report of the working group on improvement of banking services

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The Working Group met members <strong>of</strong> a few <strong>group</strong>s and interacted with <strong>the</strong>m. As per <strong>the</strong> feed back, <strong>the</strong>
main reasons in not availing <strong>the</strong> bank credit are lack <strong>of</strong> awareness, non-availability <strong>of</strong> proper training and
capacity building. Availability <strong>of</strong> institutions for proper training is lacking in <strong>the</strong> islands. Since coconut and fish
are <strong>the</strong> main two products in <strong>the</strong> islands, very good potential exists to give value addition by forming a large
number <strong>of</strong> SHGs. The Group, <strong>the</strong>refore, suggests that banks and <strong>the</strong> Government departments may take
initiatives to promote more SHGs by making use <strong>of</strong> <strong>the</strong> services <strong>of</strong> NGOs as business facilitators and link <strong>the</strong>m
to <strong>the</strong> bank for <strong>the</strong>ir credit requirement. UTL Administration has opened an Administrative Training Institute
(ATI). Various training programmes <strong>of</strong> SHGs etc can be considered through ATI.
It is ga<strong>the</strong>red that <strong>the</strong>re are no moneylenders in <strong>the</strong> islands.
Banks and NABARD can contribute in <strong>the</strong> areas <strong>of</strong> capacity building by organising training programmes and
setting up <strong>of</strong> RUDSETI model <strong>of</strong> training institutes for promoting self employment opportunities. The RUDSETI
model can be extended to <strong>the</strong> islands to facilitate self-employment, to nurture self-confidence in <strong>the</strong> youth and
to build capacity through better resource utilization and transfer <strong>of</strong> appropriate technology. Syndicate Bank,
having larger presence in <strong>the</strong> islands, should take necessary initiative in this regard.
Lead Bank Scheme and Priority Sector Credit
3.10 Syndicate Bank is <strong>the</strong> lead bank in <strong>the</strong> UTL. However, BLBC meetings as envisaged under <strong>the</strong> Service
Area Approach for preparing credit plans based on ground level information are not conducted and <strong>the</strong> Lead
Bank itself prepares <strong>the</strong> Annual Credit Plan (ACP) setting <strong>the</strong> credit targets and places it in DLRC / DCC
meeting for approval.
As on March 31, 2007, <strong>the</strong> Priority Sector Advances constituted 38.98% <strong>of</strong> <strong>the</strong> total advances which is
below <strong>the</strong> mandatory norm <strong>of</strong> 40%. The Agri & allied activities formed 8.90% <strong>of</strong> <strong>the</strong> total advances falling below
<strong>the</strong> mandatory norm <strong>of</strong> 18%. Advances to SMEs were meagre at Rs.35.47 lakh. Advances to weaker sections
and minority community constituted 88.98% and 94.23% respectively <strong>of</strong> <strong>the</strong> total advances. As almost all <strong>the</strong>
Islanders are considered as STs (95%), <strong>the</strong> entire advances can be classified as credit to STs. The
performance <strong>of</strong> <strong>the</strong> banks in Priority Sector lending under <strong>the</strong> ACP during <strong>the</strong> past three years was as under: