010-11 – Statistical Presentation ...................................87
Appendix – 10A SCBs - Performance at a Glance during 2011-12 vis-à-vis 2010-11(Membership) – Graphic Presentation.......................................................................................................88
Appendix – 10B SCBs - Performance at a Glance during 2011-12 and 2010-11(Key Performance Parameters) – Graphic Presentation..................................................................89
Appendix – 10C SCBs - Performance at a Glance during 2011-12 and 2010-11(Key Performance Parameters) – Graphic Presentation..................................................................90
Appendix – 11 Performance of DCCBs during 2011-12 vis-à-vis 2010-11– Statistical Presentation..................................91
Appendix – 11A DCCBs - Performance at a Glance during 2011-12 vis-à-vis 2010-11(Membership) – Graphic Presentation.......................................................................................................92
Appendix – 11B DCCBs - Performance at a Glance during 2011-12 and 2010-11(Key Performance Parameters) – Graphic Presentation..................................................................93
Appendix – 11C DCCBs - Performance at a Glance during 2011-12 and 2010-11(Key Performance Parameters) – Graphic Presentation..................................................................94
Appendix – 12 Performance of PACS during 2011-12 vis-à-vis 2010-11–Statistical Presentation....................................95
Appendix – 12A PACS - Performance at a Glance during 2011-12 vis-à-vis 2010-11(Membership) – Graphic Presentation..........................................................................................................96
Appendix – 12B PACS - Performance at a Glance during 2011-12 and 2010-11(Key Performance Parameters) – Graphic Presentation..................................................................97
Appendix – 12C PACS - Performance at a Glance during 2011-12 and 2010-11(Key Performance Parameters) – Graphic Presentation..................................................................98
Appendix – 13 Grant-in-Aid from the Ministry of Agriculture, Govt. of India to NAFSCOB...........................................99
Appendix – 14 Managing Director and Officers of NAFSCOB (as on 31.03.2013)................................................ ....101
LIST OF A P P E N D I C E S
FIFTIETH ANNUAL REPORT
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NATIONAL FEDERATION OF STATE COOPERATIVE BANKS LTD., NAVI MUMBAI
FIFTIETH ANNUAL REPORT2012 – 2013
1. Introduction:
National Federation of State Cooperative Banks Ltd. (NAFSCOB) presents Fiftieth Annual Report for the year
2012-13 with a brief on overall economic environment of the country including agriculture, banking, monetary
policy with particular reference to cooperative credit and banking sector, important developments in the short
term rural cooperative credit delivery structure and the activities undertaken and performance of NAFSCOB from
April 1, 2012 to March 31, 2013.
2. Economic Environment:
thEconomic Survey – 2012-13' was placed in the Parliament on 27 February, 2013. The first Economic Survey was
presented for the financial year 1950-51. The website of Ministry of Finance has documents of Surveys from 1957-
58 onwards. Up to 1964, Economic Survey was circulated along with Budget documents, but from 1964, the same
is being circulated prior to the presentation of the Budget. The document of Economic Survey is a yearly report of
the economic environment during the year, analyses important economic, financial and social development
through the year and it serves as backdrop for the Budget. The Economic Survey indicated that falling savings
without a commensurate fall in aggregate investment have led to a widening Current Account Deficit (CAD)
during 2012-13. India found food inflation as major challenge during previous year. High interest rates as well as
policy constraints adversely impacted investment. Accordingly, the growth rate of Indian Economy was
decelerated to 5.0 per cent during 2012-13. The Indian economy is projected to grow by 6.1 per cent to 6.7 per
cent in 2013-14. During 2009-10, 2010-11 and 2011-12, the growth rate of Gross Domestic Product (GDP) was 8.6
per cent, 9.3 per cent and 6.2 per cent respectively. During 2012-13, the growth in agriculture sector has also
been weak due to lower than normal rainfall in months of June and July. Further, the growth of the service sector
also declined to 6.6 per cent in 2012-13. Between 2003-04 and 2012-13, contribution of service sector, industry
and agriculture sector in overall growth of the economy were 65 per cent, 27 per cent and 8 per cent respectively.
Though, Wholesale Price Index (WPI) inflation coming down in recent months, the food inflation continues to be
higher than overall inflation after brief slowdown.
Monetary policy of the Reserve Bank of India (RBI) focussed mainly on twin objectives of containing inflation and
facilitating growth. There was a moderation in inflation from its peak of 10.9 per cent in April 2010, to an average
of 7.6 per cent during April-December 2012. However, tight monetary policy in face of persistent inflationary
pressures and risk from external as well as domestic sources had contributed to a sharper slowdown of the
economy than anticipated. Since October 2011, there has been a shift in RBI's policy stance wherein it has
attempted to balance growth and inflation dynamics. In April, 2012 and January, 2013 RBI reduced repo rates by
50 and 25 basis points respectively. Further, RBI reduced the Cash Reserve Ratio (CRR) and Statutory Liquidity
Ratio (SLR) to improve liquidity conditions.
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As reported by Economic Survey, agriculture has been a way of life and continues to be the single most important
livelihood of the masses. Agricultural policy focus in India across decades has been on self-sufficiency and self-
reliance in food grains production. Considerable progress has been made on this front. Food grains production
rose from 52 million tonnes in 1951-52 to 259.32 million tonnes in 2011-12. The share of agriculture in real GDP has
fallen given its lower growth rate relative to industry and services. However, what is of concern is that growth in
the agricultural sector has quite often fallen short of the Plan targets. During the period 1960-61 to 2010-11 food
grains production grew at a Compounded Annual Growth Rate (CAGR) of around 2 per cent. The CAGR of food
grains during 2006-07 to 2011-12 was 3.5 per cent, but during the year 2011-12 to 2012-13 the same was negative
(-5.0 per cent). Average annual growth of the agriculture and allied sector during the Eleventh Five year Plan at
3.6 per cent fell short of the 4 per cent growth target. However, this has been much higher than the average
annual growth of 2.5 and 2.4 per cent achieved during the Ninth and Tenth Plans, respectively.
stAgriculture including allied activities, accounted for 14.1 per cent (1 revision) of GDP at 2004-05 prices, in 2011-
12 as compared to 14.5 per cent in 2010-11. Notwithstanding the declining trend in share of agriculture in the
GDP, it is critical from the income distribution perspective as it accounted for about 55 per cent employment in
the country according to Census 2011. Hence growth in agriculture and allied sectors remains a 'necessary
condition' for inclusive growth. In terms of composition in GDP during 2011-12, agriculture alone accounted for
12.0 per cent followed by forestry and logging at 1.4 per cent and fishing at 0.7 per cent of GDP. Reasonable
growth in agriculture is important both from the nutritional point of view as well as to control food prices and
overall headline inflation.
Agriculture and allied sectors recorded slightly lower average growth than targeted in the Eleventh Plan period
due to severe drought experienced in most parts of the country during 2009-10 and drought/deficient rainfall in
some states such as Bihar, Jharkhand, Eastern Uttar Pradesh and West Bengal in 2010-11. However, timely and
corrective measures taken by the government helped boost agricultural production and growth in agriculture and
allied sectors reached 7.0 per cent in 2010-11, the highest growth rate achieved during the last six years. In 2012-
13 agriculture and allied sectors are estimated to achieve a growth rate of 1.8 per cent. However a matter of
great concern is the fact that agricultural growth is still, to an extent, characterized by fluctuations due to the
vagaries of nature. India has entered a 'critical decade' of economic development. The Indian economy has
emerged as a large and systemically important economy on the global stage. It enjoys the unique advantage of
having many economic indicators in its favour, particularly a large domestic market, robust investment-to-GDP
ratio, and demographic advantage.
3. Agricultural Production from 2009-10 to 2012-13:
Reasonable growth in agriculture is important both from the nutritional point of view as well as to control food thprices and overall headline inflation. During 11 Five year Plan, an average annual growth of 3.6% was registered
against the targeted of 4% growth in agriculture and allied sectors mainly due to severe drought experienced in
most parts of the country during 2009-10 and drought/deficient rainfall in some states.
For five consecutive years, from 2004-05 to 2008-09, food grains production recorded an increasing trend.
However, it declined to 218.11 million tonnes in 2009-10 due to severe drought conditions in various parts of the
country. Normal monsoon in the subsequent years, 2010-11 & 2011-12, helped the country to reach a significantly
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higher level of 244.78 & 259.32 million tonnes of food grains production respectively. As per the second Advance
Estimates, production of food grains during 2012-13 is estimated at 250.14 million tonnes which is a significant
achievement mainly due to increase in the production of rice and wheat. The productivity of almost all the crops
suffered considerably, which led to decline in their production in 2009. As at the end of March, 2012, production
of food grains during 2011-12 increased considerably to 259.32 million tonnes compared to 234.47 million tonnes
during the year 2008-09, 218.11 million tonnes during the year 2009-10 and 244.49 million tonnes during the year
2010-11. Thanks mainly due to number of corrective measures initiated by various stakeholders. Details of
'Agricultural Production – 2009-10 to 2012-13' (Food grains, Oil Seeds and Other Commercial Crops from 2009-10 ndto 2012-13) (2 Advance Estimates) as provided by the Ministry of Agriculture, Government of India is given in
Appendix -1.
3.1. Major Schemes for the Agricultural Sector:
While emphasising the need for giving impetus and due thrust to all other inputs such as irrigation, fertilizer,
seeds etc., the Government of India has proposed to enhance the target for agriculture credit to farmers. The
target for agriculture credit has been increased from 4,75,000 crore in 2011-12 to 5,75,000 crore in
2012-13 to 7 lakh crores during 2013-14.
The Rashtriya Krishi Vikas Yojana (RKVY) was launched in 2007-08 with an outlay of 25,000 crore in the Eleventh
Plan for incentivizing states to enhance public investment. States were provided 22,408.79 crore under the
RKVY during Eleventh Five Year Plan. The RKVY format permits taking up national priorities as sub-schemes,
allowing the states flexibility in project selection and implementation. Allocation under the RKVY for 2012-13
was 9217 crore. The RKVY links 50 per cent of central assistance to those states that have stepped up the
percentage of state plan expenditure on the agriculture and allied sector. A total of 5768 projects were taken up
by states in the Eleventh Plan of which 3343 had been completed till December end 2012.
Similarly, the scheme of Interest Subvention has been further extended for the year 2012-13. The incentive for
prompt repayment of loans was retained @ 3%. However the Interest Subvention to banking institutions has been
reduced to 2%, contrary to expectations, causing further losses to the banking institutions for involvement of
their own funds in agricultural lending programmes. The annual budget of Government of India for the year 2013-
14 announced continuation of Interest subvention scheme for short-term crop loans and the same is extended for
crop loans borrowed from private sector Scheduled Commercial Banks also. But the exact quantum of Interest
subvention to the banking institutions has not been made known. The effective rate of interest for farmers who
promptly repay their crop loans during 2012-13 will be 4 per cent per annum. We welcome the continuation of
Interest Subvention Scheme as well as covering crop loans borrowed from private sector Scheduled Commercial
Banks under Scheme.
The Kisan Credit Card (KCC) scheme has been effective for extending agriculture credit. The scheme includes
reasonable components of consumption credit and investment credit within the overall credit limit to provide
adequate and timely credit support to farmers for their cultivation needs. A revised KCC scheme was introduced
in March 2012 in which the KCC passbook has been replaced by an ATM-cum-debit card to all eligible and willing
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as on 31 August 2012 was 4.07 crore. The number of cumulative KCCs issued by commercial banks as on 31 March
2012 was 5.47 crore. In order to discourage distress sale by farmers and to encourage them to store their produce
in warehouses against warehouse receipts, the benefit of interest subvention has been extended to small and
marginal farmers having KCCs for a further period of up to six months post-harvest on the same rate as crop loans.
The government is implementing a revival package for Short-term Rural Cooperative Credit Structure involving a
financial outlay of 13,596 crore. Twenty-five state governments have signed memorandums of understanding
(MoU) with the GoI and the National Bank for Agriculture and Rural Development (NABARD). As of September
2012, 9002.11 crore had been released by NABARD as the GoI share for recapitalization of 53,202 primary
agriculture cooperative societies (PACS) in seventeen states.
The Agriculture Insurance Company of India Ltd. implements the National Agricultural Insurance Scheme (NAIS).
At present, the scheme is being implemented by 24 states and two UTs. Since inception, claims of about 24,246
crore have been paid against premium income of about 7580 crore benefiting about 511 lakh farmers.
To sum up, agriculture and allied sectors as reported by Economic Survey has made substantial progress in terms
of production and productivity since the beginning of the Planning process. The successive Five Year Plans have
emphasized growth in the agriculture sector, as a result of which food grains' production estimated to reach a
level of 250.14 million tonnes in 2012-13. Agricultural growth in the current Five Year Plan is expected to be less
than the target. In order to make 4 per cent agricultural growth a reality, adequate efforts are required to focus
on addressing the challenges in this sector. The area under food grains has declined in the last three decades, but
in 2010-11 and 2011-12 the area under food grains recorded little increase. In yield parameters, India is lagging
behind global levels in most crops. With very little growth in area and marginal growth in yields of many crops
during the last decade, increasing agricultural production remains a challenge. A holistic approach, spanning
agricultural R&D, dissemination of technology, and provision of agricultural inputs such as quality seed,
fertilizers, pesticides, and irrigation, would help achieve higher levels of productivity. Access of small and
marginal farmers to formal sources of agricultural credit is still inadequate, though the flow of agricultural credit
has increased in the recent past. Effective coordination and monitoring of on-going agriculture and allied sectors
programmes are being planned to ensure optimum results. Sincere efforts are being made to address crucial
challenges with a view to rejuvenate agriculture sector and bring about inclusive growth in the economy.
4. Union Budget for the year 2013 – 2014:
The Finance Minister Shri P. Chidambaram presented the Union Budget for the year 2013-14 in the Lok Sabha on
th28 February, 2013.
farmers in a time-bound manner. The number of operative KCCs issued by cooperative and Regional Rural Banks
FIFTIETH ANNUAL REPORT
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4.1. Budget Estimates - 2013-14:
i. Gross Tax Receipts estimated at 12,35,870 crore.
ii. Net Tax to Centre estimated at 8,84,078 crore.
iii. Non-tax Revenue Receipts estimated at 1,72,252 crore.
iv. Total expenditure for 2013-14 budgeted at 16,65,297 crore.
v. Plan expenditure for 2013-14 at 5,55,322 crore is 6 per cent higher than 2012-13 budget estimates.
vi. Non-plan expenditure estimated at 11,09,975 crore.
vii. Fiscal deficit at 5.2 per cent of GDP in 2012-13 revised estimates.
viii. Fiscal deficit at 4.8 per cent of GDP in 2013-14 budget estimates.
ix. Effective Revenue Deficit to be 1.8 per cent of GDP in 2013-14.
4.2. Highlights of the Union Budget, 2013-14 :
Some of the highlights pertaining to Agriculture, Agricultural Credit, RIDF, etc. are presented below:
lIt is proposed to allocate 27,049 crore to the Ministry of Agriculture, an increase of 22 per cent over the revised
estimate of the current year. Of this, agricultural research will be provided 3,415 crore.
lThe target of 5,75,000 crore fixed for 2012-13 is expected to be exceeded. Therefore, it is proposed to increase
the target of agricultural credit to 7,00,000 crore for the year 2013-14.
lThe interest subvention scheme for short term crop loans will be continued and a farmer who repays the loan on
time will be able to get credit at 4 per cent per annum. The interest subvention scheme so has been applied to
loans extended by public sector banks, RRBs and cooperative banks. It is now proposed to extend the scheme to
crop loans borrowed from private sector scheduled commercial banks in respect of loans given within the
service area of the branch concerned.
lAssam, Bihar, Chhattisgarh and West Bengal in Eastern India have increased their contribution to rice production.
Therefore, it is proposed to continue the support the eastern Indian States with an allocation of 1,000 crore in
2013-14, aimed at bringing the Green Revolution.
lFarmer Producer Organisations (FPO), including Farmer Producer Companies (FPC), have emerged as aggregators
of farm produce and link farmers directly to markets. To signal support to them, it is intended to provide
matching equity grants to registered FPOs upto a maximum of 10 lakh per FPO to enable them to leverage
working capital from financial institutions. Therefore, it is proposed to provide 50 crore for this purpose.
Besides, a Credit Guarantee Fund will also be created in the Small Farmers' Agri Business Corporation with an
initial corpus of 100 crore. State Governments have also been urged to support such FPOs through necessary
amendments to the APMC Act and in other ways.
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lIt is proposed to raise the corpus of RIDF-XIX in 2013-14 to 20,000 crore to be operated by NABARD.
lPursuant to the announcement made last year, a sum of Rs.5,000 crore will be made available to NABARD to
finance construction of warehouses, godowns, silos and cold storage units designed to store agricultural produce,
both in the public and the private sectors. This window will also finance, through the State Governments,
construction of godowns by panchayats to enable farmers to store their produce.
lIt is proposed to provide Rs.50 crore in 2013-14 for the proposed new scheme with an outlay of 500 crore called thIntegrated Processing Development Scheme, to be implemented in the 12 Plan to address the environmental
concerns of the textile industry.
lIt is proposed to provide for working capital and term loans at a concessional interest of 6 per cent to the
handloom weavers and it is expected to benefit 1,50,000 individual weavers and 1,800 primary cooperative
societies in 2013-14. Therefore, it is proposed to allocate an additional sum of 96 crore in 2013-14 to the
Ministry of Textiles for interest subvention.
lThe Financial Sector Legislative Reforms Commission (FSLRC) was constituted by Government of India in 2011.
The commission submitted its report to ministry of finance in March, 2013. The Final Report is available in Finance
Ministry website (www.finmin.nic.in). The intention of the Government is to examine the recommendations and
act quickly and decisively so that financial sector stands on sound legal foundations and remains well-regulated,
efficient and internationally competitive. Therefore, it is proposed to constitute a Standing Council of Experts in
the Ministry of Finance to analyse the international competitiveness of the Indian financial sector, periodically
examine the transaction costs of doing business in the Indian market and provide inputs to Government for
necessary action.
lFinance Minister is of the view that the public sector banks are well regulated and they must also be adequately
capitalized. Government shall provide 12,517 crore to infuse additional capital into 13 public sector banks.
In 2013-14, it is proposed to provide further an amount of 14,000 crore for capital infusion to ensure compliance
of Basel III regulations by public sector banks.
lIt is proposed to set up India's first women's Bank on a public sector bank, with a provision for .1000 crore as initial
capital.
lAccording to Union Finance Minister, Financial Inclusion has made rapid strides. All scheduled commercial banks
and all RRBs are on core banking solution (CBS) and on the electronic payment systems (NEFT and RTGS). It has
been reported that Government of India is working with RBI and NABARD to bring all other banks, including some
cooperative banks, on CBS and e-payment systems by 31-12-2013. All the branches of public sector banks, it
has been assured, will have an ATM in place by 31-03-2014.
lIt is proposed to provide 6,000 crore to the Rural Housing Fund in 2013-14. It is further proposed to ask National
Housing Bank to set up the Urban Housing Fund and, in consultation with RBI, it is proposed to provide 2,000
crore to the Fund in 2013-14.
FIFTIETH ANNUAL REPORT
7
Year Target Achievement
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
1, 41,500 (34.76%)
1,75,000 (23.67%)
2,25,000 (28.57%)
2,80,000 (24.44%)
3,25,000 (16.07%)
3,75,000 (15.38%)
4,75,000 (26.66%)
5,75,000 (21.05%)
7,00,000 (21.74)
1,80,486 (44.03%)
2,29,401 (27.10%)
2,50,000 (8.98%)
3,01,908 (20.76%)
3,66,919 (21.53%)
4,46,779 (21.76%)
2,94,023* (-34.19)
2,39,629**(-18.50)
-------
lIt is proposed to raise the corpus of RIDF-XIX in 2013-14 to 20,000 crore to be operated by NABARD.
lKYC of banks will be sufficient to acquire insurance policies.
lBanks will be permitted to act as insurance brokers so that the entire network of bank branches will be utilized to
increase penetration.
lBanking correspondents will be allowed to sell micro-insurance products.
lGovernment has initiated an IT driven project to modernize the postal network at a cost of 4 ,909 crore.
Post offices will become part of the core banking solution and offer real time banking services. Therefore, it is
proposed to provide 532 crore for the project in 2013-14.
lThe issue of restoration of Income Tax exemption for cooperative banks under Section 80(P) of Income Tax Act,
1961 is untouched in the present budget proposal.
As part of the strategy of Government of India to ensure agriculture growth, it is proposed to raise the target for
agriculture credit in 2013-14 to 7,00,000 crore from 5,75,000 crore during the year 2012-13.
a) Flow of Agricultural Credit:
The plan target and actual flow of agriculture credit during the last five years i.e. the year 2007-08 to
2012-13 and the target for the year 2013-14 is given below.
(Rupees in crores)
Note: Figures in parentheses indicate percentage change over previous year. * up to November 2011,
** up to September 2012.
Source: Budget documents & Economic Surveys of GoI (2005-06 to 2013-14) & NABARD Annual Reports
( 2005-06 to 2011-12).
NAFSCOB
Sl.No.
State Date of MoUsSl.No.
State Date of MoUs
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Andhra Pradesh
Madhya Pradesh
Maharashtra
Rajasthan
Orissa
Uttarakhand
Uttar Pradesh
Gujarat
Haryana
Bihar
Arunachal Pradesh
West Bengal
Chhattisgarh
29-08-2006
07-11-2006
13-11-2006
14-11-2006
16-11-2006
30-11-2006
18-12-2006
21-12-2006
20-02-2007
15-03-2007
04-05-2007
21-06-2007
21-09-2007
Tamil Nadu
Nagaland
Tripura
Punjab
Karnataka
Jammu & Kashmir
Meghalaya
Jharkhand
Assam
Mizoram
Manipur
Sikkim
03-01-2008
03-01-2008
21-01-2008
29-01-2008
25-03-2008
07-04-2008
15-04-2008
12-05-2008
26-05-2008
27-06-2008
30-06-2008
01-07-2008
8
5. Government of India – Initiatives for Short Term Cooperative Credit and Banking Sector:
Now, permit me to place before you the various developments and important initiatives as well as events in the
short term rural cooperative credit delivery system and other contributory developments during the year
2012-13.
5.1. Revival Package for STCCS:
The 'Revival Package for Short Term Rural Cooperative Credit Structure (STCCS)' as recommended by the Task
Force under the Chairmanship of Prof. A. Vaidyanathan is being implemented in 25 states which have opted for the
revival package and the process of implementation is in progress at different stages. The Board of Directors of
NAFSCOB since December 2005 have reviewed the status of implementation of the package and the steps
initiated by various agencies in this respect. The 'National Implementing and Monitoring Committee' (NIMC) at
the national level, 'State Level Implementing and Monitoring Committee' (SLIC) at the state level, District Level
Implementing and Monitoring Committee (DLIC) at the district level have been constituted for implementation
and monitoring the revival package. NABARD has been designated as the implementing agency for implementing
the revival package in all the States and NABARD also has established a separate department - 'Department for
Cooperative Revival and Reforms' (DCRR) for overseeing the implementation and monitoring the process of
Revival Package.
The 'National Implementing and Monitoring Committee' (NIMC) has met nine times, without any type of thinvolvement of NAFSCOB, so far to monitor the progress of the implementation of the revival package i.e. on 30
th th st th thMay 2006, 7 September 2006, 19 January 2007, 26th March 2007, 1 August 2007, 13 February 2008, 16 nd thSeptember 2009, 2 June 2010 and 27 January 2011.
Further, date-wise execution of MoUs of 25 states with GoI and NABARD is given below:
FIFTIETH ANNUAL REPORT
9
Sl.No. Issues Status
1 Number of State Govt.executed MoUs
25
2 Special Audit of PACS completed
80,837
3 Share of GoI to PACS (as recommended by SLIC) (Rs. Crore)
No. of PACS – 74,593 12,529crores
Release of recapitalization assistance to PACS (Number/Amount)
Release of Recapitalisation Assistance to CCBs
No. of PACS – 54,712*Amount - 9777.47 crores* (GoI- 8934.24, State- 843.23)
4
5
Special Audit of DCCBs completed
3196
Special Audit of SCBs completed
197
Number of States amended Cooperative Societies Act.
8
Amendments of Rules and adoption of Bye-laws in SCBs(i) Rules Amended
9
(ii) Amendment of Rules (in progress)
(iv) Bye-laws amended
Amendments of Rules and adoption of Bye-laws in DCCBs
10
190.87 crores to 13 CCBs in Odisha State (GoI - 67.87 crores, State - 12.30 crores and CCS Share 110.70 crores)
Andhra Pradesh, Arunachal Pradesh, Bihar, Gujarat, Haryana, Karnataka, Jammu & Kashmir, Jharkhand, Madhya Pradesh, Maharashtra, Manipur, Mizoram, Meghalaya, Nagaland, Odisha, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttar Pradesh, and West Bengal (21 States).
Andhra Pradesh, Bihar, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Sikkim, Uttar Pradesh and West Bengal (11)
Haryana, J & K, Jharkhand, Manipur, Meghalaya, Mizoram, Nagaland, Tamil Nadu and Tripura (9).
Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Sikkim, Tamil Nadu, Tripura and U.P. (14) And – in progress in Arunachal Pradesh, J & K, Nagaland, Odisha, Rajasthan, and West Bengal (6).
i. Bye-laws of DCCBs in Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Madhya Pradesh and Tamil Nadu (8) have been amended.ii. The task is in progress in J & K, Jharkhand, Odisha, Rajasthan, Uttar Pradesh and West Bengal (6) States.
thThe highlights of the status of implementation of the Revival Package as on 30 September 2012 as obtained from the
NABARD website is given below:
NAFSCOB
11 Amendments of Rules and adoption of Bye-laws in PACS
Bye-laws of PACS have been amended in Andhra Pradesh, Arunachal Pradesh, Bihar, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Mizoram, Tamil Nadu, Tripura and U.P. (13). It is in progress in J & K, Manipur, Meghalaya, Nagaland, Odisha, Rajasthan and West Bengal (7).The process has been initiated in implementing States.
12 Status of elected Board(i) SCBs
17
(ii) DCCBs 245
Fit and Proper Criteria of Professional Directors
SCBs
DCCBs
The following SCBs and number of DCCBs have Professional Directors:
Andhra Pradesh, Assam, Gujarat, Haryana, Karnataka, Madhya Pradesh, Manipur, Mizoram, Rajasthan, Sikkim, Tripura and West Bengal SCBs (12)
11 in Andhra Pradesh, 17 in Gujarat, 16 in Karnataka, 25 in Maharashtra, 15 in Odisha, 28 in Rajasthan, 49 in Uttar Pradesh (161 DCCBs).
13
(iii) PACS 68031
14 Fit and Proper Criteria of CEOsSCBs
Andhra Pradesh, Arunachal Pradesh, Gujarat, Haryana, Meghalaya, Nagaland, Orissa, Sikkim, Tripura and Uttar Pradesh (10 SCBs)
15 HRD Training(i) Board members of DCCBs
4158
22 in Andhra Pradesh, 17 in Gujarat, 19 in Haryana, 5 in Karnataka, 30 in Madhya Pradesh, 26 in Maharashtra, 8 in Odisha and 45 in Uttar Pradesh (172 DCCBs)
(ii) CEOs of SCBs /DCCBs
6 SCBs in NER and 368 DCCBs in 16 States
Secretaries of PACSElected members of PACS
86,2761,29,775
CAS and MIS for PACS 20 States16
Computerisation(I) PACS
17
NIMC Meetings held18
Expenditure other than recapitalisation assistance
19
Support from Multi-lateral Agencies
20
DCCBs
In Haryana, Tamil Nadu and Andhra Pradesh Computerisation of PACS is in progress through Private Vendors. 20 States, other than the above three, have opted for the Core Software finalised by NABARD.
9 (last meeting – 27-01-2011)
242.08 crores towards Special Audit, Human Resources Development, Technical Assistance and Implementation Costs (other than recapitalisation)
World Bank realesed US $437.14 million to GoI as part of the agreement (2, November 2007) of financial assistance of US$600 million to Haryana, Gujarat, Odisha, Uttar Pradesh and West Bengal under Revival Package
*780 PACS in Gujarat, 534 PACS in Maharashtra and 196 PACS in Orissa did not meet eligible criteria and 431.17 crores have been released as recapitalisation assistance. Source: NABARD (www.nabard.org)
10
FIFTIETH ANNUAL REPORT
11
5.2. Amendment to the Guidelines for implementation of Integrated Handloom Development Scheme to include
Cooperative Banks and Regional Rural Bank as Implementing Agencies:
In pursuance of the announcements in the Budget for 2011-12 on 28.2.2011 the Government of India had
approved a scheme of “Revival, Reform and Restructuring Package for Handloom Sector” with a total outlay of
Rs.3884 crores and had issued operational guidelines for implementation of the said Scheme. The Board of
Directors of NAFSCOB in their meeting held on 31 January 2012 at Mumbai had deliberated on the scheme as well
as the guidelines for implementation of the Scheme by various agencies concerned. As a follow up, NAFSCOB also
had taken up few important issues with the Development Commissioner (Handlooms), Government of India,
Ministry of Textiles with regard to better appreciation and implementation of the Scheme, which was also perused
by the Board of Directors in their meeting held on 20 April 2012 at Mumbai. Managing Director, NAFSCOB has been
inducted as one of the member of National Implementation, Monitoring and Review Committee (NIMC). He has
been invited to NIMC meeting held on 18-04-2012.
According to the Guidelines of the institutional credit, NABARD, SIDBI and Nationalised Banks (wherever there are
lead banks) were identified as the eligible implementing agencies for margin money assistance and interest
subvention. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was identified as the
implementing agency for the purpose of credit guarantee. The Government of India, Ministry of Textiles, Office
of the Development Commissioner for Handlooms vide Notification No. 9/1/2011/DCH/Cluster dated 19 April
2012 have added 'Cooperative Banks and Regional Rural Banks, in addition to the already identified agencies, as
implementing agency for the purpose of providing margin money assistance and interest subvention through
NABARD under this Scheme.
5.3. 'Simplified Uniform Savings Bank Account Opening Form' along with a detailed list of KYC documents
submitted by Working Group formed by Department of Financial Services (DFS), Ministry of Finance,
Government of India, for opening of bank accounts by individuals:
Department of Financial Services (DFS), Ministry of Finance, Government of India has constituted a Working Group
to suggest a simplified and uniform Savings Bank Account Opening Form to facilitate opening of bank account by
migrant labour, street hawkers and poorer sections of the society so as to achieve the stated objective of
universal financial inclusion. The Working Group also had constituted a Sub-Group of Senior Officers of identified
Public Sector Banks under the coordination of IBA to suggest a simplified uniform account opening form. The IBA
and the Sub-Group have since finalised the 'Simplified Uniform Savings Bank Account Opening Form', primarily
meant for the public sector banks. The Form also contains a detailed list of KYC documents which can be used for
opening of bank account by individuals.
NAFSCOB
12
5.4. Summary of the Report of the Group constituted by the Ministry of Finance, Department of Financial
Services, Government of India to Standardise Procedures for Valuation of Assets:
Department of Financial Services, Ministry of Finance, Government of India constituted a Group comprising of
CMDs/MD of banks under the Chairmanship of Shri M.D. Mallya, Chairman and Managing Director, Bank of Baroda
to standardise procedures for valuation of assets, selection / evaluation of valuers and other parameters on
11 April 2012. The highlights/summary of the Report are as follows:
lRobust asset valuation is increasingly becoming important across the asset life-cycle-origination,
portfolio/collateral management, NPA management, etc.
lThere are several strategic and operational benefits of proper asset valuation.
lThe strategic benefits include enhancing profitability at the time of origination, optimising capital
needs, mitigating losses during NPA management.
lThe operational usage of asset valuation includes sanctioning loans, completing settlements,
implementing sale of assets, etc.
lCurrent asset valuation process poses several challenges.
lKey challenges faced by banks includes no standardised approach to valuation, lack of standardisation in
valuation reports, variation in valuation of different valuers and valuation by non-competent authority.
In particular, there is a need to establish a standard methodology and reporting for the industry.
Sometimes, situational factors and specific nature of the assets makes it difficult to drive
standardisation.
lBanks need to address four key areas to set up an effective and standard asset valuation process –
standardisation of valuation methodology, robust processes of valuer empanelment, strong performance
management of valuers and standardised reporting formats and templates.
lA standard valuation methodology needs to be adopted for both market based valuation and valuation on
bases other than market. This will further help banks to resolve differences in valuation of different
valuers.
lBanks should follow a rigorous and consistent approach to selection of valuers outlining the criteria for
selection, duration of empanelment, empanelment procedure, and processes to manage independence
and objectivity.
lRobust asset valuation approach should be used to drive strong risk management practices. In this
context following three areas become critical – outlining a decision making framework (e.g., for
restructuring, portfolio acquisition, etc.), sensitivity analysis of the assets with changing external
situations, risk monitoring & reporting.
FIFTIETH ANNUAL REPORT
13
5.5. Approval of Banking Laws (Amendment) Bill 2012 by Parliament.
Banking Laws (Amendment) Bill 2012 was introduced in Parliament to amend the Banking Regulation Act, 1949,
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980. The above Bill was approved
by Parliament on 18-12-2012 during its Winter Session and this may be called as 'the Banking Laws (Amendment)
Act, 2012.
The salient features of the Bill are as follows:
lTo enable banking companies to issue preference shares subject to regulatory guidelines by the RBI;
lTo increase the cap on restrictions on voting rights;
lTo create a Depositor Education and Awareness Fund by utilizing the inoperative deposit accounts;
l To provide prior approval of RBI for acquisition of 5% or more of shares or voting rights in a banking
company by any person and empowering RBI to impose such conditions as it deems fit in this regard;
lTo empower RBI to collect information and inspect associate enterprises of banking companies;
lTo empower RBI to supersede the Board of Directors of banking company and appointment of
administrator till alternate arrangements are made;
lTo provide for primary cooperative societies to carry on the business of banking only after obtaining a
license from RBI;
lTo provide for special audit of cooperative banks at instance of RBI by extending applicability of Section
30 to them; and
lTo enable the nationalized banks to raise capital through “bonus” and “rights” issue and also enable them
to increase or decrease the authorized capital with approval from the Government and RBI without being
limited by the ceiling of a maximum of 3000 crore under the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970/1980.
6. Reserve Bank of India (RBI) – Policy and other initiatives for Short Term Cooperative Credit and Banking
Sector – 2012-13:
6.1. Monetary & Credit Policy - 2012-2013:
The practice of inviting Chairman, NAFSCOB; Managing Director, NAFSCOB for consultation on the eve of Annual
Policy Statement and also Mid-Term Review of Annual Policy Statement has been commenced from the year 2005-
06 by Governor, Reserve Bank of India. Since then, a number of issues have been placed before the Governor on
the above occasions. During the year 2012-13 the Governor, RBI held the following annual policy consultation
meetings:
a. Annual Pre-Policy Consultation Meeting - April 03, 2012
b. Second Quarter Review of the Monetary Policy - October 19, 2012
NAFSCOB
14
6.1.1. Annual Policy Statement for the year 2012-13:
thDr. D. Subbarao, Governor of the RBI announced the Annual Monetary Policy for the year 2012-13 on 17 April
2012. The highlights of the Annual Monetary Policy for the year 2012-13 are enumerated as below:
a) The Repo Rate under the Liquidity Adjustment Facility (LAF) by 50 basis points from 8.5 to 8.0 per cent
thwith immediate effect i.e. 17 April, 2012.
b) The Reverse Repo Rate under the LAF automatically adjusts to 7.0 per cent with immediate effect.
c) Similarly, the Marginal Standing Facility (MSF) rate also stands adjusted to 9.0 per cent.
d) The Bank Rate has been reduced to 9.0 per cent from 9.5 per cent with immediate effect.
e) There has been no change in the Cash Reserve Ratio (CRR) and it has been retained at 4.75 per cent.
f) Liquidity support by allowing banks to borrow more from RBI.
g) Economy expected to grow at 7.3 per cent.
h) Inflation to hover at 6.5 per cent.
i) Deposits to grow by 16 per cent.
j) Loan uptake to grow by 17 per cent
6.2. Mid-Quarter Review of RBI.
The Governor, Reserve Bank of India announced Mid Quarter Review of the Annual Monetary Policy for the year
th2012-13 on 19 March 2013. The following major measures were announced in Mid-Quarter Review:
lReduction of Repo Rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 7.75 per
cent to 7.5 per cent with immediate effect.
lConsequently, the Reverse Repo Rate under the LAF adjusted to 6.5 per cent, and the Marginal Standing
Facility (MSF) and the Bank Rate to 8.5 per cent with immediate effect.
In order to rein in the upward trend of inflation, the RBI has been making revision in the Repo and Reverse Repo Rates to
control the supply of money since April, 2009. An analysis of the trends in this regard has been made which is detailed
below. It may be seen that since April, 2009 the RBI has revised the Repo and Reverse Repo Rates 18 times.
FIFTIETH ANNUAL REPORT
15
Dates Repo Rate (%)
21.04.2009
19.03.2010
20.04.2010
02.07.2010
27.07.2010
16.09.2010
02.11.2010
16.12.2010
25.01.2011
17.03.2011
03.05.2011
16.06.2011
26.07.2011
16.09.2011
25.10.2011
16-12-2011
17-04-2012
29-01-2013
29-01-2013
Reverse Repo Rate (%)
4.75
5.00
5.25
5.50
5.75
6.00
6.25
6.25
6.50
6.75
7.25
7.50
8.00
8.25
8.50
8.50
8.00
7.75
7.50
3.25
3.50
3.75
4.00
4.50
5.00
5.25
5.25
5.50
5.75
6.25
6.50
7.00
7.25
7.50
7.50
7.00
6.75
6.50
rdAs per the information from RBI, the Monetary Policy Statement for the year 2013-14 has been announced on 3 May. 2013.
6.3. Working Group on G-Sec and Interest Rate Derivatives Market:
lPursuant to the Monetary and Credit Policy for the year 2011-12, the RBI constituted a Working Group
under the Chairmanship of Shri. R. Gandhi to examine ways to enhance liquidity in G-Sec and Interest
Rate Derivatives Market.
lThe Working Group placed draft report on the website of RBI by the end of May 2012 for wider feedback.
The final report of the Working Group has been submitted in August, 2012.
6.4. Damodaran Committee Report on Customer Service:
lThe Damodaran Committee on Customer Service in Banks constituted by the RBI had made a total of 232
recommendations and these recommendations have been taken up by the RBI for implementation in
September/October, 2011.
Changes in Repo and Reverse Repo Rates announced by RBI since 21.04.2009
NAFSCOB
16
6.4.1. Home Loans on a Floating Interest Rate Basis – Abolition of Foreclosure Charges/Prepayment Penalty:
lAs per the observations made by the Damodaran Committee, the RBI has taken a Policy decision not to
permit banks to levy foreclosure charges/pre-payment penalties on home loans on a floating interest rate
basis and RBI will be issuing separate guidelines in this regard.
6.4.2. Variation in Interest Rates on Deposits to be Minimal:
lIn order to ensure adequate liquidity management system and pricing methodologies, RBI has made a
policy advise that the banks should have a board approved transparent policy on pricing of liabilities and
they should ensure that variation in interest rates on single term deposits of Rs.1.5 Million and above and
other Term Deposits is minimal.
lIn order to strengthen the regulatory framework for inoperative accounts and unclaimed deposits, the RBI
proposed to mandate the banks to have a Board approved policy on classification of unclaimed deposits,
grievance redressal mechanism for quick resolution of complaints, record keeping and periodic review of
such accounts.
lThe RBI has observed that while interest on deposits are predominantly fixed, most of the retail loan
products, especially home loans have been sanctioned on a floating rate basis, thereby exposing the
borrowers to uncertain interest rate movements. In order to examine the issue RBI proposes to set up a
Working Group to assess the feasibility of introducing more long-term fixed interest rate loan products by
banks.
6.4.3. Unique Customer Identification Code (UCIC) for Bank Customers:
·The RBI initiated steps to allot UCIC to all new bank customers to begin with and to all existing customers by the
end of April, 2013.
6.5. Financial Inclusion:
lAccess to Banking Services – Basic Bank Deposit Account: In order to ensure better Financial Inclusion,
the policy has stated that the banks should offer a 'Basic Savings Bank Deposit Account' with the certain
minimum common facilities and without the requirement of minimum balance to all their customers.
lRoadmap for Provision of Banking Services in Villages with Population below 2,000:
In pursuance of the announcement made in the Monetary Policy Statement of April 2010, 74,414 villages
with population above 2,000 were identified as unbanked and a road map was prepared to provide
banking services by March 2012. The banks have covered 74,199 (99.7 per cent) of these unbanked
villages. In order to cover all the unbanked villages of the country the policy proposes to mandate SLBCs
to prepare a roadmap covering all unbanked villages of population less than 2,000 and notionally allot
these villages to banks for providing banking services in a time-bound manner.
FIFTIETH ANNUAL REPORT
17
6.6. Implementation of KYC/AML Guidelines:
The RBI has observed laxities in effective implementation of its guidelines on KYC/AML measures. As any
weakness in the KYC/AML process would leave banks vulnerable to operational risk, the banks have been advised
to ensure compliance with the regulatory guidelines on KYC/AML in both letter and spirit. Therefore the policy
proposed to mandate banks to complete the process of risk categorisation and compiling/updating profiles of
all of their existing customers in a time-bound manner, and in any case not later than end-March 2013.
6.7. Reduction in Bank Rate:
RBI has increased/decreased Repo Rates / Reverse Repo Rates under the Liquidity Adjustment Facility (LAF). The
Annual Monetary Policy for the year 2012-13 had reduced the Bank Rate from 9.5 per cent to 9.0 per cent. Again,
the Bank Rate was reduced by 25 basis points from 9.0 per cent to 8.75 per cent under the revised operating
procedure, Marginal Standing Facility (MSF) instituted at 100 basis point above the policy Repo Rate, in many
ways served the purpose of the Bank Rate. While the policy Repo Rate and the MSF Rate has become operational.
Presently, the Bank Rate acts as the penal rate charged on banks for short falls in meeting their statutory reserve
requirements such as CRR and SLR. The Bank Rate is also used by several other organisations as a reference Rate
for indexation purpose. The RBI after due consultation with various organisations / stake holders has determined
that the Bank Rate should normally stay aligned to the MSF Rate. A chart indicating the variations in the Bank
Rate since 1935 is given in Appendix – 2.
6.8. Cash Reserve Ratio (CRR):
As an anti-inflationary measure and to control and regulate the financial liquidity in the market, the Reserve Bank
of India from time to time has been increasing or decreasing the Cash Reserve Ratio (CRR) required to be
maintained by the banking system. Over the past 77 years the CRR varied from 3% to 15%. However, during the last
one decade it has been always below 9%. CRR has been always on the increase from 5.50 per cent to 9.00 per cent
till August 30, 2008. CRR has been on the decreasing trend since new Governor assumed charge (05-09-2008) i.e. thfrom 8.50 per cent to 4 per cent as on 9 February, 2013. This helps the banks to bring back liquidity in the system
which facilitated chennelising fund to agricultural credit. The steps taken by RBI to reduce the CRR have greatly
eased the liquidity crunch faced by the SCBs to enable them to channelize these funds to agriculture credit/ to
farmers. The chronology of the status of CRR since July 1935 to March 2013 is given in Appendix – 3.
6.9. Statutory Liquidity Ratio (SLR):
Reserve Bank of India had reduced the SLR to 23% of the NDTL of the Scheduled Commercial Banks with effect
from August 11, 2012 with a view to easing their liquidity position. Scheduled Commercial Banks have also been
provided additional liquidity support under LAF up to 1% of their NDTL. This also gave them the leeway to seek
waiver of penal interest as an ad hoc, temporary measure if there were to be any shortfall in maintenance of the
SLR arising out of utilisation of this facility. However, similar facility was not made available to the Scheduled
State Cooperative Banks.
NAFSCOB
18
6.10. Licencing & Scheduling of SCBs and DCCBs:
Government of India in consultation with Reserve Bank of India had constituted a 'Committee on Financial Sector
Assessment' (CFSA) in September 2006 to undertake a comprehensive self-assessment of India's financial sector
including rural cooperative credit institutions viz. State Cooperative Banks (SCBs) and District Central
Cooperative Banks (DCCBs), under the Chairmanship of Dr. Rakesh Mohan, the then Deputy Governor, Reserve
Bank of India.
' The Committee on Financial Sector Assessment (Chairman: Dr. Rakesh Mohan and Co-Chairman: Shri Ashok
Chawla) had recommended that rural cooperative banks which failed to obtain a license by end-March 2012
should not be allowed to operate. The Reserve Bank, along with the National Bank for Agriculture and Rural
Development (NABARD), implemented a roadmap for issuing licenses to unlicensed SCBs and DCCBs in a non-
disruptive manner to ensure the completion of licensing work by end-March 2012. After considering the NABARD's
recommendations for issuance of licenses, one out of 31 SCBs and 42 out of 371 DCCBs were unable to meet the
licensing criteria by end-March 2012'.
Subsequently, the remaining one SCB and 16 of the 42 DCCBs were recommended by the NABARD for issuance of
licences, since these banks attained the licensing norms. The remaining 26 DCCBs are yet to meet the licensing
criteria.
Government of India in consultation with Reserve Bank of India had constituted a 'Committee on Financial Sector
Assessment' (CFSA) in September 2006 to undertake a comprehensive self-assessment of India's financial sector
including rural cooperative credit institutions viz. State Cooperative Banks (SCBs) and District Central
Cooperative Banks (DCCBs), under the Chairmanship of Dr. Rakesh Mohan, the then Deputy Governor, Reserve
Bank of India.
' The Committee on Financial Sector Assessment (Chairman: Dr. Rakesh Mohan and Co-Chairman: Shri Ashok
Chawla) had recommended that rural cooperative banks which failed to obtain a license by end-March 2012
should not be allowed to operate. The Reserve Bank, along with the National Bank for Agriculture and Rural
Development (NABARD), implemented a roadmap for issuing licenses to unlicensed SCBs and DCCBs in a non-
disruptive manner to ensure the completion of licensing work by end-March 2012. After considering the NABARD's
recommendations for issuance of licenses, one out of 31 SCBs and 42 out of 371 DCCBs were unable to meet the
licensing criteria by end-March 2012'.
Subsequently, the remaining one SCB and 16 of the 42 DCCBs were recommended by the NABARD for issuance of
licences, since these banks attained the licensing norms. The remaining 26 DCCBs are yet to meet the licensing
criteria.
FIFTIETH ANNUAL REPORT
19
Therefore, the status of Licenced and Scheduled SCBs/DCCBs as on date is as follows:
Status of Licenced and Scheduled SCBs/DCCBs (as on 31-03-2013)
Note:
i) As on date all 31 member SCBs of NAFSCOB are licenced.
ii) 345 DCCBs out of 371 DCCBs are licenced and the 26 DCCBs are yet to be licenced.
6.11. Committee on Priority Sector Lending:
In accordance with the policy statement the RBI set up a Committee on August 25, 2011 to re-examine the existing
classification and suggest revised guidelines with regard to priority sector lending, classification and related
issues by Commercial Banks under the Chairmanship of Shri M.V. Nair, Chairman and Managing Director, Union
Bank of India. The Composition of the Committee is as follows:
i. Shri M. V. Nair, CMD, Union Bank of India - Chairman
ii. Dr.P.K.Mishra, IAS (Retd.), Former Secretary, Ministry of Agriculture and Co-operation, Government of
India
iii. Smt. Nupur Mitra, ED, Indian Overseas Bank
iv. Smt. Sreya Guha, Director, Ministry of Finance, Department of Financial Services
v. Shri Rajiv Sabharwal, Executive Director, ICICI Bank Ltd.
vi. Shri V. Ramakrishna Rao,Executive Director, NABARD
vii. Shri N.K.Maini, Deputy Managing Director, SIDBI
viii. Shri J K Sinha, Chief General Manager, State Bank of India
ix. Shri N C Khulbe, General Manager, Bank of India
x. Shri Pranab.K.Roy, General Manager, United Bank of India
xi. Dr. Deepali Pant Joshi, CGM-in -Charge, RBI, RPCD - Member Secretary
The Terms of reference of the committee are as under:-
i. To revisit the current eligibility criteria for classification of bank loans as priority sector with reference
to:
a. Nature of activities and types of borrowers (individuals versus institutions, corporate and
partnership firms) of loans.
Sr. No.
SCBs and DCCBs Scheduled and
Licenced
Non-Scheduled
but Licenced
Neither Scheduled nor
Licenced
SCBs (Total No. of SCBs – 31)1 16 15 -
DCCBs (Total No. of DCCBs – 371)
2 Nil 345 26
NAFSCOB
20
b. Limits on loan amounts.
c. Appropriate documentation and due-diligence thresholds, with a view to ensuring that loans
extended by banks are indeed for the eligible categories of purposes and borrowers, which need
special attention and treatment.
ii. To comprehensively review and fine-tune the definition of direct and indirect priority sector finance/
lending, especially loans advanced to/ routed through corporate entities, cooperative societies.
iii. To consider if bank lending via financial intermediaries like Non-Banking Finance Companies, Housing
Finance Companies, etc., for eligible categories of borrowers and activities could be classified under the
priority sector and if so, to lay down the conditions subject to which this classification would be
admissible.
iv. To consider the desirability, or otherwise of capping interest rate on loans under the eligible categories of
the priority sector.
v. To review -
a. The current allocation mechanism for RIDF and other Funds
b. The interest rates payable on RIDF and other Funds to non-compliant (defaulting) banks.
c. The interest rates to be charged on loans from these funds.
vi. To review the existing Management Information System (MIS) prevalent in banks, and suggest ways to
streamline the same in terms of frequency of compliance, data consistency and data integrity.
vii. To consider and suggest the manner and periodicity of conducting impact evaluation studies of credit
flows to different segments of priority sector and arrive at various policy options.
viii. Any other issues and concerns germane to the subject matter.
After wide ranging consultation by the Committee and Five Sub-Groups constituted by the Committee with stakeholders
at various levels particularly in the Government of India, State Governments, Commercial Banks, Private Sector Banks,
RBI, NABARD, IBA, Micro Finance Institutions, Urban Cooperative Banks, Chambers of Commerce, etc. the Committee
submitted its Report to Governor, RBI on 21 February 2012. While highlighting the role of rural cooperative credit
institutions, the Committee has observed that -
“Rural cooperative credit institutions have played a significant role in providing institutional credit to the
agricultural and rural sectors in the past. However, the situation has worsened in recent decades. There is a need
to revitalise the cooperative sector as primary financial intermediaries in rural markets by ensuring speedy
implementation of recommendations given by the Vidyanathan Committee.
While recommending special target for small and marginal farmers, the Committee also considered that the
Government of India may create appropriate credit guarantee fund schemes on the lines of CGTMSE (Credit
Guarantee Fund Trust for MSE) in order to encourage banks to extend loans to these segments. Also, interest
subvention scheme that helps in building a good credit culture may be extended only for prompt repayment of
loans.”
FIFTIETH ANNUAL REPORT
The important recommendations of the Committee include –
i) The overall priority sector lending target is retained at 40 per cent of Adjusted Net Bank Credit (ANBC). The
target for Foreign Banks is fixed at 40 per cent for total priority sector and 15 per cent targets each for Micro
and Small Enterprises (MSE) and Export Credit.
ii) Lending to the agricultural sector would cover the entire spectrum of 'agriculture and allied activities' without
any distinction between Direct and Indirect agriculture and 18 per cent of ANBC is retained as target for
agricultural sector (15 per cent of ANBC for Foreign Banks).
iii) A focused sub-target of 9 per cent of ANBC is fixed for loans extended by banks to small and marginal farmers to
be achieved in stages latest by 2015-16.
iv) The ceilings for various activities for qualifying under priority sector lending have been revised.
v) Differential rate of interest (DRI) scheme may be discontinued as other Governments sponsored schemes
target the similar beneficiaries with better features.
vi) Priority Sector Lending Certificates (PSLC) are recommended to be allowed on a pilot basis with domestic
scheduled commercial banks, foreign banks and RRBs as market players.
vii) Interest Subvention Scheme may be extended for prompt repayment of loans to improve credit culture.
viii) Agricultural loans extended by private sector banks may also be included in the interest subvention scheme.
ix) Establishment of Agricultural Credit Risk Guarantee Fund for Small and Marginal Farmers, similar to Credit
Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is recommended as an efficient mechanism to
address the risk in lending to agriculture sector.
x) Holistic Managing Information System (MIS) – Rationalisation of number of returns.
xi) Impact Evaluation Studies – Social Audit
xii) The Committee recommended the following targets for both domestic scheduled commercial banks and
foreign banks:
21
Target for Foreign Banks
Agriculture 18% -
Of which, Small Farmer and Marginal Farmer (SFMF) 9% -
Micro Enterprises 7% 7%
Domestic Scheduled Commercial Banks
Overall Priority Sector 40% 40%
Exports - 15%
Weaker Sections 10% -
Micro & Small Enterprises - 15%
NAFSCOB
22
6.12. Expert Committee to examine Three Tier Short Term Cooperative Credit Structure (ST CCS) constituted by
RBI under the Chairmanship of Dr. Prakash Bakshi, Chairman, NABARD;
Reserve Bank of India has constituted an Expert Committee to examine Three Tier Short Term Cooperative Credit
Structure (ST CCS) under the Chairmanship of Dr. Prakash Bakshi, Chairman, NABARD on 23 July 2012. The Report
of the Expert Committee to examine Three Tier Short Term Cooperative Credit Structure (ST CCS) has been
submitted to Reserve Bank of India on 15 January 2013. The Report of the Expert Committee has been made
available in the website of RBI on 24 January 2013 (www.rbi.org.in) and website of NABARD (www.nabard.org).
As has been already presented elsewhere in the report, the Reserve Bank of India constituted an Expert
Committee to review the existing Short Term Cooperative Credit Structure (STCCS) focusing on structural
constraints in rural credit delivery system and explore various ways to strengthen the rural cooperative credit
architecture with appropriate institutions and instruments of credit to fulfil credit needs. The composition of the
Expert Committee and its Terms of Reference are as follows:
Chairman:
Dr. Prakash Bakshi, Chairman, NABARD.
Members:
(i) Shri V. Ramakrishna Rao, Executive Director, NABARD
(ii) Shri Umesh Kumar, Joint Secretary, DFS, MOF, GOI
(iii) Dr. Mona Sharma, Principal Secretary, Cooperation, Govt. of Odisha
(iv) Shri Yadavalli Vijayender Reddy, President, A.P. State Coop. Bank
(v) Dr. B. Yerram Raju, Director, Dev. & Research Services (P) Ltd.
(vi) Dr. H. S. Shylendra, Professor, Institute of Rural Management, Anand
Member-Secretary:
Shri C. D. Srinivasan, Chief General Manager, Reserve Bank of India, Rural Planning and Credit Department
The Terms of Reference of the Committee are as given below:
i) To assess role played by State & District Central Cooperative Banks in fulfilling the requirement of agriculture
credit, the primary purpose for which they were set up
ii) To identify Cooperative Banks that may not be sustainable in the long run even if some of them have met the
diluted licensing criteria for the time being
iii) To suggest appropriate mechanism for consolidation by way of amalgamation, merger, takeover, liquidation and
delayering
FIFTIETH ANNUAL REPORT
23
iv) To suggest pro-active measures that need to be taken in this direction by the cooperative banks themselves, GOI,
State Governments, RBI and NABARD
v) Any other issues and concerns relevant to the subject matter.
NAFSCOB expressed its comments/ views on each of the recommendations made by the Expert Committee and made ththem available to Governor, RBI on 07 February, 2013.
6.13. Instruction of RBI on for printing of MICR and IFSC Code on Passbook:
MICR Code is an essential feature for all Electronic Clearing Services (ECS) transactions. In the case of NEFT and
RTGS, the IFSC Code is a pre-requisite for all transactions. Presently, all MICR instruments (Cheque leaves, D.D.
leaves) reflect the MICR Code and under the NEFT and RTGS system of transactions, IFSC Code is also printed on
the face of the Cheque/D.D. leaves. The Reserve Bank of India on a review of the system has decided that the
MICR Code and IFSC Code should also be printed on the Passbook / Statement of accounts of the individual
account holders. Therefore, RBI vide Circular No. DPSS(CO) RTGS No.1934/04.04.002/2011-12 dated April 20,
2012 addressed to Chairmen and Chief Executives of all Banks participating in the RTGS / NEFT /NECS, to take
necessary steps to provide the information on MICR Code and IFSC Code in the Passbook/Statement of account of
the account holders.
6.14. Circular on Conversion of Term Deposits, Daily Deposits or Recurring Deposits for Reinvestment in Term
Deposits by State and Central Cooperative Banks:
On a review of the extant regulatory norms and in order to facilitate better Asset-Liability Management (ALM), it
was proposed to permit banks to formulate their own policies towards conversion of deposits'.
6.15. Circular with regard to levy of foreclosure charges/pre-payment penalties on Home Loans:
The Monetary Policy Statement for the year 2012-13 announced by Governor, RBI on April 17, 2012, among others,
had dealt with Home Loans on floating interest rates. It may be recalled that the Committee on Customer Service
in Banks under the Chairmanship of Shri M. Damodaran, former Chairman of SEBI had observed that foreclosure
charges levied by banks on prepayment of Home Loans are resented upon by Home Loan borrowers across the
board especially since banks were found to be hesitant in passing on the benefit of lower interest rates to the
existing borrowers in a falling interest rate scenario. As such, foreclosure charges are seen as a restrictive
practice deterring the borrowers from switching over to cheaper available source.
In this regard, the RBI felt that the removal of foreclosure charges/prepayment penalty on home loans will lead
to reduction in the discrimination between existing and new borrowers and competition among banks will result
in finer pricing of the floating rate home loans. Infact, many banks had voluntarily abolished prepayment
penalties on floating home loans and RBI in order to ensure uniformity across the banking system in this regard
have decided that banks will not be permitted to charge foreclosure charges/prepayment penalty on home loans
on floating interest rate basis w.e.f. June 15, 2012.
NAFSCOB
24
6.16. Revised 'Kisan Credit Card (KCC) Scheme' based on the recommendations of the Working Group set up by RBI:
The Kisan Credit Card (KCC) Scheme was introduced in 1998 as an innovative credit delivery mechanism to meet
the production credit requirements of the farmers in a timely and hassle-free manner. The KCC Scheme is under
implementation in the entire country by the vast institutional credit framework involving commercial banks,
RRBs and cooperative banks. The KCC has been widely accepted both by the bankers as well as the farmers. As
per the statistics made available by NABARD as at the end of February 2012 the cooperative banks had issued a
total number 4,30,24,038 KCCs, RRBs had issued 1,69,48,038 KCCs and the commercial banks had issued
5,15,68,940 KCCs. In all a total number of 11,15,40,980 KCCs have been issued by the banking institutions.
However, during the process of implementation of the KCC Scheme during the last more than One decade
numbers of impediments have been encountered by the Policy makers, bankers as well as the farmers.
Therefore, it was decided to revisit the existing KCC Scheme to make it more simple and user friendly both by the
farmers as well as the bankers. Accordingly, the Ministry of Finance, Government of India constituted a Working
Group under the Chairmanship of Shri T.M. Bhasin, Chairman and Managing Director, Indian Bank to simplify and
attune the scheme to suit the current requirements and also to facilitate issue of Electronic Kisan Credit Cards.
The Working Group has since submitted its report and recommendations have been accepted by the Government
of India. The salient features of the guidelines issued by NABARD include the following:
1) Assessment of crop loan component based on the scale of finance for the crop plus insurance premium x
Extent of area cultivated + 10% of the limit towards post-harvest household/consumption requirements +
20% of limit towards maintenance expenses of farm assets.
2) Flexi KCC with simple assessment prescribed for marginal farmers.
3) Validity of KCC for 5 years
4) For crop loans, no separate margin need to be insisted as the margin is in-built in scale of finance.
5) No withdrawal in the account to remain outstanding for more than 12 months, no need to bring the debit
balance in the account to zero at any point of time.
6) Interest subvention/incentive for prompt repayment to be available as per the Government of India
and/or State Government norms.
7) No processing fee upto a limit of Rs.3.00 lakh
8) One time documentation at the time of first availment and thereafter simple declaration (about crops
raised/proposed) by farmer.
9) KCC cum SB account instead of farmers having two separate accounts. The credit balance in KCC cum SB
account to be allowed to fetch interest at saving bank rate
10) Disbursement through various delivery channels, including ICT driven channels like ATM/PoS/Mobile
handsets.
FIFTIETH ANNUAL REPORT
25
6.17. Circular advising all RRBs/State and Central Cooperative Banks to initiate submission of reports on the FINnet
Gateway.
RBI vide Circular dated March 03, 2006 and March 09, 2006 have prescribed various reporting formats for banks as
required under the provisions of Prevention of Money Laundering Rules, 2005. Further, in August 2011 the banks
were also advised to be in readiness for submission of such reports through FINnet Gateway as advised by FIU IND.
In August 2012 FIU IND had advised the banks to initiate submission of reports on the FINnet Gateway in 'Test Mode'
from August 31, 2012 to test their ability to upload the report electronically. Such submission in 'Test Mode' was
to be continued till FIU IND informs the banks about 'Go-Live', during which time the banks were also required to
continue to submit the existing reports in CD format.
In continuation of the said advise, RPCD RBI vide Circular No. RPCD.CO.RRB.RCB.AML.BC. No. 36/03.05.33 (E)
/2012-13 dated October 15, 2012 has conveyed the FIU IND decision / advise that the 'Go-Live' date will be
October 20, 2012 and that the banks may discontinue submission of the reports in CD format after October 20,
2012. The banks are now required to use only FINnet Gateway for uploading of reports in the new XML reporting
format and any report in CD format received October 20, 2012 will not be treated as valid submission by FIU IND.
RPCD RBI has advised all SCBs and DCCBs, apart from RRBs to take appropriate action as required by FIU IND and
ensure that all reports are submitted in time and as per schedule.
6.18. National Telecom Policy, 2012 on Migration of current version of Internet Protocol IPv4 to Ipv6:
Government of India has envisaged providing "Broadband on Demand" by 2015 in the recently unveiled National
Telecom Policy (NTP) - 2012 emphasizing the role of Internet as catalyst for socio-economic development of the
country and also as an effective medium of various citizen centric services in today's information economy. Since
the current version of Internet Protocol (IPv4) has almost run out of addresses, the broadband revolution is sure
to ride on next generation Internet Protocol (IPv6). The NTP - 2012 recognizes the futuristic role of IPv6 and aims
to achieve substantial transition to IPv6 in the country. Department of Telecommunication under the Ministry of
Communication and Information Technology, Government of India has undertaken the initiative of migration from
IPv4 to IPv6. Since migration to IPv6 is an eventuality that has to be accepted and managed proactively,
government wants it to be done in a planned way rather than against time. They have expressed that the
migration of all payment gateways, banks, financial institutions, insurance companies, etc. including their
websites should be completed preferably by December 2012. Reserve Bank of India vide its letter No.
RPCD.CO.RCB.BC.No.47/07.38.003/2012-13 dated November 23, 2012 advised all SCBs and DCCBs to initiate
necessary action by constituting a special team to complete the migration within the stipulated time.
NAFSCOB
26
6.19. Standardisation and Enhancement of Security Features in Cheque Forms – Migrating to CTS 2010 standards:
The introduction of new cheque standards ‘CTS 2010' was warranted on account of several developments in the
cheque clearing viz. growing use of multi-city and payable-at-par cheques at any branch of a bank, increasing
popularity of Speed Clearing for local processing of outstation cheques and implementation of grid based Cheque
Truncation System (CTS) for image-based cheque processing etc. The new cheque standard "CTS 2010" with set of
minimum security features would ensure uniformity across all cheque forms issued by banks in the country and
also help presenting banks while scrutinising / recognising cheques of drawee banks in an image-based processing
scenario. It is expected to act as a deterrent against cheque frauds, while the standardisation of field placements
on cheque forms would enable straight-through-processing both under CTS and MICR clearing.
Reserve Bank of India has already given the time to banks for migrating to the new cheque standard and
subsequently decided to prescribe a cut-off date for implement the 'CTS-2010 standards' across the country.
Therefore, all banks providing cheque facility to their customers have been advised to issue only 'CTS-2010'
standard cheques not later than April 1, 2012 on priority basis in northern and southern region which will be part
of the northern and southern CTS grids respectively and across the country by September 30, 2012 through a time
bound action plan. Reserve Bank of India, after a review observed that non-CTS-2010 Standard cheque forms
continue to be issued by the banks, made an attempt to impress upon the banks the inherent advantages in CTS
2010 standards. Accordingly RBI suggested the banks to arrange to withdraw the non-CTS-2010 Standard cheques
in circulation before December 31, 2012 by creating awareness among customers through SMS alerts, letters,
display boards in branches/ATMs, log-on message in internet banking, notification on the web-site etc.
The Board of Directors of NAFSCOB in their meeting held on 17 November 2012 perused the issues identified the
constraints in making necessary arrangements to put in place 'CTS-2010 standards' across the country and
resolved to make a representation to RBI to consider extending the time frame upto September 30, 2013 for CBS
compliance and migration to CTS 2010 by SCBs and DCCBs. Accordingly, the issue has been taken with RBI vide our
letter No. NAFSCOB/B-4(149)/2012-13/469 dated 12-12-2012. Responding to our above cited letter dated 12-12-
2012, RBI vide its letter No. DPSS.CO.CHD.No.1016/03.06.03/2012-13 dated December 26, 2012 communicated
that the time line for issuance of CTS-2010 standard payable at par cheques and replacement of non-CTS-2010
standard cheques have been extended up to March 31, 2013.
6.20. Guidelines issued by RBI with regard to licensing of New Banks in the Private Sector:
The Hon'ble Finance Minister in his 2010-11 Budget Speech announced RBI's proposal to consider giving some
additional banking licenses to private sector players to ensure that the banking system grows in size and
sophistication to meet the needs of a modern economy. In this context, the RBI had put out a discussion paper on thits website on 11 August, 2010 and invited feedback and comments. The RBI had released draft guidelines on
thlicensing of new banks in its website on 29 August, 2011 and invited views and comments on the same. After
FIFTIETH ANNUAL REPORT
27
examining some of the suggestions were accepted and vital amendments to the Banking Regulation Act 1949 carried out in
December, 2012. After consulting Government of India, the RBI has finalised guidelines for 'Licensing of New Banks in the
ndPrivate Sector'. Accordingly, RBI released 'Guidelines for Licensing of New Banks in the Private Sector' on 22 February,
2013. Detail guidelines on eligibility and procedure for application are covered in the circular. Key features of guidelines
are given below.
Key features of guidelines are:
I. Eligible Promoters: Entities / groups in the private sector, entities in public sector and Non-Banking Financial
Companies (NBFCs) shall be eligible to set up a bank through a wholly-owned Non-Operative Financial Holding
Company (NOFHC).
ii. Fit and Proper' criteria: Entities / groups should have a past record of sound credentials and integrity, be
financially sound with a successful track record of 10 years. For this purpose, RBI may seek feedback from
other regulators and enforcement and investigative agencies.
iii. Corporate structure of the NOFHC: The NOFHC shall be wholly owned by the Promoter / Promoter Group. The
NOFHC shall hold the bank as well as all the other financial services entities of the group.
iv. Minimum voting equity capital requirements for banks and shareholding by NOFHC: The initial minimum
paid-up voting equity capital for a bank shall be ̀ 5 billion. The NOFHC shall initially hold a minimum of 40 per
cent of the paid-up voting equity capital of the bank which shall be locked in for a period of five years and
which shall be brought down to 15 per cent within 12 years. The bank shall get its shares listed on the stock
exchanges within three years of the commencement of business by the bank.
v. Regulatory framework: The bank will be governed by the provisions of the relevant Acts, relevant Statutes
and the Directives, Prudential regulations and other Guidelines/Instructions issued by RBI and other
regulators. The NOFHC shall be registered as a non-banking finance company (NBFC) with the RBI and will be
governed by a separate set of directions issued by RBI.
vi. Foreign shareholding in the bank: The aggregate non-resident shareholding in the new bank shall not exceed
49% for the first 5 years after which it will be as per the extant policy.
vii. Corporate governance of NOFHC: At least 50% of the Directors of the NOFHC should be independent directors.
The corporate structure should not impede effective supervision of the bank and the NOFHC on a consolidated
basis by RBI.
viii. Prudential norms for the NOFHC: The prudential norms will be applied to NOFHC both on stand-alone as well
as on a consolidated basis and the norms would be on similar lines as that of the bank.
ix. Exposure norms: The NOFHC and the bank shall not have any exposure to the Promoter Group. The bank shall
not invest in the equity / debt capital instruments of any financial entities held by the NOFHC.
x. Business Plan for the bank: The business plan should be realistic and viable and should address how the bank
proposes to achieve financial inclusion.
NAFSCOB
28
xi. Other conditions for the bank :
lThe Board of the bank should have a majority of independent Directors.
lThe bank shall open at least 25 per cent of its branches in unbanked rural centres (population up to 9,999
as per the latest census)
lThe bank shall comply with the priority sector lending targets and sub-targets as applicable to the
existing domestic banks.
lBanks promoted by groups having 40 per cent or more assets/income from non-financial business will
require RBI's prior approval for raising paid-up voting equity capital beyond ̀ 10 billion for every block of
`5 billion.
lAny non-compliance of terms and conditions will attract penal measures including cancellation of licence
of the bank.
xii. Additional conditions for NBFCs promoting / converting into a bank : Existing NBFCs, if considered
eligible, may be permitted to promote a new bank or convert themselves into banks.
6.21. Highlights of the Report on Trend and Progress of Banking in India.
The RBI released the statutory “Report on Trends and Progress of Banking in India 2010-11” on November 08, 2012.
The Report reviewed the performances of the global and Indian banking sectors and presents the salient policy
developments relating to each of these sectors during the year. Within the domestic banking sector the report
covers a comprehensive analysis of commercial banks, cooperative banks and non-banking financial institutions.
As per the report, during 2011-12 banks in India were able to improve their profitability but their asset quality was
impaired.As per the Report, the key issues related to the Indian banking sector include:-
i. Move towards Basel III to entail capital infusion.
ii. Issues in convergence with International Financial Reporting Standards (IFRS).
iii. Improvement in asset quality of banks.
iv. Financial Inclusion: need for meaningful inclusion.
v. Data integrity is a prerequisite for effective supervisory.
vi. Enhanced usage of technology – need for improved risk management tools.
The Report covers in detail the major development and trends in the arena of global banking, policy reforms,
policy environment, operations and performance of commercial banks, developments in cooperative banking and
development in non-banking financial institutions. The Report while analysing the development in cooperative
banking particularly the short term cooperative credit sector made the following two important observations:
i. There was no major change in NPAs of SCBs as at the end of March 2011, both in absolute and percentage
terms (8.9%).
ii. At the end of March 2011, almost 40 per cent of PACS operating in the country were loss making.
FIFTIETH ANNUAL REPORT
29
6.21.1. Technological reforms under Revival Package:
The report reveals that NABARD has finalised the core software and made it available to 20 States, viz., Arunachal
Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Jammu and Kashmir, Jharkhand, Karnataka, Madhya Pradesh,
Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Tripura, Uttar Pradesh and
West Bengal. The trial run of the software has been completed in 10 States, viz., Assam, Arunachal Pradesh,
Chhattisgarh, Gujarat, Jharkhand, Maharashtra, Madhya Pradesh, Odisha, Uttar Pradesh and West Bengal, and is
in progress in Karnataka, Rajasthan and Tripura. The remaining States have initiated steps for the trial run.
The report in short conveyed that in spite of challenges, banking sector in India can look forward to enormous
opportunities in their quest for long term growth. It further added that in the long term, banks need to build
themselves on four important principles i.e. efficiency, stability, transparency and inclusion. The banking sector
needs to focus on growth through inclusion, innovation and diversification while complying with domestic
regulations and adopting international Best Practices.
7. National Bank for Agriculture and Rural Development (NABARD) - Policy and other initiatives for Short Term
Cooperative Credit and Banking Sector - 2012-13:
7.1. SAO Policy for the year 2012-13– Highlights:
NABARD, under Section 21(1) of NABARD Act, 1981 announces annual policy with regard to provision of refinance
to SCBs as well as DCCBs for financing SAO. The policy for provision of short term refinance by NABARD to SCBs for
financing Seasonal Agricultural Operations (SAO) was reviewed by NABARD and the SAO policy for the year 2012-13
was been communicated vide NABARD circular No. NB.PCD (Policy)/104/A-1(Gen) (RP)/2012-13 dated 18 April
2012. The following are the highlights of the ST (SAO) policy for 2012-13:
i. The ST(SAO) Policy for the year 2012-13 was on the similar lines as indicated in the policy for the year
2011-12.
ii. The quantum of ST (SAO) refinance in 2012-13 was linked to Net NPA level of the SCB and there is no
change in the slabs prescribed for 2011-12. Further, the norms which were operational during 2011-12
would continue during 2012-13.
iii. NABARD refinance to SCBs would be provided at 4.5% p.a. (subject to change, if any, by Govt. of India)
only if the ST Cooperative in the state together with their own involvement provide crop loan to farmers
at 7% p.a. or less (crop loan upto Rs.3.00 lakh per borrower).
iv. All the cooperative banks have been instructed to accord top priority for implementation of Kisan Credit
Card, revised schemes and instructions.
v. SCBs were advised to submit the consolidated credit limit application on behalf of all the eligible DCCBs
in prescribed proforma to NABARD Regional Office (RO).
NAFSCOB
30
7.2. Sanction of ST (SAO) Credit Limits:
The aggregate credit limits sanctioned for financing Short Term Seasonal Agricultural Operations ST(SAO) by
NABARD to SCBs on behalf of DCCBs from April 1, 2012 to March 31, 2013 stood at Rs.44,527 Crore and the
maximum outstanding for the said period was Rs.44,492 Crore. The state-wise sanction and maximum
outstanding of Short Term Credit Limits for ST (SAO), ST (Weavers) and MT (Conversion) during the year 2012-13 is
given in Appendix 4.
7.3. NABARD's policy for provision of refinance to State Cooperative Banks for financing various purposes under
Short Term (Others) during the year 2012-13:
NABARD had communicated the policy on Provision of Short Term refinance by NABARD to SCBs for financing
various purposes under Short Term (Others) for the year. The highlights of the governing provisions of the Policy
are as follows:
1) Refinance assistance from NABARD to SCBs was made available at 10% p.a. or such other rate as may be
prescribed from time to time by NABARD.
2) The SCBs which have executed MOU under VC-I Package were required to submit their application for
sanction of credit limits to the concerned Regional Office of NABARD and the States which have not
executed the said MOU was required to submit their application to the Regional Office duly
recommended by the RCS.
3) NABARD sanctioned a consolidated limit under ST (Others) to the SCBs on behalf of eligible DCCBs and the
limit sanctioned for the year 2012-13 include the amount outstanding against the sanctioned for the year
2011-12 and any outstanding prior to the same.
4) Net NPAs of the SCB not to exceed 10% as on 31 March 2011 for all SCBs except SCBs in North-East, Jammu
& Kashmir, Sikkim, Andaman & Nicobar, Himachal Pradesh, Uttarakhand where NPA prescription is fixed
at 15%. Any SCB having net NPA above the prescribed rate were not eligible for sanction ST (Others)
limit.
5) The quantum of refinance from NABARD was 60% of the RLP.
6) Credit limits to non-Scheduled SCBs were available only against Government guarantee/pledge of
Government securities.
7) The purposes of the credit limit will include ST Agriculture and allied activities, ST rural artisans
including weaver members, ST fishery sector, ST purchase stocking and distribution of fertilizers and
other agricultural inputs and ST labour contract engaged in approved broad groups cottage of small scale
industries, forest labour cooperative societies, labour contract cooperatives engaged in civil work in
rural areas, etc.
FIFTIETH ANNUAL REPORT
31
7.4. NABARD Refinance Policy with regard to relief measures to farmers affected by natural calamities by way of
conversion of ST (SAO) loans into medium term loans, for the year 2012-13.
NABARD had communicated the guidelines for providing relief measures to farmers affected by the natural
calamities by way of conversion of ST SAO loans into medium term loans for the year 2012-13 vide Policy circular
No.NB.PCD(Policy)/457/A-10/2012-13 dated 21 June 2012. The highlights of the policy guidelines are given as
below:
i. Consolidated limit was sanctioned to the SCBs in respect of all eligible DCCBs.
ii. The eligibility norms for SCB/DCCBs as stipulated for sanction of ST (SAO) limits for the year 2012-13,
were also applicable for sanction of MT (conversion) as under:
a) Audit of SCB should have been completed for the year 2010-11 and the relevant reports along
with financial statements should have been received by NABARD.
b) SCBs/DCCBs not complying with Section 11(1) of the BR. Act 1949 (AACS), whose licence
application has not been recommended for exemption to RBI/GoI by NABARD or whose licence
application has been rejected were not eligible for sanction of refinance. Further, the Section
11(1) non-compliance bank whose application is pending with RBI/GoI for more than a year would
also not eligible for refinance.
iii. Only current short term crop loans were made eligible for conversion for a period upto five year for small
farmers and upto three years for other farmers.
iv. The refinance support from NABARD for MT (Conversion was at the rate of 60% and the State Government
had to share 15% and the share of SCB/DCCBs was 25%.
v. The refinance assistance to SCBs was available only against the State Government guarantee.
vi. The rate of interest for MT (Conversion)/rephasement/reschedulement for the year 2012-13 was fixed at
3% less than that charged by banks subject to a minimum interest rate of 7.25% and subject to the banks
following the RBI guidelines.
vii. The penal interest was at 10.25 per cent in case of default in repayment of principle and interest by SCB.
viii. The process of conversion has to start at PACS level and complete at NABARD level and the conversion is to
be effected before due date.
ix. Suspension/remission of land revenue by the Revenue Authority/State Government.
x. The affected borrowers whose loans had been converted were extended crop loans as per their eligibility,
scale of finance, repaying capacity, etc. for fresh crops. DCCBs and PACS on their own may decide the
quantum of such fresh short term crop loans.
NAFSCOB
32
xi. On the treatment of agricultural loans affected by natural calamities for the purpose of prudential norms
and NPA classification, norms fixed by RBI should be followed.
7.5. 'Cooperative Development Fund' (CDF):
In pursuance with the recommendations of the 'Parliamentary Committee on Agriculture', 'Cooperative
Development Fund' (CDF) was constituted by NABARD in the year 1992-93 under the provisions of Section 45 of
NABARD Act, 1981 with a view to strengthening and providing assistance to Co-operative Credit Institutions for
improving their infrastructural facilities.
The cumulative assistance sanctioned to cooperative institutions i.e. SCBs & ARDBs from the Fund for various
purposes upto 31 March 2013 amounted to Rs.133.48 crore against which Rs.114.80 crore has been disbursed.
stThe purpose-wise actual sanction and disbursal of assistance under CDF to State Cooperative Banks as on 31
March, 2013 is as follows:
(Rs. in lakhs)
Sr.No.
Purpose Sanctioned Disbursed Disbursal to Sanction (%)
Infrastructure
Computerisation
Fax Machine
Financial Analyst / BDD
Doubling of Credit
Publicity / Publication/ Others
1
2
3
4
5
6
1245.76
1911.47
18.77
1058.23
46.56
145.19
4425.98
1086.78
1710.79
11.08
168.26
46.56
108.81
3132.28
87.24
89.50
59.03
15.90
100
74.94
70.77Total
The balance of sanctioned funds under CDF are mainly for the ARDBs for the above purposes as well as reimbursement of
costs to ACSTIs & JLTCs, trained programme conducted by national level institutions such as NCMDARDB, VAMNICOM &
ASCI, conduct of studies/seminars, best performance awards, cooperative awareness programme, organisational
development initiatives, KCC, co-operators meet and seminars etc. The purpose-wise sanction and disbursement of CDF assistance to the cooperative credit institutions etc. as on March 31,
2013 is presented as Appendix -5, 6 & 7 respectively.
FIFTIETH ANNUAL REPORT
33
7.6. Kisan Credit Card (KCC) Scheme:
Kisan Credit Card (KCC) scheme was formulated by NABARD at the instance of Government of India in August
1998. As per NABARD statistics, as on 28-02-2013, the Cooperative Banks, the Regional Rural Banks and the
Commercial Banks collectively issued a total of 99252000 Kisan Credit Cards (KCCs) since inception of the scheme
against which a sum of. 481811 Crores loans was sanctioned till date. During the year 2012-13 the total number
KCC issued by the Cooperative Banks, Regional Rural Banks and the Commercial Banks was 4186432 and the
amount sanctioned during the said period was 21328 Crore. As at the end of March 2013 the progress in issue of
Kisan Credit Cards / Kisan Credit Card-cum-passbook under the scheme has been significant. In the total KCCs
issued since inception Cooperative Banks issued 34096504 KCCs as against 10406123 KCCs by RRBs and 54749373
KCCs by the Commercial Banks.
During the year 2012-13, the Cooperative Banks issued a total number of 2426405 KCCs, the RRBs issued 1760027
KCCs. Similarly the amount sanctioned against these KCCs was Rs.10563 Crore by Cooperative Banks, and 10765
Crore by RRBs respectively.
The progress of KCC Scheme & the Agency-wise issue of KCCs since inception, as at the end of March 2013, is given
in the Appendix 8 and Appendix 9 respectively.
7.7. Boston Consulting Group – 'Indian Banking 2020 Making the Decade's Promise Come True':
The Boston Consulting Group (BCG), a global management consulting firm, has been retained by NABARD to
examine the Terms of Reference given to them. NABARD retained BCG to draw up an action plan to facilitate
restructuring and/or re-positioning of NABARD. The BCG submitted its report with a specific action plan to
address the issues related to restructuring / re-positioning of rural cooperative credit delivery structure, as a
part of the proposed mandate of NABARD. NAFSCOB has already requested NABARD to share if possible, the most
important recommendations or the action plan suggested by BCG with regard to the most crucial issues pertaining
to rural cooperative delivery system.
Further, it is understood that the BCG has also been retained by FICCI & IBA to examine the terms of reference
given to them. The BCG has prepared a document entitled “Indian Banking 2020.: Making Decade's Promise Come
True”. The document addressed the issues such as trends in the Indian Banking Industry and the factors that are
likely to shape the Indian Banking. It has also covered the issues such as Financial Inclusion vis-à-vis the
expectations and suggestions to enable NABARD to play pivotal role in rural infrastructure development and the
need for continued emphasis to revitalize the rural cooperative banking institutions.
NAFSCOB
34
8. Progress and Performance of Short Term Cooperative Credit Institutions:
The short term cooperative credit institutions in the country have aggregate 'Working Capital' of Rs.565802.70
Crore which is a measure of important contribution of cooperative Credit sector to the national economy. It is
praise-worthy that in tune with the overall growth of the cooperative movement the short term cooperative
credit structure has made significant progress. The details of the progress made by the State Cooperative Banks
(SCBs), District Central Cooperative Banks (DCCBs) and Primary Agricultural Credit Societies (PACS) are discussed
in the following paragraphs.
8.1 Performance of State Cooperative Banks (SCBs) – (2011-12 vis-à-vis 2010-11):
8.1.1. At present there are 31 SCBs in the country and all 31 SCBs have enrolled themselves as members of
NAFSCOB. The details of performance of SCBs during 2011-12 vis-à-vis 2010-11 is given in Appendix – 10
(10, 10A, 10B, & 10C).
8.1.2. The 'Membership' of SCBs which was 2,34,827 in 2010-11 increased during 2011-12 to 2,54,358. This was
mainly due to the increase in the membership of Individuals to the tune of 19,631 and however the
membership of Cooperative Societies decreased from 20187 in 2010-11 to 20087 during 2011-12.
8.1.3. The 'Paid up Capital' increased by 550.30 Crore in 2011-12 which worked out to 26.63 per cent. The
'Share Capital from Government' in the total 'Paid up Capital' increased from 596.47 Crore to 707.43
Crore during the year 2011-12.
8.1.4. The 'Reserves' of SCBs aggregated to 10,558.19 Crore during 2011-12 which was 9,558.66 Crore in
2010-11 registering a increase of 999.53 Crore which is an increase of 10.46 per cent.
8.1.5. As in the past main component of 'Resources' of the SCBs is 'Deposits'. The actual level of deposits at the
close of 2011-12 was 86,652.96 Crore as compared to 81,664.24 Crore in 2010-11, i.e. net increase of
4,988.72 Crore (6.11%).
8.1.6. Overall 'Borrowings' which continued to be sizeable, increased from 32,606.86 Crore during 2010-11 to
42,713.62 Crore during 2011-12 with an increase of 31 per cent.
8.1.7. The aggregate 'Working Capital' of all the SCBs increased from 1,30,670.94 Crore during 2010-11 to
1,47,988.50 Crore during 2011-12, registering an absolute increase of 17,317.56 Crore. The growth in
terms of percentage was moderately satisfactory with 13.25 per cent.
8.1.8. There has been increase in the 'Loans and Advances' issued by SCBs from 68,480.63 Crore in 2010-11 to
81,523.45 Crore in 2011-12 i.e. increase of 13,042.82 Crore in absolute terms i.e. 19.05 per cent.
8.1.9. The 'Total Loans Outstanding' amounted to 75,631.87 Crore during the year 2011-12 as against of
65,081.82 Crore during 2010-11 an increase of 16.21 per cent.
FIFTIETH ANNUAL REPORT
35
8.1.10. However, there was increase in 'Loan Recovery' during the year 2011-12. The total loans recovered was to
the tune of 46061.03 Crore during the year 2011-12 as against 29,791.91 Crore during 2010-11 i.e.
increase of 16269.12 Crore i.e. increase of 54.61%.
8.1.11. The per centage of 'Recovery to Demand' was 96.14 per cent during 2011-12.
8.1.12. The per centage of 'Overdues to Demand' was 3.86 during 2011-12.
8.2. Performance of District Central Cooperative Banks (DCCBs) - (2011-12 vis-à-vis 2010-11):
8.2.1. There were 371 DCCBs as at the end of 2011-12. The performance of DCCBs relating to various operational
parameters is given in Appendix - 11 (11, 11A, 11B, & 11C).
8.2.2. The 'Membership' of DCCBs increased from 31,46,070 in 2010-11 to 36,59,385 in 2011-12 i.e. an increase
of 16.32 per cent, mainly due to increase in the Cooperative Societies membership. The membership of
Cooperative Societies in the DCCBs has increased from 6,30,451 to 8,05,000 during the same period.
8.2.3. The 'Paid up Share Capital' of DCCBs increased from 7,257.68 Crore in 2010-11 to 8,188.92 Crore during
2011-12 registering an increase of 931.24 Crore or 12.83 per cent. The Government contribution to the
'Paid up Share Capital' which was 1,320.21 Crore during 2010-11 reduced to 1,314.61 Crore i.e. a
reduction of 0.42%.
8.2.4. 'Reserves' of DCCBs which aggregated to 20,692.02 Crore in 2010-11 increased to 22,920.34 Crore
during 2011-12 or increased by 10.77 per cent.
8.2.5. The DCCBs in the country mobilised a 'Deposit' of 1,76,822.38 Crore in 2011-12 in which 'Individual
Deposits' accounted for 61 per cent of the 'Total Deposits'. The 'Deposits from Cooperatives' and 'Others'
increased from 64,390.23 Crore in 2010-11 to 69,641.98 crore in 2011-12, registering a net increase
of 5251.75 Crore which works out to 8.16 per cent.
8.2.6. The 'Borrowings of DCCBs' increased from 39,101.16 Crore in 2010-11 to R50,481.31 Crore in 2011-12,
registering a net increase of 11,380.15 Crore i.e. an increase of 29.10 per cent.
8.2.7. The 'Working Capital' of DCCBs increased from 2,35,430.70 Crore in 2010-11 to 2,57,306.23 Crore in
2011-12 indicating an absolute increase of 21,875.53 Crore i.e. an increase of 9.29 per cent.
8.2.8. The 'Loans and Advances' issued by DCCBs have increased from 1,37,757.17 Crore in 2010-11 to
1,62,560.38 Crore in 2011-12. The increase was to the order of 24,803.21 Crore i.e. an increase of
18.01 per cent. The 'Loans Outstanding' have gone up by 17.89 per cent and amounted to 1,44,761.15
Crore as at the end of March, 2011-12.
8.2.9. There was an improvement in 'Loan Recovery'. The total loans recovered amounted to 97,166.86 Crore
during the year 2011-12 as against 77,069.22 Crore during 2010-11 i.e. increase of 20,097.64 Crore or
26.08 per cent.
NAFSCOB
36
8.2.10. A 'Demand' for a sum of 1,24,376.00 Crore in 2011-12 as against 1,06,118.64 Crore in 2010-11, has been
observed.
8.2.11. The per centage of 'Overdues to Demand' decreased from 27.37 perc ent in the year 2010-11 to 21.88 per
cent in 2011-12.
8.2.12. However the position of 'Overdues' at DCCBs level continued to be a matter of concern. The recovery of
loans and advances needs to be given serious utmost importance and all out efforts should be made to
ensure continuous flow of credit for agriculture and allied activities in the rural areas.
8.3. Performance of Primary Agricultural Credit Societies - (2011-12 vis-à-vis 2010-11):
8.3.1. As in the case of SCBs and DCCBs the overall performance of PACS during the year 2011-12 was also
satisfactory. The details of the performance of the PACS during the year 2011-12 vis-à-vis 2010-11 is given
in Appendix-12 (12, 12A, 12B, & 12C).
8.3.2. As far as the number of total PACS is concerned, it is observed that the number marginally decreased from
93,413 in 2010-11 to 92,432 in 2011-12. The membership of societies decreased from 1,21,225 during
2010-11 to 1,13,596 in 2011-12 i.e. a decrease of 6.29 per cent. However, it was observed that there was
increase in the membership of 'Scheduled Caste' and 'Scheduled Tribes' during the year 2011-12. The per
centage of 'Borrowing Members' to 'Total Membership decreased to 39.51during 2011-12 as against 43.22
during 2010-11 i.e. a decrease of 3.71per cent.
8.3.3. The 'Paid up Share Capital' of PACS increased from 7,551.17 Crore during 2010-11 to 8,280.10
Crore in 2011-12 which is an absolute increase of 728.93 Crore or 9.65 per cent. During the same
period the 'Government's contribution to the Paid up Capital' of PACS increased by 6.22 per cent. The
Government share in total 'Paid up Capital' stood at 655.78 Crore and formed 7.92 per cent of the total
during 2011-12.
8.3.4. The total 'Reserves' of PACS stood at 7,715.77 Crore during 2011-12. This shows an increase of 11.75
per cent over the previous year.
8.3.5. Efforts of 'Deposit' mobilisation by PACS has been encouraging during the year. The deposits stood at
50,252.79 Crore during 2011-12 as against 37,2,38.16 Crore during 2010-11, an increase of 34.95 per
cent.
8.3.6. The 'Borrowings' of PACS increased from 54,000.10 Crore during 2010-11 to 88,835.57 in 2011-12 i.e.
increase of 34,835.47 Crore, an increase of 64.51 per cent.
8.3.7. The 'Working Capital' of PACS increased from 1,44,221.90 Crore during 2010-11 to 1,60,507.97 Crore
in 2011-12 i.e. an absolute increase of 16286.07 Crore which worked out to be 11.29 per cent.
FIFTIETH ANNUAL REPORT
37
8.3.8 There was an increase in 'Loans and Advances' issued by PACS during 2011-12 over 2010-11. The total
'Loans and Advances' issued by PACS increased from 91,303.82 Crore during 2010-11 to 1,07,300.23
Crore during 2011-12 registering 17.52 per cent increase.
8.3.9. 'Loans Outstanding' which was 87,768.94 Crore during 2010-11 increased to 91,243.21 Crore in 2011-
12, indicating an increase of 3.96 per cent.
8.3.10. 'Loans and Advances' recovered by PACS was 67,543.23Crore during 2010-11 and the same during the
year 2011-12 was 66,444.39 crore an absolute decrease of 1098.84 Crore or 1.63 per cent.
8.3.11. The 'Overdues' totalled to 24,303.63 Crore in 2011-12 as against 22,697.13 Crore during 2010-11 i.e.
an absolute increase of 7.08 per cent.
8.3.12. The percentage of 'Overdues to Demand' has increased from 25.15 per cent during 2010-11 to 26.78 per
cent during 2011-12.
The progress and performance of the short term cooperative credit institutions is also presented through graphs
in Appendices.
9. National Federation of State Cooperative Banks (NAFSCOB):
9.1. Genesis and Objectives:
As you are aware, National Federation of State Cooperative Banks (NAFSCOB) was established on May 19, 1964
with a view to facilitate the operations of State and Central Cooperative Banks in particular and development of
Cooperative Credit in general.
The specific objectives of NAFSCOB are to:
1. Provide a common forum to the member banks to examine the problems of cooperative credit banking and allied
matters and evolve suitable strategies to deal with them.
2. Promote and protect the interests of the member banks in all spheres of their activities and to give expression to
the views of the member banks.
3. Co-ordinate and liaison with Government of India, Reserve bank of India, respective State Government NABARD
and other higher financing institutions for the development of cooperative credit on behalf the member banks.
4. Provide research and consultancy inputs to the member banks in order to facilitate them to strengthen their own
organisations.
5. Organise Conferences / Seminars / Workshops / Programmes / Meetings to share the views of common
interest with a view to contribute for better policy decisions.
NAFSCOB
38
NAFSCOB functions with three of its wings viz. (1) Planning, Research and Development (PRD) (2) All India Mutual
Arrangement Scheme (AIMAS) and (3) Computer Service Division (CSD). NAFSCOB completed 49 years of useful services to
its member banks and the Co-operative Credit Structure.
9.2. Membership in NAFSCOB:
The membership of NAFSCOB is open to all the SCBs in the Republic of India. At present, 31 SCBs are members of
NAFSCOB.
9.3. Membership of NAFSCOB:
a) NAFSCOB is a member of the following national level organisations:
1. National Cooperative Union of India (NCUI), New Delhi
2. Indian Society of Studies in Cooperation (ISSC), Pune
3. National Film and Fine Arts Cooperative Ltd. (NAFFAC), New Delhi
4. Indian Tourism Cooperative Ltd. (COOPTOUR), New Delhi
5. Cooperative Bank of India (COBI), New Delhi
6. Indian Bank's Association (IBA), Mumbai – Associate Member
7. Indian Merchants Chamber (IMC), Mumbai – Associate Member
b) NAFSCOB is a member of the following international organisations:
1. The International Cooperative Alliance (ICA), Geneva, Switzerland
2. International Raiffeisen Union (IRU), Bonn, Germany
3. Asian and Pacific Rural Agricultural Credit Association (APRACA), Bangkok, Thailand.
4. Centre for International Cooperation and Training in agricultural Banking (CICTAB), Pune, India
5. Network for Development of Agricultural Cooperative (NEDAC) in Asia, Bangkok
9.4. Initiatives/Performance of NAFSCOB:
NAFSCOB with its limited resources, both financial and manpower, accomplished its tasks exceedingly
well in achieving the spelt out objectives. While the General Body is the ultimate authority in all
matters relating to NAFSCOB, the affairs of NAFSCOB are managed by the Board of Directors, composed
of the Chairman/President/any member of member SCB/Administrator/ Special Officer or Chief
Executive of the member SCB. The Executive Committee of the NAFSCOB consisting of Chairman, Six
Vice-Chairmen and the Chief Executive of the NAFSCOB, exercises the powers as laid down in the bye-
laws and or as delegated by the Board.
FIFTIETH ANNUAL REPORT
39
9.4.1. Section 80 (P) of Income Tax Act, 1961– NAFSCOB Initiatives:
Since the amendment to the Income Tax Act in 2006-07, NAFSCOB, member SCBs and affiliated DCCBs and other
cooperative banking institutions have been appealing to Govt. of India to restore Section 80 (P) of Income Tax Act,
1961 and maintain the status quo as prior to 2006-07. However, the Union Budget for the year 2013-14 has also
been silent about the restoration of the provisions of Section 80P of Income Tax Act, 1961.
9.4.2. Expert Committee to review the existing Short Term Cooperative Credit Structure (STCCS) – NAFSCOB's
Initiatives:
Chairman, NAFSCOB constituted an internal Committee to peruse the Terms of Reference of the above RBI Expert
Committee and prepare a brief for presentation to the Expert Committee.
The Internal Committee of NAFSCOB sought the views of member SCBs and the affiliated DCCBs on the TOR of the RBI
Expert Committee. The Internal Committee of NAFSCOB held its first meeting on 17 August 2012 in the Office of NAFSCOB
and formulated a course of approach on the same.
Subsequently, NAFSCOB organized an interface meeting with the RBI Expert Committee to present the views and opinion
of the short term cooperative credit structure on the Terms of Reference of the Committee on 09 October 2012 at Mumbai.
lReport of the Expert Committee
The Report of the Expert Committee to examine the three tier STCCS under the Chairmanship of Dr. Prakash
thBakshi,Chairman, NABARD has been submitted to RBI on 15 January 2013. A perusal at few of the most important
recommendations more particularly the following recommendations on few broader issues compelled us to express our
concern and anxiety about the future of the very existence of the STCCS in the country.
i) Recommendation of converting CCBs/SCBs as Urban Cooperative Banks:
The Committee has recommended that 'if a CCB or St.CB consistently under performs and provides less than 15%
share of agricultural credit in the operational area, then that bank should be declared and treated as an urban
cooperative bank'. In this connection it should be noted that the exposure of the DCCBs to agriculture credit is
about 35% of the total assets (It is only 5.6% in the case of Commercial Banks). The DCCBs are also mandated to
issue loans to Handloom sector and other cooperatives. The exposure of these banks to retail and other credit is
very small. The Loan to deposit ratio of these banks is high at 85%.
NAFSCOB
40
The Committee also noted that St.CBs in the NER region as well as smaller states and Union Territories like Delhi,
Goa, Chandigarh, etc. provide insignificant credit to agriculture and are catering to the requirements of only the
urban population .The committee has therefore suggested that these banks be declared and treated as urban
cooperative banks(UCBs). This recommendation does not in any way contribute to the objective in TOR. Assuming
that the banks are declared as UCB how the credit needs of the farmers will be met has not been elaborated. We
may add here that extant guidelines of RBI's to UCBs do not encourage UCBs taking up exposure to
agriculture credit. Therefore the recommendations of converting the DCCBs into UCB does not in any way
help in (a) agricultural credit flow or in (b) reforms of short term credit structure.
ii) PACS as Business Correspondents (Bcs):
The Committee indicated that it would be most appropriate for CCBs to provide the services such as mobilizing
the deposits, issuing of kisan credit cards transactable/working on ATMs and POS devices by directly using PACS
as their BCs. Further the committee says that “all the depositors and borrowers of PACS therefore would become
normal shareholding members of the CCB with voting rights. Functionally, while working as BCs the loaning
operations as well as deposits collection will be carried out by PACS on behalf of CCBs and will be on the books of
CCBs”.
Theoretically this would mean that the Assets and Liabilities of PACS are taken over by DCCBs. This
recommendation will have an adverse implication on the autonomy, independent management of PACS and their
democratic character. This recommendation is nothing but part of the long term strategy of delayering STCCS.
There is no theoretical or analytical input in the report to justify the recommendation. Every committee has to
substantiate its recommendation with facts failing which the recommendation loses its value.
iii) Converting St.CB into Multi-State Federal Cooperative Bank:
The Expert Committee recommended necessary amendments in the Multi-State Cooperative Societies Act, BR
Act, to facilitate conversion of St.CB into a Multi-State Federal Cooperative Bank.
The bifurcation of States and Districts is the prerogative of the State. And every time a bifurcation has taken
place the StCB or DCCB has been correspondingly divided. This will continue to happen as no State would like its
DCCB to be controlled under the provisions of Multi State Cooperative Societies Act.. Thus this recommendation
is also not well thought out.
The consolidation proposal contained in the report is also not practicable unless the Concept of District Central
Coop Bank is revisited.
FIFTIETH ANNUAL REPORT
41
iv) Amendment of Acts:
Any 'liberal' recommendations towards amendment of legislation both State and Central levels should be within ththe framework of Constitution (97 Amendment) Act, 2011.
v) Technology before September 2013:
The Committee has recommended that all coops should adopt Core Banking etc before September 13. Given the
RFP procedures to be adopted and the need to arrange funds, this may take a longer time. We were hoping that
there will be a further recommendation that, NABARD given its huge idle fund base with cost free resources will
be asked to fund the technology initiative.
Therefore, NAFSCOB requested the Governor, RBI to take note of sincere concern with regard to the adverse
implications of the above most important recommendations of the Expert Committee on STCCS.
9.4.3. International Year of Cooperatives - 2012' (IYC-2012) - NAFSCOB Initiatives:
The United Nations (UN) proclaimed the year 2012 as the 'International Year of Cooperatives' (IYC – 2012) to
acknowledge the valuable contributions of cooperatives towards socio-economic development world over and
coined the slogan 'Cooperative Enterprises Build a Better World' to highlight the importance of cooperatives in
the global economy.
a) IYC – 2012 Aimed at:
Øincreasing the public awareness about cooperatives
Øbenefits of cooperatives, creating appropriate awareness about the global network of cooperatives and
their efforts in community building
Ømaintaining democracy and peace
Øpromoting the formation and growth of cooperatives
Øpromoting institutions to address common economic needs and socio-economic empowerment as well as
encouraging Governments and regulatory bodies to establish policies
Ølaws and regulation conducive to formation, growth and prosperity of cooperatives.
All over the world, cooperative institutions/organisations led by International Cooperative Alliance (ICA) have proposed
number of events to celebrate IYC-2012. Indian Cooperative Movement has also proposed various events to celebrate IYC
during the year 2012.
b) NAFSCOB Initiatives:
Pursuant to the decision taken by the Board of Directors of NAFSCOB the following five Regional Seminars on 'Progress,
Problems and Prospects of Short Term Cooperative Credit Structure' organised during IYC-2012:
NAFSCOB
42
(i) southern Region– May 25, 2012 at Hyderabad, Andhra Pradesh
(ii) Eastern Region – July 26, 2012 at Bhubaneswar, Odisha
(iii) North Eastern Region – 14 September, 2012 at Shillong, Meghalaya th(iv) Western Regional Seminar – 20 October, 2012 at Navi Mumbai
th(v) Northern Region – 16 November, 2012 at Chandigarh, Punjab.
c) National Seminar:
Further, as resolved by the Board of Directors in the same meeting, a National Seminar on 'Progress, Problems and
Prospects of Short Term Cooperative Credit Structure' for the rural cooperative credit institutions has been convened on
December 20, 2012 at New Delhi. The National Seminar was inaugurated by Shri Rajendra Kumar Tiwari, IAS, Joint
Secretary (C&C) & Central Registrar of Cooperative Societies, Government of India. The Valedictory function was graced
by Dr. Yoganand Shastri, Hon'ble Speaker, Government of NCT of Delhi and Dr. Prakash Bakshi, Chairman, NABARD.
d) Seminar Coverage:
i) Cooperative Enterprises Build A Better World – Strategies to fulfil the IYC theme
ii) Can Cooperative Build A Better World?
iii) Short Term Cooperative Credit Delivery System – Issues, Problems and Challenges
This includes deliberations on delayering, constitutional amendments, Financial Inclusion, Revised Kisan
Credit Card Scheme, Strategies to improve the share of agricultural lending by cooperatives, etc.
The recommendations of the Regional Seminars have been endorsed by the National Seminar. These recommendations
have been presented during the Valedictory Session.
e) During IYC – 2012, NAFSCOB undertook following activities also:
i. Publication of special office stationary incorporating ICA prescribed emblem and slogan on 'IYC-2012' -
'Cooperative Enterprises Build a Better World' for all official correspondence.
ii. Special publication on 'Growth, Progress and Performance of Short Term Cooperative Credit and Banking
Institutions'.
iii. Presentation of 'IYC-2012 Best Performance Awards' to State Cooperative Banks, District Central thCooperative Banks and Primary Agricultural Credit Societies – was held on 20 December, 2012, New
Delhi.
iv. Four 'IYC – 2012' dedicated quarterly issues of 'NAFSCOB Journal of Rural Cooperative Credit and
Banking' – (i) January – March, 2012, (ii) April – June, 2012, (iii) July – September, 2012 and (iv) October –
December, 2012 were brought out.
v. Invited articles, write-ups, case studies, success stories etc. for publication in the special issue of
'NAFSCOB Journal of Rural Cooperative Credit and Banking'. The theme of articles, write-ups, case
studies, success stories etc. were on 'Cooperative Enterprises Build a Better World'.
vi. IYC Mementoes/Medallions, Yearly calendar etc.
FIFTIETH ANNUAL REPORT
43
9.4.4. NAFSCOB Performance Awards (2008-09 to 2011-12):
a) Best Performance Awards to State Cooperative Banks (SCBs):
NAFSCOB introduced a scheme of Best Performance Awards to its member banks in 1982-83. The
performance awards were intended to promote a meaningful and healthy competition among the
member State Cooperative Banks (SCBs) and provide an impetus to their functioning. In order to
operationalise the scheme of performance awards, the Board of Directors of NAFSCOB, constituted an
independent Jury from time to time to evaluate and recommend Best performance awards on annual
basis. During the year 2012-13, Best Performance Awards to State Cooperative Banks for four years (2008-
09 to 2011-12) have been presented to winning SCBs in Tier III and Tier II separately.
b) Annual Performance Award to the Best Performing Banks Under AIMAS:
thThe Board of Directors of NAFSCOB in their meeting held at Lucknow on 20 December, 1996
among other issues resolved to institute an annual performance award for the Best Performing Bank
under the scheme and therefore constituted a Committee to decide and finalise the criteria for
selection of the Best Performing Bank under the scheme. A separate Committee constituted by the Board
of Directors of NAFSCOB examined the performance of member SCBs under AIMAS and recommended
Performance Awards. Awards of Best Performing Banks under AIMAS (from 2008-09 to 2011-12) have been
presented during 2012-13.
c) Best Performance Awards to District Central Cooperative Banks (DCCBs):
NAFSCOB introduced a scheme of Best Performance Awards to DCCBs from 2008-09 onwards. The
performance awards were intended to promote a meaningful and healthy competition among the DCCBs
and provide an impetus to their functioning. In order to operationalise the scheme of performance
awards, the Board of Directors of NAFSCOB, constituted an independent Jury from time to time to
evaluate and recommend best performance awards on annual basis. Awards under this category have
been presented to winning DCCBs for the years from 2008-09 to 2011-12.
d) Subhash Yadav Award for Best Performing Primary Agricultural Credit Societies (PACS):
NAFSCOB introduced a scheme of Subhash Yadav Award for Best Performing PACS from 1998-99 onwards.
The performance awards were intended to promote a meaningful and healthy competition among the
PACS and provide an impetus to their functioning. In order to operationalise the scheme of performance
awards, the Board of Directors of NAFSCOB, constituted an independent Jury from time to time to
evaluate and recommend best performance awards on annual basis. Subhash Yadav Awards from 2008-09
to 2011-12 have been presented to winning PACS during the year 2012-13. List of award winning PACS,
DCCBs and SCBs are given as below:
NAFSCOB
ii) Overall Best Performance Awards for Best Performing District Central Cooperative Banks
YEAR FIRST PRIZE SECOND PRIZE
2008-09 AADIM JATI SEVA SAHAKARI SAMITI MARYADIT, GOGAWA,DIST. KHARGONE, MADHYA PRADESH
PEDNEM TALUKA FARMERS SERVICE COOPERATIVE SOCIETY LTD., PEDNEM, GOA
2009-10 PURUSOTTAMPUR SERVICE COOPERATIVE SOCIETY LTD., BHORGAI, DIST. BALASORE, ODISHA
NANEOLA PRIMARY AGRICULTURE COOPERATIVE SOCIETY LTD., NANEOLA, DIST. AMBALA, HARYANA
2010-11 RASULPUR MULTIPURPOSE COOPERATIVE AGRI. SERVICE SOCIETY LTD., DIST. LUDHIANA, PUNJAB
KUTHER CAS SOCIETY LIMITED., KUTHER, DIST. KANGRA, HIMACHAL PRADESH
2011-12 THURINJIPATTI PRIMARY AGRICULTURALCREDIT SOCIETY, DIST. DHARMAPURI, TAMIL NADU
KALIYANA SEVA SAHAKARI MANDALI LTD., DIST. AHMEDABAD, GUJARAT
YEAR FIRST PRIZE SECOND PRIZE
2008-09 NAWANSHAHR CENTRAL COOPERATIVE BANK LTD., NAWANSHAHR, PUNJAB
KANGRA CENTRAL COOPERATIVE BANK LTD., DHARMASHALA, KANGRA, HIMACHAL PRADESH
2009-10 SHRI RAJKOT DISTRICT COOPERATIVE BANK LTD., RAJKOT, GUJARAT
JILA SAHAKARI KENDRIYA BANK MYDT., MANDSAUR, MADHYA PRADESH
2010-11 SATARA DISTRICT CENTRAL COOPERATIVE BANK LTD., SATARA, MAHARASHTRA
LUDHIANA CENTRAL COOPERATIVE BANK LTD., LUDHIANA, PUNJAB
2011-12 TIRUCHIRAPALLI DISTRICT CENTRAL COOPERATIVE BANK LTD., TAMIL NADU
SIKAR CENTRAL COOPERATIVE BANK LTD., SIKAR, RAJASTHAN
44
i) Subhash Yadav Award for Best Performing PACS
iii) SCBs – Overall Performance – III Tier:
YEAR FIRST PRIZE SECOND PRIZE
2008-09 The Punjab State Cooperative Bank Ltd.,Chandigarh
The Tamil Nadu State Apex Cooperative Bank Ltd., Chennai
2009-10 The Gujarat State Cooperative Bank Ltd., Ahmedabad
The Punjab State Cooperative Bank Ltd., Chandigarh
2010-11 The Himachal Pradesh State Cooperative Bank Ltd., Shimla
The Gujarat State Cooperative Bank Ltd., Ahmedabad
2011-12
THIRD PRIZE
The Himachal Pradesh State Cooperative Bank Ltd., Shimla
The Tamil Nadu State Apex Cooperative Bank Ltd., Chennai
The Tamil Nadu State Apex Cooperative Bank Ltd., Chennai
The Gujarat State Cooperative Bank Ltd., Ahmedabad
The Tamil Nadu State Apex Cooperative Bank Ltd., Chennai
The Himachal Pradesh State Cooperative Bank Ltd., Shimla
FIFTIETH ANNUAL REPORT
45
iv) SCBs – Overall Performance – II Tier:
YEAR FIRST PRIZE SECOND PRIZE
2008-09 The Andaman & Nicobar State Coop. Bank Ltd., Port Blair
The Meghalaya Cooperative Apex Bank Ltd., Shillong
2009-10 The Andaman & Nicobar State Coop. Bank Ltd., Port Blair
The Sikkim State Cooperative Bank Ltd., Gangtok
2010-11 The Andaman & Nicobar State Coop. Bank Ltd., Port Blair
The Meghalaya Cooperative Apex Bank Ltd., Shillong
2011-12
THIRD PRIZE
The Goa State Cooperative Bank Ltd., Panaji
The Goa State Cooperative Bank Ltd., Panaji
The Goa State Cooperative Bank Ltd., Panaji
The Andaman & Nicobar State Coop. Bank Ltd., Port Blair
The Meghalaya Cooperative Apex Bank Ltd., Shillong
The Goa State Cooperative Bank Ltd., Panaji
v) SCBs – Special Awards – III Tier:
YEAR GROUP
2008-09 GROUP VII- CORPORATE GOVERNANCE & MANAGEMENT PERFORMANCE
2009-10
GROUP VI- PROFITABILITY
GROUP VIII- COMPUTERISATION
SCB
THE GUJARAT STATE COOPERATIVE BANK LTD., AHMEDABAD
THE CHHATTISGARH RAJYA SAHAKARI BANK MARYADIT, RAIPUR
THE HIMACHAL PRADESH STATE COOPERATIVE BANK LTD., SHIMLA
THE HIMACHAL PRADESH STATE COOPERATIVE BANK LTD., SHIMLA
GROUP VII- CORPORATE GOVERNANCE & MANAGEMENT PERFORMANCE
2010-11
GROUP V – COMPLIANCE OF PRUDENTIAL NORMS
GROUP VIII- COMPUTERISATION
THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH
THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH
THE PUNJAB STATE COOPERATIVE BANK LTD., CHANDIGARH
GROUP VI- PROFITABILITY2011-12
NAFSCOB
46
YEAR GROUP
2009-10 GROUP VII- CORPORATE GOVERNANCE & MANAGEMENT PERFORMANCE
GROUP VIII- COMPUTERISATION
SCB
THE DELHI STATE COOPERATIVE BANK LTD., NEW DELHI
THE DELHI STATE COOPERATIVE BANK LTD., NEW DELHI
vi) SCBs – Special Awards – II Tier:
2010-11
YEAR
2008-09 THE TAMIL NADU STATE APEX COOPERATIVE BANK LTD., CHENNAI
FIRST PRIZE
vii) Annual Performance Awards under AIMAS to SCBs:
2009-10 THE TAMIL NADU STATE APEX COOPERATIVE BANK LTD., CHENNAI
2010-11 THE TAMIL NADU STATE APEX COOPERATIVE BANK LTD., CHENNAI
2011-12 THE TAMIL NADU STATE APEX COOPERATIVE BANK LTD., CHENNAI
9.5. Meetings of the Annual General Body, Special General Body, Board of Directors and Executive Committee:
A. Annual General Body:
The Forty Ninth Annual General Body Meeting of the NAFSCOB was held on 27 July 2012 at Bhubaneswar, Orissa.
The General Body in their meeting perused, among others, the following:
i. Approved and adopted the amendments to the Bye-laws of NAFSCOB as recommended by the Board of
Directors of NAFSCOB.
ii. Considered and approved the Auditors' Report and Auditors' Statement of Accounts of NAFSCOB for the
year 2011-2012 and also the Compliance on the Observations made by the Auditors.
iii. Considered and adopted the Forty Ninth Annual Report of NAFSCOB for the year 2011-2012.
iv. Reviewed the work of NAFSCOB and to formulate the programme of activities for the year 2012-2013.
v. Considered and approved the Annual Budget of Income and Expenditure for the year 2012-2013.
vi. Appointed Auditors for the Statutory Audit of Accounts of NAFSCOB for the year 2012-2013 and fix their
remuneration.
FIFTIETH ANNUAL REPORT
47
B. Special General Body:
sti. A Special General Body meeting of NAFSCOB was held on 31 January, 2012 at Mumbai to conduct elections for
the vacant positions of Board of Directors of NAFSCOB.thii. A Special General Body meeting of NAFSCOB was held on 17 November 2012 at Chandigarh to conduct
elections for the vacant positions of Director on the Board of NAFSCOB. thiii. A Special General Body meeting of NAFSCOB was held on 17 February 2013 at Port Blair, Andman & Nicobar
Islands to conduct elections for the vacant positions of Director on the Board of NAFSCOB.
C. Board of Directors:
The Board of Directors of NAFSCOB held their meetings five times during the year from April 01, 2012 to March 31, 2013, as
indicated below:
The meetings of the Board of Directors of NAFSCOB discussed various important policy and operational issues and matters
pertaining to Cooperatives, Cooperation, Rural Credit, Agriculture, Banking etc. to review the status of the short term
cooperative credit structure, and to evolve suitable strategies to address the issues emerging out of various policy
decisions etc. appropriately. The Inter-face meetings of the Board of Directors with the non-members of the Board, viz.
Chairman and the Chief Executives of SCBs were also organised to facilitate effective exchange of views/ideas and
detailed discussions on the listed agenda. Chairman, NABARD and President NCUI have been invited as Special Invitees to
these Meetings. The President, NCUI attended two out of the five meetings as a Special Invitee. Chairman, KRIBHCO
attended one out of five meetings as guest, Chairman, NABARD could not attend the meetings.
Following are some of the important Policy and Operational Issues discussed in the meetings of the Board of Directors
during the year 2012-2013
thl20 April, 2012 at Mumbai : Important Items of Agenda:
i. Highlights of Union Budget for the year 2012-13 and consider its implications.
ii. Issues presented during the Pre-Policy Consultation Meeting convened by the Governor, Reserve Bank of India
on the eve of Monetary Policy 2012-13 on April 03, 2012 at Mumbai.
iii. Report submitted by Indian Institute of Technology, Mumbai to Reserve Bank of India on 'Rationalisation of
charges levied by banks on returned cheques'.
Date
l April 20, 2012
l May 26, 2012
l July 27, 2012
l November 17, 2012
l February 17, 2013
Venue
Mumbai, Maharashtra
Hyderabad, Andhra Pradesh
Bhubaneswar, Odisha
Chandigarh, Punjab
Port Blair, Andaman & Nicobar Islands
NAFSCOB
48
iv. Perused revision in the Bank Rate by Reserve Bank of India.
v. Perused reduction in Cash Reserve Ratio by Reserve Bank of India and its impact on liquidity of State
Cooperative Banks.
vi. Guidelines issued by RBI to RRBs, SCBs and DCCBs with regard to implementation of the provisions of Foreign
Contribution (Regulation) Act, 2010.
vii. Instructions issued by RBI with regard to display the list of unclaimed deposits/inoperative accounts.
viii. Operational guidelines issued by NABARD with regard to Government of India Interest Subvention Scheme for
Short Term crop loans for the year 2011-12 and changes/additions thereon.
ix. Status of implementation of the Revised Revival Package of STCCS as recommended by the Task Force on
Revitalisation of Cooperative Credit Institutions.
x. Status on 'Agricultural Debt Waiver and Debt Relief Scheme 2008' and consider the implications on cooperative
credit institutions.
xi. Status of licence & scheduled status to State Cooperative Banks and District Central Cooperative Banks.
thxii. Gazette Notification on the enactment of 'Constitution (97 Amendment) Act, 2011'.
xiii. Annual Monetary Policy Statement for 2012-13 as announced by Governor, Reserve Bank of India on April 17,
2012.
l26 May 2012 at Hyderabad, Andhra Pradesh : Important Items of Agenda:
i. Highlights of the Economic Survey for the year 2011-12 with particular reference to agriculture and food.
ii. Executive Summary and Summary of Recommendations of the Report of the Nair Committee on Priority Sector
Lending.
iii. Status of Licence & Scheduled status to State Cooperative Banks and District Central Cooperative Banks.
iv. RBI instruction for printing of MICR Code and IFSC Code on Passbook/Statement of Account of the account
holders.
v. Status of implementation of the Revised Revival Package of STCCS as recommended by the Task Force on
Revitalisation of Cooperative Credit Institutions.
vi. Status on 'Agricultural Debt Waiver and Debt Relief Scheme 2008' and consider the implications on cooperative
credit institutions.
vii. Status and issues related to lending short term credit @ 7 per cent including the interest subvention and related
matters.
viii. Executive Summary of the Study on 'Indian Banking 2020 Making the Decade's Promise Come True' by Boston
Consulting Group (BCG).
ix. Proposal for migration of software with regard to publications on Basic Data of SCBs, DCCBs and PACS to new
software.
FIFTIETH ANNUAL REPORT
49
l 27 July 2012 at Bhubaneswar, Odisha : Important Items of Agenda:
i. Amendment to the Guidelines for implementation of Integrated Handlooms Development Scheme to include
Cooperative Banks and Regional Rural Bank as Implementing Agencies.
ii. Mid-Quarter Review of Reserve Bank of India's Monetary Policy for the year 2012-13.
iii. Review by RBI on Conversion of Term Deposits, Daily Deposits or Recurring Deposits for Reinvestment in Term
Deposits by State and Central Cooperative Banks.
iv. Review by RBI with regard to levy of foreclosure charges/pre-payment penalties on Home Loans.
v. RBI instructions with regard to review of Service Charges for Outstation Cheque Collection and cheques
collected under the Speed Clearing arrangement.
vi. RBI guidelines with regard to the Risk Categorisation and Updation of Customer Profiles for effective
implementation of Know Your Customer (KYC)/Anti-Money Laundering (AML)/Combating of Financing of
Terrorism (CFT).
vii. Unique Customer Identification Code (UCIC) for banks' customers in India under Know Your Customer
(KYC)/Anti-Money Laundering (AML)/Combating of Financing of Terrorism (CFT) Guidelines by RBI.
viii. RBI Circular with regard to the measures for strengthening the Regulatory Framework for Unclaimed Deposits.
ix. Revised 'Kisan Credit Card (KCC) Scheme' based on the recommendations of the Working Group set up by RBI.
x. NABARD Policy for the year 2012-13 on Provision of Short Term refinance by NABARD to SCBs for financing
various purposes under Short Term (Others).
xi. Status of licence & scheduled status to State Cooperative Banks and District Central Cooperative Banks.
xii. Status of implementation of the Revival Package of STCCS as recommended by the Task Force on Revitalisation
of Cooperative Credit Institutions.
xiii. Status on 'Agricultural Debt Waiver and Debt Relief Scheme 2008' and consider the implications on cooperative
credit institutions.
xiv. Status and issues related to lending short term credit @ 7 per cent including the interest subvention and related
matter (Presentation by individual SCBs).
xv. NABARD Guidelines for relief measures to farmers affected by natural calamities Conversion of ST (SAO)
loans to medium term loans, for the year 2012-13.
xvi. Problems of Arecanut Growers and consider strategies to overcome them.
xvii. Proposal for implementing customized KYC, AML and CFT software solution in SCBs and DCCBs.
NAFSCOB
50
l17 November 2012 at Chandigarh : Important Items of Agenda:
i Terms of Reference of the Expert Committee constituted by RBI on streamlining of Short Term Cooperative
Credit Structure (STCCS) and the initiatives taken by NAFSCOB.
ii. Second Quarter Review of Monetary Policy for the year 2012-13 by Reserve Bank of India.
iii. Simplified Uniform Savings Bank Account Opening Form' along with a detailed list of KYC documents submitted
by Working Group formed by Department of Financial Services (DFS), Ministry of Finance, Government of India,
for opening of bank accounts by individuals.
iv. Perusal of reduction in Cash Reserve Ratio (CRR) of Scheduled State Cooperative Banks.
v. RBI Circular with regard to modifications in the guidelines on opening of basic banking 'no-frills' accounts under
Financial Inclusion.
vi. RBI instructions with regard to issue of multicity / payable at all branches cheques by Core Banking Solutions
(CBS) enabled banks.
vii. NABARD Circular with regard to changes in the revised KCC Scheme.
viii. RBI Circular advising all RRBs/State and Central Cooperative Banks to initiate submission of reports on the
FINnet Gateway.
ix. Implementation of the recommendations of the Report of the Damodaran Committee on Customer Service in
Banks.
x. RBI instructions with regard to repayment of Term/Fixed Deposits with 'Either or Survivor' or 'Former or
Survivor' mandate.
xi. RBI instructions with regard to offering differential rates of interest on single term deposits of Rs.15 lakh and
above.
xii. RBI Circular with regard to the Standardisation and Enhancement of Security Features in Cheque Forms –
Migrating to CTS 2010 standards.
xiii. Status of licence & scheduled status to State Cooperative Banks and District Central Cooperative Banks.
xiv. Status of implementation of the Revival Package of STCCS as recommended by the Task Force on Revitalisation
of Cooperative Credit Institutions.
xv. Status on 'Agricultural Debt Waiver and Debt Relief Scheme 2008' and consider the implications on cooperative
credit institutions.
xvi. Status and issues related to lending short term credit @ 7 per cent including the interest subvention and
related matter (Presentation by individual SCBs).
xvii. Details of Regional Seminars organised by NAFSCOB during IYC 2012.
xviii. Status of data/response from the member State Cooperative Banks with regard to various scheme of Annual
Performance Awards of NAFSCOB.
FIFTIETH ANNUAL REPORT
51
l17 February 2013 at Port Blair, Andaman & Nicobar Islands : Important Items of Agenda:
i. Mid Quarter Review of the Monetary Policy for the year 2012-13 by Reserve Bank of India.
ii. Modifications in the existing provisions of KYC norms/AML Standards/CFT/Obligation of banks under
Prevention of Money Laundering Act (PMLA), 2002.
iii. Statement of Financial Action Task Force (FATF) on Anti Money Laundering (AML)/Combating of Financing of
Terrorism (CFT) – Standards and the document on 'Improving Global AML/CFT Compliance: on-going process’
iv. National Telecom Policy, 2012 on Migration of current version of Internet Protocol IPv4 to Ipv6.
v. Standardisation and Enhancement of Security Features in Cheque Forms – Migrating to CTS 2010 standards.
vi. RBI Circular with regard to clarifications on the Cooperative Banks (Nomination) Rules, 1985 for bank deposits.
vii. Summary of the Report of the Group constituted by the Ministry of Finance, Department of Financial Services,
Government of India to Standardise Procedures for Valuation of Assets.
viii. Status of Licence & Scheduled status to State Cooperative Banks and District Central Cooperative Banks.
ix. Status of implementation of the Revival Package of STCCS as recommended by the Task Force on Revitalisation
of Cooperative Credit Institutions.
x. Status on 'Agricultural Debt Waiver and Debt Relief Scheme 2008' and consider the implications on cooperative
credit institutions.
xi. Status and issues related to lending short term credit @ 7 per cent including the interest subvention and
related matters (Presentation by individual SCBs).
xii. Proceedings and recommendations of the National Conference on the Constitution (Ninety Seventh
Amendment) Act, 2011 and Impetus to Cooperative Movement convened by NCUI on 12 October 2012 at New
Delhi.
xiii. Organization of National Seminar on 'Progress, Problems and Prospects of Short Term Cooperative Credit
Structure' on December 20, 2012 at New Delhi.
xiv. APRACA CENTRAB Calendar of Activities.
xv. Approval of Banking Laws (Amendment) Bill 2012 by Parliament.
xvi. Circular on Floating Rate Fixed Deposit Scheme by Punjab National Bank.
xvii. Summary & Recommendations of the Expert Committee to examine Three Tier Short Term Cooperative Credit
Structure (ST CCS) constituted by RBI under the Chairmanship of Dr. Prakash Bakshi, Chairman, NABARD/draft
views of NAFSCOB.
NAFSCOB
Chairman Organisation
Dr. Bijender Singh, MLA President, Delhi State Cooperative Bank Ltd., New Delhi
Vice-Chairmen
Shri Ulhas B. Phal Dessai(Western Zone) Since 17-11-2012
ChairmanGoa State Cooperative Bank Ltd., Panaji
Shri Gautam Bora(North-Eastern Zone ) Since 27-07-2012
Chairman,Assam State Cooperative Apex Bank Ltd., Guwahati
Shri Y. Vijayender Reddy(Southern Zone) Till 25-02-2013
Chairman, Andhra Pradesh
Shri Bhagat Singh,(Eastern Zone) Since 17-11-2012
Chairman, Andaman & Nicobar State Cooperative Bank Ltd., Port Blair
Shri. Avtar Singh Zira(Northern Zone) Since 17-02-2013
Chairman,Punjab State Cooperative Bank Ltd.Chandigarh, Punjab
Shri Bhanwar Singh Shekhawat(Central Zone) Since 25-04-2011
Chairman,The Madhya Pradesh Rajya Sahakari Bank Maryadit, Bhopal
Shri B. Subrahmanyam Managing Director,NAFSCOB Navi Mumbai
52
Date Venue
l April 20, 2012
l May 26, 2012
l July 27, 2012
l November 17, 2012
l February 17, 2013
l
l
l Bhubaneswar, Odisha
l Chandigarh, Punjab
l Port Blair, Andaman & Nicobar Islands
Mumbai, Maharashtra
Hyderabad, Andhra Pradesh
xviii. Third-Quarter Review of the Monetary Policy for the year 2012-13 by Reserve Bank of India.
xix. Circular of RBI on modifications to KYC norms/AML Standards/CFT/Obligation of banks under PMLA-2002.
xx. Perusal of reduction in Cash Reserve Ratio (CRR) of SCBs/RRBs.
D. Executive Committee:
The members of Executive Committee met five times during the year 2012-13 as listed below:
9.6. Office Bearers of NAFSCOB as on 31.03.2013 are as follows:
Organisation
FIFTIETH ANNUAL REPORT
Name Status in Committee
Shri B. SubrahmanyamManaging Director, NAFSCOB Chairman
Sl. No
1
Thiru K.M. ThamizharasanSpecial Officer, Tamil Nadu SCB(upto 31.08.2011)
Member2
Shri Vedantham Jagan MohanManaging Director, Andhra Pradesh SCB (Till 30-05-2012)
Member3
Shri G.S. MangatManaging Director, Punjab SCB(up to 19.12.2011)
Member4
Shri T.K. Panda Managing Director, Orissa SCB Member
5
Shri R.S. DahiyaManaging Director, Delhi SCB Member
6
Shri Amit KashayapManaging Director, Himachal Pradesh SCB (from 11.05.2011)
Member7
Shri K. SudhakarDirector, NAFSCOB (up to 29.12.2012) Member-Secretary
8
53
9.7. Grant-in-aid under Central Sector Scheme of Assistance of Govt. of India:
Government of India through the Central Sector Scheme of Assistance assists national level cooperative
organisations for identified schemes and programmes. Under the said scheme NAFSCOB has been receiving grant-
in-aid assistance through the Department of Agriculture and Cooperation, Ministry of Agriculture, Government of
India since 1975 for undertaking proposed specific activities in the Planning, Research and Development Cell with
exception to the years 2003-04, 2004-05 and 2010-11 during which NAFSCOB did not receive the Grant-in-aid
under the said scheme of assistance of Govt. of India. However, the Ministry of Agriculture, Dept. of Agriculture &
Cooperation, Govt. of India has granted an assistance of Rs.16 lakhs for the year 2012-13. The details of grant-in-
aid from the Government of India from the year 1974-75 to 2012-13 are given in Appendix – 13.
9.8. Committees/Working Groups:
A. Committee to organise 'International Year of Cooperatives - 2012' (IYC-2012):
Pursuant to the decision taken by the Board of Directors in their meeting held on 04-12-2010 at
Thiruvananthapuram, Chairman NAFSCOB had constituted a Committee to examine the proposed events, short
list them, prioritise and work out an appropriate strategy to execute them in a time bound and organised manner.
The Composition of the Committee as on 31.12.2012 was as follows:
NAFSCOB
54
B. Advisory Committee on 'All India Mutual Arrangement Scheme (AIMAS)':
Pursuant to the decision taken by the Board of Directors of NAFSCOB in its meeting held on 27.07.2012 at Bhubaneswar,
the Advisory Committee on 'All India Mutual Arrangement Scheme' (AIMAS) was reconstituted. The re-constituted 'Advisory
Committee on AIMAS' as on 27.07.2012 is as follows:
Name Status in Committee
Shri B. Subrahmanyam, Managing Director,NAFSCOB Chairman
Sl. No
1
Thiru M.P. Sivan Arul, Special OfficerTamil Nadu State Apex Cooperative Bank Ltd., Chennai.
Member2
Shri T.K. Panda, Managing DirectorOrissa State Cooperative Bank Ltd., Bhubaneswar
Member3
Shri Pramod Karnad, Managing DirectorMaharashtra State Cooperative Bank Ltd., Mumbai
Member4
Thiru R. Elango, General ManagerPondicherry State Cooperative Bank Ltd., Puducherry
Member5
Shri M.L. Sharma, General ManagerRajasthan State Cooperative Bank Ltd., Jaipur Member
6
Shri K.P. Singh, General ManagerUttar Pradesh Cooperative Bank Ltd., Lucknow Member
7
Shri K. Sudhakar, Director, NAFSCOB (up to 29.12.2012) Member-Secretary
8
C. NAFSCOB Internal Committee to Peruse the Terms of Reference of the RBI Expert Committee:
Chairman, NAFSCOB constituted an internal Committee with the following to peruse the Terms of Reference of the above
RBI Expert Committee and prepare a brief for presentation to the Expert Committee.
Special Invitees
Joint Secretary (C&C), Government of India, Ministry of Agriculture, Department of Agriculture & Cooperation, Government of India, New Delhi or his representative
Special Invitee1
Managing Director, NABARD or his representative
Special Invitee2
Dr. DineshChief Executive, NCUI(from 11.05.2011)
Special Invitee3
FIFTIETH ANNUAL REPORT
55
Name Status in Committee
Shri B. Subrahmanyam, Managing Director, NAFSCOB Chairman
Sl. No
1
Shri Tusarkanti Panda, Managing Director, Orissa SCB
Member2
Shri M.P. Sivan Aurl, Administrator, Tamil Nadu SCB
Member3
Shri M.S. Rama Rao, Managing Director, Andhra Pradesh SCB
Member4
Shri Pramod Karnad, Managing Director, Maharashtra SCB
Member5
Shri Udham Singh, Addl. Managing Director, Punjab SCB
Member6
Shri S.K. Gupta, General Manager, Madhya Pradesh SCB
Member7
Shri K. Sudhakar, Director, NAFSCOB (up to 29.12.2012)
Member - Secretary8
9.9. Managing Director and Officers of NAFSCOB:
Managing Director – Shri B. Subrahmanyam
The details of Officers of NAFSCOB are given in the Appendix – 14.
9.10. Visits under International Education and Exposure Fund (IEEF):
i. Dr. Bijender Singh, MLA, Chairman, NAFSCOB and B. Subrahmanyam, Managing Director, NAFSCOB
attended Regional Forum on Strengthening the Resilience of Smallholder Farmers through Rural Finance th stInnovation and other events during 29 May – 1 June, 2012 in Combodia organised by APRACA.
Subsequently, Shri B. Subrahmanyam attended the General Meeting of APRACA.
ii. A ten member delegation headed by Dr. Bijender Singh, MLA, Chairman, NAFSCOB attended the New
Zealand International Research Conference organised by New Zealand Association for the Study of
Cooperatives and Mutuals at Wellington, New Zealand and visited identified institutions in Sydney in st thAustralia during 21 – 29 June, 2012.
iii. A seven member delegation of NAFSCOB attended 'National Workshop on Financial Inclusion, Role of
Cooperative Banks' organised by COBI during 4-8, October, 2012 in Bangkok.
iv. A three member delegation from Punjab, SCB attended International Summit of Cooperative and Image,
2012 Conference from 06-10-2012 to 11.10.2012 at Quebec, Canada.
v. A twelve member delegation of NAFSCOB attended ICA Extraordinary General Assembly and other events that Manchester and exposure visit to London in United Kingdom from 29 October to 03 November 2012.
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vi. A four member delegation headed by Dr. Bijender Singh MLA, Chairman, NAFSCOB attended ICA-Asia and
th thPacific 10 Regional Assembly , 7 Cooperative Forum during 26-30 November 2012 at Kobe, Japan
9.11. Memorandum/Representation on Important Issues Pertaining to Cooperative Credit and Banking Institutions:
In pursuance of the decisions taken by the Board of Directors, Executive Committee, and other internal
Committees and Working Groups, NAFSCOB carried out number of activities, programmes during the year. As in
the past, NAFSCOB meaningfully represented to the concerned authorities at the highest level on the
implications of various policy initiatives on viability, profitability, professionalization, autonomy, democratic
setup, etc. of the cooperative credit and banking institutions and sought their positive interventions for better
appreciation of the issues. Following is the brief account of the same:
9.12. Representation on the following Issues of Importance was made to the Governor, RBI on the eve of 'Annual
Pre-Policy Consultation Meeting with representatives of Urban Cooperative Banks, Rural Cooperatives and
Micro-finance institutions' for the year 2012-13 on April 03, 2012 held at RBI, Mumbai:
1. Positive impact of reduction in Cash Reserve Ratio (CRR) on the Scheduled State Cooperative Banks and need for
further reduction.
2. Grant of licence to State Cooperative Banks (SCBs) and District Central Cooperative Banks (DCCBs) – Need for
revision in time frame.
3. Need to accord Scheduled Status to all eligible State Cooperative Banks and eligible District Central Cooperative
Banks.
4. Treatment of un-encumbered deposits of UCBs with DCCBs/SCBs as SLR.
5. Maintenance of SLR with SCBs by Urban Banks.
6. Need to extend liquidity Adjustment Facility Scheme to SCBs.
7. Need to extend Marginal Standing Facility (MSF) Scheme to SCBs.
8. Need to allow SCBs for investment in Liquid / Short Term Debt Schemes of Mutual Funds.
9. Need for granting across the board membership in RTGS as well as necessary financial support for upgradation of
related technology to all State Cooperative Banks.
10. Grant of licence to Cooperative Bank of India (COBI) and related issues.
11. Need for revision in the guidelines for implementation of 'Revival, Reform & Restructuring Package for Handloom
Sector'.
12. Need for reduction in the rate of interest on refinance on ST(SAO) by NABARD.
13. Issues related to lending short term agricultural credit @7% and Interest Subvention.
14. Issues related to implementation of the Revised Revival Package for Revitalisation of Cooperative Credit
Institutions.
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57
9.13. Representation on the following Issues of Importance was made to the Governor, RBI on the eve of Second thQuarter Review of Monetary Policy – 2012-13 on 19 October 2012 held at RBI, Mumbai:
The following issues have been presented in addition to the issues raised during the Committee meeting with Governor,
RBI on April 03, 2012.
1. Terms of Reference of RBI Expert Committee on Streamlining of Short Term Cooperative Credit Structure (STCCS).
2. Need for revisiting the exemptions granted by RBI to SCBs and DCCBs from the obligations of maintenance of CRR
under Section 18 of the B.R. Act, 1949 etc.
3. Need for permitting the SCBs and DCCBs to issue Long Term (Subordinated) Deposits (LTDs) to strengthen the
capital base of the short term cooperative credit and banking institutions.
4. Collateral Free Loans – Micro and Small Enterprises (MSEs) – Inclusion of all Cooperative Banks under the ambit of
Credit Guarantee Fund Trust Scheme implemented by SIDBI.
5. Need for revision in Exposure Norms in respect of loans by SCBs and DCCBs for financing individuals and
Companies.
6. Need for enhanced Credit Exposure limit to Housing Finance by SCBs and DCCBs and extending Interest
Subvention for scheme for housing loans extended to all SCBs and DCCBs.
7. Need for New Organisational Device for Cooperative Credit Institutions (CCIs).
9.14. Memorandum on Budget: Proposals for Union Budget for the year 2013-14:
Chairman, NAFSCOB on behalf of the Short Term Cooperative Credit Institutions (STCCI) forwarded a memorandum on
issues of importance to National Cooperative Union of India (NCUI), New Delhi for presentation to Union Finance Minister.
I. Issues related to Income Tax Act, 1961:
1. Section 80P of Income Tax Act, 1961 and Section 36(1)(viia)
2. Non-applicability of Section 43D to Non-Scheduled Cooperative Banks
3. Need for exempting SCBs and DCCBs from the provisions of Section 194A of Income Tax Act, 1961
4. Section 80C(xxi) of Income Tax Act, 1961 – Inclusion of Deposits with Non-Scheduled Cooperative Banks to be
eligible for Tax Deduction
5. Extension of jurisdiction of 'Debt Recovery Tribunals' to cooperative banks
II. Issues related to 'Direct Tax Code Bill, 2010':
1. Deduction of Income of Primary Cooperative Societies – Section 86 of Direct Tax Code Bill, 2010
2. Deductions for Bad & Doubtful Debts – Section 35(3)(c) of the DTC Bill, 2010
3. Tax Deduction at Source (TDS) on Deposits of Members with Cooperative Banks/Credit Societies – Section 195 to
Section 200 of 'DTC Bill, 2010'
4. Provision for exemption on Dividend payments – DTC Bill, 2010
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III. Need for revisiting the issue of lending short term credit @7 per cent and grant of Interest Subvention to
Cooperative Banks.
IV. Need for Increase in the quantum of refinance by NABARD and reduction in the rate of interest on refinance
on ST(SAO) by NABARD:
a) withdrawal of upward revision of interest rate i.e. @4.5% on NABARD ST(SAO) refinance for the year
2012-13.
b) increase in the quantum of NABARD refinance from 45% to 75%.
c) reduce rate of interest on NABARD refinance from the present 4.5% to 2.50%.
V. Need for continuation of the Revival Package of STCCS as recommended by the Task Force on Revitalisation
of Cooperative Credit Institutions
VI. Need for New Organisational Device for Cooperative credit & Banking Institutions.
9.15. Implementation of the Government Policy regarding usage of Hindi in the office of NAFSCOB:
As per the directives of Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India,
on the implementation of the policy regarding usage of Hindi in the office of NAFSCOB, following steps have been
initiated / taken:
'
i. Hindi Advisory Committee' has been constituted in NAFSCOB with effect from April 1992 to coordinate the
activities in connection with the usage of Hindi in office administration. The committee is entrusted with
the responsibility of widening the scope of usage of Hindi in the office administration, member SCBs and
their constituents.
ii. The sign board of the NAFSCOB have been depicted both in English and Hindi languages. However, these
sign board have been removed by the Cooperative Housing Society, in which the NAFSCOB is located.
iii. The rubber stamp depicting the designation of the functionaries in the NAFSCOB have also been made in
Hindi.
iv. The brochure about the aims, activities and achievements of the NAFSCOB was translated in Hindi and
sent to the member SCBs and Govt. of India.
v. The letters received in Hindi from Govt. of India, member SCBs and DCCBs are replied in Hindi to the
possible extent.
vi. The Annual Report and Audit Report along with the statement of Accounts of NAFSCOB is translated in
Hindi and copies of the same submitted to Govt. of India.
vii. The 'Hindi Advisory Committee' met from time to time to discuss the future plan of action in connection
with usage of Hindi in NAFSCOB.
viii. NAFSCOB has made an appeal in Hindi to contribute articles in Hindi for Publication in NAFSCOB
JOURNAL.
ix. Advertisements in Hindi are also published in NAFSCOB BULLETIN. NAFSCOB started a separate 'Hindi
Section' in 'NAFSCOB BULLETIN'.
x. A booklet on performance of Short Term Cooperative Credit Institutions in Hindi has been published.
xi. NAFSCOB celebrated 'Hindi Day' under the auspices of “Hindi Advisory Committee”.
xii. Steps are being initiated to take up more activities for implementation of usage of Hindi in office
correspondence.
FIFTIETH ANNUAL REPORT
59
Classification of Participant Banks Number of Participant Banks
31-03-2012
Sl. No
State Cooperative Banks (SCBs) 261
31-03-2013
26
Branches of SCBs 3212 324
District Central Coop. Banks (DCCBs) 2013 200
Branches of DCCBs 4734 471
Urban Coop. Banks (UCBs) 945 93
Branches of UCB 736 70
Total 1188 1184
10. All India Mutual Arrangement Scheme (AIMAS):
The 'All India Mutual Arrangement Scheme' (AIMAS) was operationalised by NAFSCOB in 1965. Shri T. T.
Krishnamachari, the then Hon'ble Union Finance Minister inaugurated AIMAS on August 21, 1965, in Mumbai.
The primary objective of AIMAS is to facilitate the participant banks throughout the country to undertake the
following banking business:
i. Issue and Honour MICR and Non-MICR Demand Drafts
ii. Issue and Honour Mail Transfers
iii. Collection and Payment of Bills, Dividend Warrants etc.
The scheme has a membership of 1184 banks comprising of State Cooperative Banks and their branches, District
Central Cooperative Banks and their branches and Urban Cooperative Banks and their branches as on March 31,
2013. NAFSCOB formulates rules and regulations regarding working of AIMAS and issues all necessary guidelines on
functioning of AIMAS, in consultation with the Advisory Committee. The services extended by NAFSCOB includes
providing operational guidelines, membership admission of cooperative banks/bank offices, cancellation of
membership, circulation of Specimen Signatures of Authorised Officers, supply of MICR and Non-MICR Demand
Draft Books, preparation/updation and supply of Directory of member participant banks, devising and supply of
Confidential Key Numbers periodically, for facilitating the member banks to work out appropriate Cypher Code
etc.
10.1. Membership and Classification of Banks under AIMAS:
The total number of participant banks under AIMAS was 1184 as on March 31, 2013 and the classification is furnished
below:
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10.2. Challenges under AIMAS:
Though there is a perceptible change in the performance of the member banks under AIMAS, few of the member
banks are yet to realise the need and importance of timely reconciliation of accounts, use of Cypher Code,
prompt despatch of the relevant advices, timely despatch of Current Account Statements, restraining from
dishonouring Demand Drafts on flimsy grounds, updation of Specimen Signatures etc. The member banks need to
adhere to the guidelines of AIMAS for efficient and smooth functioning of AIMAS. With the introduction of 'New
Indian Payment System', AIMAS need to go online and the member banks need to facilitate the same with
computerisation of their operations. The advantages available under AIMAS are yet to be fully availed by member
SCBs. With the advent of new payment system and many of the banks transacting their receipts and payments
through RTGS and NEFT, the demand for physical banking instruments such as Demand Drafts, Cheques, etc. are
on the reducing trend. AIMAS which uses sector specific Demand Drafts is not an exception to the same. Further,
introduction of CTS-2010 standard cheques will also certainly add to the constraints of AIMAS and its functioning.
NAFSCOB is proud that AIMAS has served its members well during the last almost four decades in ensuring a
country wide receipt and payment mechanism when there was no RTGS and/or NEFT and banks had to depend on
payments through cheques or demand drafts of commercial banks. In order to face the competition, AIMAS needs
to modernise its operations to enable the members to have online payment facilities, make efforts to migrate to
CTS-2010 standard cheques and extent better customer services.
As a result of the new systems such as computerization, online banking operations by both private/nationalized
commercial banks, RTGS, NEFT, CBS, etc. on the functioning of AIMAS, a gradual decrease in the usage of demand
drafts under AIMAS has been observed. Further, introduction of CTS-2010 Standard cheques certainly will add to
the constraints of AIMAS and its functioning. Therefore, there is need to initiate steps for strengthening of AIMAS
and/or redefine the future of AIMAS. NAFSCOB moves in this direction.
10.3. Dissemination of information in Soft Copy format:
NAFSCOB makes available various documents under AIMAS for the use by member SCBs of the 'All India Mutual
Arrangement Scheme (AIMAS) in hard copy format. In order to facilitate the member banks wherever the
operations have been Computerised, NAFSCOB also supplies various documents/publications etc. in the form of
Compact Discs as well as through E-mail etc. to all members AIMAS through State Cooperative Banks. These
documents are as follows:
i. Directory of Members' under AIMAS.
ii. Compendium of Specimen Signatures of authorised officers under AIMAS.
iii. Cypher Code System' under AIMAS.
iv. Operational Manual on AIMAS'.
v. List of new Admissions and withdrawals of the members under AIMAS.'
vi. Policy Circulars under AIMAS.
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11. Planning, Research and Development (PRD) Cell:
NAFSCOB prepared the following Study Reports/Publications and Papers on important aspects/issues concerning
the operations of Short Term Cooperative Credit Structure in 2012-2013 (i.e. April 1, 2012 to March 31, 2013).
i. Review of disbursement of short term agricultural loans for Rabi and Kharif Crops: 2012-13'.
ii. Basic Data on Performance of State Cooperative Banks: 2011-12'.
iii. Basic Data on Performance of District Central Cooperative Banks: 2011-12'.
iv. Basic Data on Performance of Primary Agricultural Credit Societies: 2011-12'.
v. Directory of District Central Cooperative Banks in India – 2012-13.
vi. NAFSCOB Journal of Rural Cooperative Credit and Banking' (Quarterly Journal – April – June, 2012, July –
September, 2012 October – December, 2012 & January-March, 2013).
vii. Directory of State Cooperative Banks in India' (Quarterly).
viii. RBI Governor's Pre-Policy Consultation Meeting with UCBs, Rural Cooperatives and Micro-Finance
Institutions – Memorandum on Issues.
ix. Operational Manual Volume – I: Manual on Branches and Banking Operations (Revised Draft).
x. Operational Manual Volume – II: Manual on Functions of Head Office (Revised Draft).
xi. Operational Manual Volume – III: Manual on Loans and Advances – Part –I & Part-II (Revised Draft).
xii. Operational Manual Volume – IV: Manual on Inspection and Internal Audit (Revised Draft).
xiii. Memorandum to Hon'ble Union Finance Minister – Pre – Budget Consultations -2012-13 – forwarded
through NCUI, New Delhi.
xiv. The Orientation Programme to the Chairman and Board of Directors of Punjab State Cooperative Bank –
Background Papers.
xv. Second Quarter Review of the Monetary Policy – 2012-13 on 19th October 2012– Memorandum on Issues.
xvi. Indian Cooperative Banks and Global Financial Crisis – A Paper
xvii. A Brief Report on International Cooperative Research Conference at Wellington and study visit to
Australia.
xviii. Financial Inclusion and Cooperative Banks – A Paper.
xix. Short Term Cooperative Credit Institutions: Building a Better World- A Paper.
xx. Southern Regional Seminar - 'Progress, Problems and Prospects of Short Term Cooperative Credit
Structure' organised by NAFSCOB under International Year of Cooperatives – 2012 (IYC - 2012) at
Hyderabad- Background Papers.
xxi. North East Regional Seminar – “Progress, Problems and Prospects of Short Term Cooperative Credit
Structure” under IYC - 2012 at Shillong- Background Papers.
xxii. Interface Meeting with State Cooperative Banks and RBI Expert Committee on Streamlining of STCCS -
Background Papers.
xxiii. Western Regional Seminar –“Progress, Problems and Prospects of Short Term Cooperative Credit
Structure” under IYC-2012 at Navi Mumbai- Background Papers.
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xxiv. Northern Regional Seminar (co-hosted by Punjab SCB) –“Progress, Problems and Prospects of Short Term
Cooperative Credit Structure” under IYC-2012 at Chandigarh- Background Papers.
xxv. National Seminar –“Progress, Problems and Prospects of Short Term Cooperative Credit Structure” under
IYC-2012 at New Delhi- Background Papers.
xxvi. Constitution (111th Amendment) Bill, 2009 –IYC-2012 background material.
xxvii. Rural Cooperative Credit Delivery & Banking Institutions: Towards Building a Better World - IYC-2012
background material.
xxviii. NAFSCOB Performance Awards at a Glance – 1982-83 to 2011-12 – Background material.
xxix. Performance Indicators of Short Term Cooperative Credit Institutions – IYC-2012- Background material.
xxx. Regional Seminars (05) on 'Progress, Problems and Prospects of Short Term Cooperative Credit Structure -
IYC-2012 – Summary of Recommendations.
xxxi. National Seminar on 'Progress, Problems and Prospects of Short Term Cooperative Credit Structure -IYC-
2012 – Recommendations.
12. Conferences, Seminars, Workshops and Meetings:
NAFSCOB organised the following Conferences/ Workshops/ Seminars/Meetings during the year 2012-13:
i. Orientation Programme to the Chairman and Board of Directors of Punjab State Cooperative Bank was
held during 09-13, April, 2012 at Alappuzha (Alleppy), Kerala.
ii. Southern Regional Seminar - 'Progress, Problems and Prospects of Short Term Cooperative Credit
thStructure' organised by NAFSCOB under IYC-2012 on 25 May, 2012 at Hyderabad.
iii. Eastern Regional Seminar – “Progress, Problems and Prospects of Short Term Cooperative Credit
thStructure” under International Year of Cooperatives – 2012 (IYC - 2012) on 26 July, 2012 at Bhubaneswar,
Odisha.
iv. The meeting of the committee constituted by NAFSCOB to examine the Terms of the Reference of the RBI
thexpert committee on Streamlining of STCCS held on 17 August, 2012 in the office of NAFSCOB, Navi
Mumbai to prepare a brief presentation to the members of the expert committee constituted by RBI.
v. The committee constituted by NAFSCOB to examine the terms of the reference the RBI expert committee
thon Streamlining of STCCS held meeting on 17 August, 2012 in the office of NAFSCOB, Navi Mumbai to
identify the issues emerging out of various policy initiatives of the Government of India, RBI, NABARD etc.
which have implications on the smooth functioning of STCCS.
vi. Organised meeting in collaboration with M/S. Jocata Financial Advisory & Technology for the selected
Chairmen and Managing Directors of the member SCBs to discuss the issues pertaining to costing of the
proposal of M/S. Jocata for implementation of customised KYC, AML and CFT software solutions in SCBs
and DCCBs on 12-09-2012 at Calcatta.
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63
vii. Organised the North East Regional Seminar – “Progress, Problems and Prospects of Short Term
thCooperative Credit Structure” under International Year of Cooperatives – 2012 (IYC - 2012) on 14
September, 2012 at Shillong, Meghalaya.
viii. Organised Interface Meeting with State Cooperative Banks and RBI Expert Committee on Streamlining of
STCCS on 09-12-2012 in Mumbai.
ix. Organised Western Regional Seminar –“Progress, Problems and Prospects of Short Term Cooperative
Credit Structure” under International Year of Cooperatives – 2012 (IYC-2012) on 20-10-2012 at Navi
Mumbai.
x. Organised Northern Regional Seminar –“Progress, Problems and Prospects of Short Term Cooperative
Credit Structure” under International Year of Cooperatives – 2012 (IYC-2012) on 16-11-2012 at
Chandigarh.
xi. Organised National Seminar –“Progress, Problems and Prospects of Short Term Cooperative Credit
Structure” under International Year of Cooperatives – 2012 (IYC-2012) on 20-12-2012 at New Delhi.
13. 'NAFSCOB Journal of Rural Cooperative Credit and Banking':
NAFSCOB brings out a quarterly journal entitled 'NAFSCOB Journal of Rural Cooperative Credit and Banking'
containing special features/articles, case studies, information/data etc. on cooperative credit and banking
sector. NAFSCOB has been making efforts to improve the quality of presentation and contents of the journal on
various issues related to Cooperative Credit Institutions. 'NAFSCOB Journal of Rural Cooperative Credit and
Banking' also provides opportunities to the member banks, various other cooperative organisations and also the
cooperative researchers etc. to disseminate information on their performance, findings, innovative banking
practices and innovations in the banking sector, etc. The said journal contains the features such as (i) Editorial,
(ii) Articles, (iii) Cooperation Abroad, (iv) Special Features, (v) Reports, (vi) Profile of SCBs/DCCBs, (vii)
Recommendations of working groups/committees, etc. (viii) Memorandums, (ix) RBI/NABARD Circulars, (x)
Meetings of the Board of Directors and issues deliberated, (xi) NAFSCOB Events, (xii) Executive Diary, (xiii) News
from Member Banks ,(xiv) Statistics, (xv) Articles/features in Hindi, etc.
SCBs, DCCBs, UCBs & various national level cooperative organisations extend support through advertisements to
disseminate their activities through the 'NAFSCOB Journal of Rural Cooperative Credit and Banking'. The
response to the said journal from the member SCBs as well as DCCBs and other cooperative organisations etc.
during the year was encouraging. NAFSCOB also has introduced a scheme to provide honorarium to the authors of
the articles/write-ups selected for publication in the 'NAFSCOB Journal of Rural Cooperative Credit and
Banking'.
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Following Special Features/Articles/Reports were published in 'NAFSCOB Journal of Rural Cooperative Credit and Banking'
during the year 2012-2013:
i. Status of Implementation of Revival Package of Short Term Cooperatives Credit Structure.
ii. Role of Cooperative Banks in Self Help Group Bank Linkage.
iii. IYC – 2012 – Southern Regional Seminar – 'Progress, Problems and Prospects of Short Term Cooperative Credit
Structure' held on 25th May, 2012 at Hyderabad.
iv. Joint Declaration of the 9th Cooperative Minister's Conference…
v. Message from President and Director General (ICA).
vi. Message of the International Cooperative Alliance (ICA).
vii. Gazette Notification Issued by the Ministry of Agriculture, Department of Agriculture & Cooperation, Government
of India on the enactment of 'Constitution (97th Amendment) Act, 2011.
viii. Summary and Recommendations of the Report of the Nair Committee on Priority Sector Lending.
ix. Performance of Short Term Cooperative Credit Structure – 2000-2001 to 2009-2011.
x. Agricultural Credit Delivery System through Cooperatives in Maharashtra: A Region-wise Analysis.
xi. IYC – 2012 – Eastern Regional Seminar – “Progress, Problems and Prospects of Short Term Cooperative Credit
Structure” under International Year of Cooperatives – 2012 (IYC - 2012) on 26th July, 2012 at Bhubaneswar,
Odisha.
xii. Building a Better World through Cooperative Endeavour – The Odisha initiatives - Achievements and Commitments
under IYC – 2012.
xiii. North East Regional Seminar – “Progress, Problems and Prospects of Short Term Cooperative Credit Structure”
under International Year of Cooperatives – 2012 (IYC - 2012) on 14th September, 2012 at Shillong, Meghalaya
xiv. Implications of Task Force on Short Term Cooperative Credit Structure (STCCS) - An Overview.
xv. Short Term Cooperative Credit Structure (STCCS) of India – A way forward.
xvi. Cooperative Enterprises Build A Better World – Strategies to fulfill the IYC theme.
xvii. Rural Cooperative Credit Delivery & Banking Institutions: Towards Building A Better World.
xviii. Can cooperative Enterprises Build a Better India?.
xix. Financial Inclusion: Cooperative Banks.
xx. Need for Institutional Protection System (IPS) in Short Term Cooperative Credit Institutions.
xxi. Strategies for Implementing KYC & AML Policy for SCBs and DCCBs.
xxii. Cooperative Enterprises Build a Better World: Development Strategies in Post-Revival Package Era for Short Term
Cooperative Credit Structure.
xxiii. Developmental Issues of Cooperative Banks.
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xxiv. Draft Blueprint for a Co-operative Decade Launched at Co-operatives United at Manchester, United
Kingdom, 31st October, 2012.
xxv. Regional and National Seminars on Progress, Problems and Prospects of Short Term Cooperative Credit
Structure – Summary of Recommendations.
xxvi. NAFSCOB Performance Awards at a Glance – 1982-83 to 2011-12.
xxvii. Leveraging Cooperative Advantage – An Extract from Inaugural address by Dr. D. Subbarao, Governor, RBI.
xxviii. Perspectives on Cooperation.
xxix. NAFSCOB Hindi Divas – 14th September 2012 (Hindi).
xxx. 59th All India Cooperative Week Celebration – Message.
xxxi. International Women's Day – Message from Dame Pauline Green, President, ICA and the ICA Gender Equality
Committee Chair – Maria Eugenia Perez Zea.
xxxii. Analytical Editorials on different subjects.
14. Computerisation in NAFSCOB:
Major operations of NAFSCOB have been computerised. NAFSCOB also has the credit for organising first ever
exposure and orientation programme on computerisation for the benefit of SCBs and DCCBs. NAFSCOB has
its own roadmap for expansion of its activities through computerisation. During the year, NAFSCOB initiated
the proposal of migration from software of Visual Basic + Microsoft Access + Crystal Reports with regard to
publication on Basic Data of SCBs, DCCBs and PACS to new software enabled with hosted, scalable web based
application that will allow SCBs, DCCBs and PACS to directly input data into the system for analysis and
reporting.
NAFSCOB has identified its IT requirements and contemplated to computerise the following main six activities:
i. Performance Monitoring of SCBs/DCCBs/PACS.
ii. Planning, Research & Development (PRD) Cell Activities and Statistics.
iii. All India Mutual Arrangement Scheme (AIMAS).
iv. Library Information System.
v. Accounting and Pay Roll.
vi. General Administration.
Accordingly, a system consisting of multi-user networking environment has been installed and all the officers in
NAFSCOB have been provided with computers to carry out their day-to-day work. NAFSCOB reviewed the existing
hardware and the software as well as the requirements of upgrading the computer system in the office of NAFSCOB.
Accordingly, latest Lenova Commercial Desk Tops with latest processor along with MS- Office software and Operating
System Windows-2007 were installed.
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66
14.1. Dissemination of Information in the form of Compact Disc in lieu of Hard Copy:
NAFSCOB has adopted the practice of making available the soft copy of the following documents for the use by the
member SCBs and others:
i. Directory of members under AIMAS
ii. Specimen Signatures of Authorised Officers under AIMAS
iii. Cypher Code System under AIMAS
iv. Operational Manual on AIMAS
v. List of newly admitted members/withdrawals of members under AIMAS
vi. Basic Data on performance of SCBs/DCCBs/PACS
vii. Directory of SCBs/DCCBs
However, Publications such as Directory of State Cooperative Banks, Directory of members under AIMAS,
Compendium of Specimen Signatures, Handbook on Cypher Code, Operational Manual on AIMAS etc. are also
supplied in the form of hard copies.
15. Representation and Participation:
Chairman and Managing Director of NAFSCOB in their respective capacities have been nominated on various
committees. They attended the meetings of these committees during the year under review.
15.1. Chairman:
Dr. Bijender Singh, MLA, Chairman, NAFSCOB who is also the Member of Legislative Assembly, New Delhi
represents NAFSCOB on the General Body/Board of Directors/Governing Council of the following
national/international level organisations:
I. National Cooperative Union of India (NCUI), New Delhi.
ii. National Cooperative Development Corporation (NCDC), New Delhi.
iii. Cooperative Bank of India (COBI), New Delhi
iv. Indian Tourism Cooperative Ltd. (COOPTOUR), New Delhi.
v. National Film & Fine Arts Coop. Ltd., (NAFFAC), New Delhi.
vi. International Cooperative Alliance (ICA), Geneva, Switzerland
vii. International Raiffeisen Union (IRU), Bonn, Germany
Apart from the above, Chairman, NAFSCOB is also the Chairman of NAFED, member on the Governing
Council of NCUI and Director of NCCF & KRIBHCO.
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15.2. Chairman, NAFSCOB attended the following Meetings / Seminars / Conferences / Workshops and Programmes
during April 1, 2012 to March 31, 2013.
i. Dr. Bijender Singh, MLA, Chairman, NAFSCOB attended RBI Governor's Pre Policy Consultation Meeting on
rd'Annual Policy Statement 2012-13 at RBI Central Office, Mumbai on 3 April, 2012.
thii. Dr. Bijender Singh, MLA, Chairman, NAFSCOB attended the meeting of the Board of COBI held on 24 April,
2012 at New Delhi.
thiii. Dr. Bijender Singh, MLA, Chairman, NAFSCOB attended the 159 meeting of the Governing Council of
thNCUI held on 24 May, 2012, New Delhi.
iv. Dr. Bijender Singh, MLA, Chairman graced the Eastern Regional Seminar – “Progress, Problems and
Prospects of Short Term Cooperative Credit Structure” under International Year of Cooperatives – 2012
th(IYC - 2012) on 26 July, 2012 at Bhubaneswar, Odisha.
thv. Dr. Bijender Singh, MLA, Chairman, NAFSCOB attended 9 Annual General Body Meeting of the
stCooperative Bank of India (COBI) on 21 September, 2012 at New Delhi.
thvi. Dr. Bijender Singh, MLA, Chairman, NAFSCOB attended 69 Meeting of the Board of Directors of the COBI
thon 25 September, 2012 at New Delhi.
vii. Dr. Bijender Singh, MLA, Chairman, NAFSCOB attended Annual General Body Meeting of the National Film
thand Fine Arts Cooperative Ltd. on 25 September, 2012 at New Delhi.
viii. Dr. Bijender Singh MLA, Chairman, NAFSCOB attended 'National Conference on the Constitution (Ninety
thSeventh Amendment) Act, 2011' organised by NCUI on 12 October, 2012.
ix. Dr. Bijender Singh MLA, Chairman, NAFSCOB attended the Governing Council Meeting of National
Cooperative Union of India (NCUI) on 19-12-2012 at New Delhi.
x. Dr. Bijender Singh MLA, Chairman, NAFSCOB attended Meeting of Board of Directors of Co-operative Bank
of India (COBI) on 19-12-2012 at New Delhi.
xi. Dr. Bijender Singh MLA, Chairman, NAFSCOB graced National Seminar –“Progress, Problems and Prospects
of Short Term Cooperative Credit Structure” under International Year of Cooperatives – 2012 (IYC-2012)
on 20-12-2012 at New Delhi.
15.3. Managing Director:
Shri B. Subrahmanyam, Managing Director, NAFSCOB represents NAFSCOB in the following
national/international level organisations:
1. Member, Advisory Committee, College of Agricultural Banking (CAB), Pune.
2. Member, National Implementation, Monitoring and Review Committee (NIMC) under Scheme for Revival, Reform &
Restructuring of Handloom Sector, GoI.
3. Sub-Committee set up by Cooperative Bank of India (COBI).
4. Asia and Pacific Rural and Agricultural Credit Association (APRACA), Bangkok.
NAFSCOB
68
5. Network for Development of Agriculture Cooperatives (NEDAC), Bangkok.
6. Regional Cooperative Banking Association (RCBA), New Delhi.
7. Member, 'Accreditation Board' for Accreditation of 'Cooperative Training Institutes' (CTIs) by C-PEC, BIRD, Lucknow.
15.4. Shri B. Subrahmanyam, Managing Director, NAFSCOB attended the following Meetings / Seminars /
Conferences / Workshops and Programmes during April 1, 2012 to March 31, 2013:
1. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended RBI Governor's Pre Policy Consultation Meeting on
rd'Annual Policy Statement 2012-13 at RBI Central Office, Mumbai on 3 April, 2012.
th2. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended 4 Meeting of the National Implementation,
Monitoring and Review Committee of Scheme for Revival, Reform and Restructuring of Handloom sector on
18.04.2012 at New Delhi.
3. Shri. B. Subrahmanyam, Managing Director, NAFSCOB organised the Southern Regional Seminar - 'Progress,
Problems and Prospects of Short Term Cooperative Credit Structure' organised by NAFSCOB as part of IYC-2012
thevents on 25 May, 2012 at Hyderabad.
4. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended Regional Forum on Strengthening the Resilience of
th stSmallholder Farmers through Rural Finance Innovation and other events during 29 May – 1 June, 2012 in
Combodia organised by APRACA.
st5. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the 51 Meeting of the College Advisory Committee
th(CAC) of RBI College of Agricultural Banking (CAB) on 9 June, 2012.
6. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the New Zealand International Research
Conference organised by New Zealand Association for the Study of Cooperatives and Mutuals at Wellington, New
st thZealand and visited identified institutions in Sydney in Australia during 21 – 29 June, 2012. He also made a
presentation on 'Indian Cooperative Banks and Global Financial Crisis' in the International Cooperative Research
Conference held on 23.06.2012 in Wellington, New Zealand.
7. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended Sub-Committee Meeting of Technical Assistance
Project of IFC/RABO Bank Committee Constituted by Board of Management of APCOB convened on 2-8-2012 at
APCOB, Hyderabad.
8. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the opening ceremony of 'IFC & APCOB Programme
for improved Agri-Finance' on 3-08-2012 at Hotel Taj Krishna, Hyderabad.
9. Shri. B. Subrahmanyam, Managing Director, NAFSCOB organised Eastern Regional Seminar – “Progress, Problems
thand Prospects of Short Term Cooperative Credit Structure” as part of IYC-2012 events on 26 July, 2012 at
Bhubaneswar, Odisha.
FIFTIETH ANNUAL REPORT
69
10. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the meeting of the committee constituted by
NAFSCOB to examine the Terms of the Reference of the RBI expert committee on Streamlining of STCCS held on
th17 August, 2012 in the office of NAFSCOB, Navi Mumbai to prepare a brief presentation to the members of the
expert committee constituted by RBI.
11. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the meeting of the committee constituted by
NAFSCOB to examine the terms of the reference the RBI expert committee on Streamlining of STCCS held meeting
thon 17 August, 2012 in the office of NAFSCOB, Navi Mumbai to identify the issue emerging out of various policy
initiatives of the Government of India, RBI, NABARD etc. which have implications on the smooth functioning of
STCCS.
12. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the meeting organised in collaboration with M/S.
Jocata Financial Advisory & Technology for the selected Chairmen and Managing Directors of the member SCBs to
discuss the issues pertaining to costing of the proposal of M/S. Jocata for implementation of customised KYC, AML
and CFT software solutions in SCBs and DCCBs on 12-09-2012 at Calcatta.
13. Shri. B. Subrahmanyam, Managing Director, NAFSCOB organised the North East Regional Seminar – “Progress,
thProblems and Prospects of Short Term Cooperative Credit Structure” as part of IYC-2012 events on 14 September,
2012 at Shillong, Meghalaya.
14. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the meeting arranged by the Delhi State
Cooperative Bank on 25-09-2012 to discuss the issues related to 'KYC/AML and CFT software solutions'. M/S.
Jocata Financial Advisory & Technology presented the issues for the Vice-Chairman, Managing Director, BoD and
staff of the Delhi State Cooperative Bank.
15. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended 'National Workshop on Financial Inclusion, Role of
Cooperative Banks' organised by COBI during 4-8, October, 2012 in Bangkok.
16. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended 'National Conference on the Constitution (Ninety
thSeventh Amendment) Act, 2011' organised by NCUI on 12 October, 2012.
17. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended the Second Quarter Review of RBI's Annual
Monetary Policy- 2012-13 convened by Governor, RBI with UCBs, Rural Cooperatives & Micro-Finance Institutions
on 19th October, 2012 at Mumbai.
18. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended ICA Extraordinary General Assembly and other
thevents at Manchester and visit to London in United Kingdom from 29 October to 03 November 2012 under IEEF.
th th19. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended ICA-Asia and Pacific 10 Regional Assembly , 7
Cooperative Forum during 26-30 November 2012 at Kobe, Japan.
20. Shri. B. Subrahmanyam, Managing Director, NAFSCOB organised the Western Regional Seminar –“Progress,
Problems and Prospects of Short Term Cooperative Credit Structure” as part of IYC-2012 events on 20-10-2012 at
Navi Mumbai.
NAFSCOB
70
21. Shri. B. Subrahmanyam, Managing Director, NAFSCOB organised the Northern Regional Seminar –“Progress,
Problems and Prospects of Short Term Cooperative Credit Structure” as part of IYC-2012 events on 16-11-2012 at
Chandigarh.
22. Shri. B. Subrahmanyam, Managing Director, NAFSCOB attended Interface Meeting with State Cooperative Banks
and RBI Expert Committee on Streamlining of STCCS on 09-12-2012 in Mumbai organised by NAFSCOB.
23. Shri. B. Subrahmanyam, Managing Director, NAFSCOB organised the National Seminar –“Progress, Problems and
Prospects of Short Term Cooperative Credit Structure” as part of IYC-2012 events on 20-12-2012 at New Delhi.
16. Accounts and Finance:
The Statutory Audit of the NAFSCOB Accounts for the year ended March 31, 2013 was conducted by M/s.
Contractor, Nayak & Kishnadwala, Chartered Accounts, Mumbai. The Audited Statement of Accounts for the year
ended March 31, 2013 and the Audit Report are presented separately.
The comparative position of 'Assets & Liabilities' and 'Income & Expenditure' for the year ended March 31, 2012
and March 31, 2013 are given in the following tables:
LIABILITIES As on
31.03.2013 31.03.2012
ASSETS As on
31.03.2013 31.03.2012
Reserve and other Funds
439.93 438.55 Cash and Bank Balance
20.35 9.88
International Education and Exposure Fund
99.62 82.55 Investments 325.53 306.61
Current Liabilities & Provision
32.69 10.62 Interest Accrued and Outstanding
7.49 11.40
Fixed Assets 37.27 42.05
AIMAS Stock 3.05 3.36
Welfare Fund 14.30 12.90
Subash Yadav Awards for PACS'
1.00 1.00
Advance, Deposit & AIMAS Dues
3.00 7.83
International Education and Exposure Fund
99.50 82.00
Income & Expenditure A/c
60.75 54.69
Total 572.24 531.72 Total 572.24 531.72
(Rs. in lakhs)
ASSETS & LIABILITIES
FIFTIETH ANNUAL REPORT
71
ParticularsSl. No
1
2012-13 2011-12 Variations
58.4873.6941.12
43.0051.7044.51
Cost of Management:a) Salariesb) P.R.D. Cell Accountc)Administrative & Other Expenses
+ 15.48+ 21.99
-3.39
2 Membership Fees 5.90 6.09 - 0.19
3 Workshops/Conferences/Seminars Expenses
6.63 2.91 + 3.72
4 AIMAS Expenses 0.35 0.14 + 0.21
5 Publication Expenses 0.62 0.62 0
6 Property Tax 1.15 0.74 + 0.41
7 Meeting Expenses 3.38 2.02 + 1.36
8 Loss on Sale of Assets 0.25 – + 0.25
9 Depreciation of Fixed Assets 4.79 5.48 - 0.69
10 Legal & Professional charges 0.32 0.28 + 0.04
11 Developing KYC & AML Policy for SCBs – 28.80 - 28.80
12 Transfer to General Reserves – 4.89 - 4.89
Total 196.68 191.18 + 5.50
ParticularsSl. No
1
2
3
4
5
6
7
8
2012-13 2011-12 Variations
112.00
3.24
44.18
16.00
15.21
–
–
–
190.63
112.00
4.05
36.08
16.00
31.57
0.15
0.39
0.02
200.26
Annual Membership Subscription
AIMAS Membership/Admission Fee
Interest received on Investment
Grant-in-Aid from Govt. of India*
Contribution received
Dividend from Coop. organisation
AIMAS Receipts
Miscellaneous Receipts
0
- 0.81
+ 8.10
0
- 16.36
- 0.15
- 0.39
- 0.02
- 9.63Total
INCOME & EXPENDITURE ACCOUNT
INCOME
(Rs. in lakhs)
EXPENDITURE(Rs. in lakhs)
NAFSCOB
72
Note:
1. It may be observed from the above statement that there is a 'Deficit' of Rs.6.05 lakh as on 31.3.2013 as against the
'Surplus' of Rs.9.08 lakh as on 31.3.2012.
2. The 'Total Expenditure' for the year 2012-13 was Rs.196.68 lakh as against Rs. 191.18 lakh during the preceding
year.
3. The details of expenditure towards 'Planning, Research and Development Cell' is given below:
EXPENDITURE FOR PRD CELL(Rs. in lakhs)
ParticularsSl. No
1
2012-13 2011-12 Variations
60.98 47.30Salaries & Allowance of the staff in PRD Cell (including TA & DA)
+ 13.68
2 3.66 2.89Printing & Stationery, Postage & Telegram, Publication, Telephone etc.
+ 0.77
3 7.52 1.51Conferences/Workshops/Seminars/ Trainings etc.
+ 6.01
4 1.53 –Annual Performance Awards of NAFSCOB to SCB's, DCCB's, PAC's and AIMAS Awards
+ 1.53
Total 73.69 51.70 + 21.99
FIFTIETH ANNUAL REPORT
73
17. Acknowledgements:
The Board wishes to place on record its gratitude to the Government of India, Reserve Bank of India and National
Bank for Agriculture and Rural Development (NABARD) for their continued support to NAFSCOB. The Board also
thankfully acknowledges the continued support and encouragement received from Government of India during
the year. The Board also records its appreciation of the keen interest shown by Union Ministry of Finance and
Union Ministry of Agriculture particularly Department of Cooperation in the development of cooperative credit
sector. The Board appreciates the initiatives of NABARD in ensuring the growth and development of short term
cooperative structure and also in supporting NAFSCOB in its endeavour to work for strengthening of member State
Cooperative Banks. Further, the Board places on record, the cooperation and close coordination maintained by
the organisations such as National Cooperative Union of India (NCUI); Cooperative Bank of India (COBI); National
Cooperative Development Corporation (NCDC); National Council for Cooperative Training (NCCT); College of
Agricultural Banking (CAB); Vaikunth Mehta National Institute of Cooperative Management (VAMNICOM), Indian
Banks' Association (IBA), Indian Institute of Banking and Finance (IIBF) and International Organisations such as
International Cooperative Alliance (ICA), International Raiffesen Union (IRU), Asia and Pacific Rural Agriculture
Credit Association (APRACA), Network for Development of Agricultural Cooperative (NEDAC) in Asia, Centre for
International Cooperation and Training in Agricultural Banking (CICTAB) and Regional Cooperative Banking
Association (RCBA) of ICA etc.
NAFSCOB could effectively play its role as a federal body due to the active involvement of the Chairmen and Chief
Executives of all member State Cooperative Banks. The Board places on record its high appreciation of their
commitment in building up the Federation as on effective body in the cooperative credit sector.
The good performance achieved by NAFSCOB during this year also has, in large measure, been the result of
continued sustained efforts and dedicated services put in by Shri B. Subrahmanyam, Managing Director and the
Board places on record its high appreciation of his services. The Board also appreciates the effective role played
by members of the staff at all levels. The board further looks forward for their continued involvement with the
sense of discipline, dedication, determination and devotion for building up NAFSCOB to meet the increasing
needs of member SCBs and also challenges posed before the entire short term cooperative credit structure.
On behalf of the Board of Directors of NAFSCOB
(DR. BIJENDER SINGH, MLA)
CHAIRMAN
NAFSCOB
