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TRANSCRIPT
M. Balachandran
Strategic Modelsfor Re-Positioning of PSBs
Dr. K.C. ChakrabartyRole of Banks inEntrepreneurial Development& Micro Finance
Featuring• Channelising
Retail Credit
Y2K38 : Problemand a PossibleWay out
Banking CashTransaction Tax
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A Mon th l y J ou r na l pub l i s h ed b y t h e I n d i an Bank s ' A s s o c i a t i onAugust 2005- Volume XXVII-No 8- Rs.30
CEO
’s
PERSPECTIVE
CEO
’s PERSPECTIVE
“To work proactively for the growth ofa healthy, professional and forward
looking, banking and financialservices industry, in a mannerconsistent with public good.”
Shri K Cherian VargheseShri S C GuptaShri M S KapurShri O N SinghShri M B N RaoDr. A K KhandelwalShri Parkash SinghShri T S NarayanasamiShri V K ChopraShri N Kanta KumarShri V SridarShri K N PrithvirajShri Amitabha GuhaShri A G KalmankarShri Frederic AmoudruShri Gunit ChadhaShri Sanjay NayarShri Bart HellemansShri Rana KapoorShri S K BanerjiShri Deepak S PatilShri Vere J CarneiroShri Aditya PuriShri K V Kamath
Indian Banks’ Association
MEMBERSMEMBERSMEMBERSMEMBERSMEMBERS
OFFICE BEARERSOFFICE BEARERSOFFICE BEARERSOFFICE BEARERSOFFICE BEARERSC H A I R M A NC H A I R M A NC H A I R M A NC H A I R M A NC H A I R M A NShri A K PurwarD E P U T Y C H A I R M E ND E P U T Y C H A I R M E ND E P U T Y C H A I R M E ND E P U T Y C H A I R M E ND E P U T Y C H A I R M E NShri Niall S K BookerShri V P ShettyShri S C BasuH O N O R A RH O N O R A RH O N O R A RH O N O R A RH O N O R A R Y S E C R E TY S E C R E TY S E C R E TY S E C R E TY S E C R E T A RA RA RA RA R YYYYYShri Ananthakrishna
CHIEF EXECUTIVE & EDITOR
Shri H.N. Sinor
Editorial CommitteeDr. Jayantilal Jain
Dr. T.K. Chakraborty
Shri V.S.R. Murthy
Shri T.R.S. Trivedi
Editorial TeamPrabhuta VyasVice President (Communications)
K. Ganesan - ManagerLira Alphonso - OfficerTushar A. Shah - OfficerDharmraj Mishra - Officer
INDIAN BANKS’ ASSOCIATION
Head Office :Blocks 2 & 3, Stadium House,6th Floor, 81-83, Veer Nariman Road,Mumbai - 400 020 (India).☎ : + 91 (22) 2289 4500
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web : [email protected]
Edited & Published by :Shri H.N. SinorFor Indian Banks’ Association, Blocks 2 & 3, StadiumHouse, 6th Floor, 81-83, Veer Nariman Road, Mumbai- 400 020 (India). The views expressed in this Bulletinare not necessarily the views of the Indian Banks’Association or the bank institution to which theauthor belongs.
Designed, Processed & Printed by :Repro India Limited
EDITORIAL BOARD
Dear Readers,Micro finance is now seen as a holistic concept of not only lending, but also providingsaving and other services to the unorganized sector. Bankers now consider microfinance a viable business. Dr. K.C. Chakrabarty, Chairman and Managing Director,Indian Bank in his article ‘‘Role of Banks in Entrepreneurial Development and MicroFinance’’ traces out the role of banks in India for the development of micro enterprisesas credit providers, as intermediaries in the supply chain and providers of groupinsurance to mitigate market/interest risks.
The Financial Sector Reforms ushered in 1991 have changed the profile of IndianBanking Industry, more particularly the Public Sector Banks. Liberalisation andGlobalisation have thrown greater challenges ahead for our banks. Mr. M.Balachandran, Chairman and Managing Director, Bank of India in his article‘‘Strategic Models for Re-positioning of PSBs’’ highlights on key issues such asorganizations’ structural re-design, use of technology, marketing strategy,differentiated services, skill upgradation, tapping rural opportunities andconsolidation of banks for greater synergies.
This issue also carries host of other informative articles on issues of topical interestbesides regular features. We are overwhelmed by your appreciative response tothe changes introduced from last issue of the Bulletin. We assure you that we shallcontinue our endeavours to make the content of the Bulletin more relevant andreadable and its format visually more pleasing. Feedback from you would facilitateour achieving this objective.
Happy Reading,
H N Sinor
ED
ITO
RIA
L
H N S I N O R
contributorsco
nte
nts Strategic Model for Re-positioning of PSBs
M. Balachandran
Dr. K. C. Chakrabarty is Chairman &Managing Director, Indian Bank.
Role of Banks in EntrepreneurialDevelopment and MicrofinanceDr. K. C. Chakrabarty
CEO’s PERSPECTIVE
EXPERTS VIEWS
Shri T. M. Bhasin is General Manager,Oriental Bank of Commerce, New Delhi
Channelising Retail CreditT. M. Bhasin
Y2K38: Problem and a Possible Way OutDr. Ashutosh Saxena
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FEATURES
Editorial
Major Developments in Bankingand Finance during June, 2005
Performance Highlights of Public SectorBanks 2004-05
Banking Scene – Indian
Banking Scene – Global
Book Reviews
IBA Seminar
Back Cover
Banking Statistics
Subscription Rates (for 3 years) with effect from 20th September, 2003Bank Employees & Students* Rs. 600Institutions Rs. 1000Other Individuals Rs. 1000Overseas Subscriptions (US$) 200
* A certificate from appropriate authority confirming the status should be enclosed.
2 IBA BULLETINAUGUST 2005
Shri P. K. Barman, is a Chartered Accountant,Jamshedpur.
Banking Cash Transcation Tax - A Newstep in Indian BudgetP. K. Barman
Balancing Quality and Quantity in SHGs in IndiaR. DevaprakashShri Devaprakash is an Agro Economist .
Regional Office.
Dr. Ashutosh Saxena is Faculty, Institute forDevelopment and Research in BankingTechnology, Hyderabad.
Shri Balachandran is Chairman & ManagingDirector, Bank of India.
Change, Competition, Leadership & Rethinking Future
K. M. Gopinath
Shri Gopinath is General Manager (IIS),Indian Bank, Head office, Chennai.
Shri Pradeep Naidu is Manager, ING VysyaBank, Davangere.
Counter – The Best Marketing JointS. Pradeep Naidu
Whether Amendement to CPC – A Boon or MythK. ShivaramakrishnanShri Shivaramakrishnan is Manager &Faculty , Canara Bank, Regional StaffTraining Centre, Hyderabad.
Legal Decision Affecting BankersAjit Singh CheemaContributed by Shri Ajit Singh Cheema, Senior Manager,Punjab & Sind Bank, Amritsar.
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in Banking & Finance during June, 2005Major Developments
3IBA BULLETINAUGUST 2005
Major Policy Announcements
◗ The Government has
permitted housing finance
companies and non-
banking finance companies
to access the foreign debt
market through FCCBs and ECBs
subject to RBI approval.
( ET 4/6)
◗ The Government raised the External
Commercial Borrowings (ECBs) from $9
billion to $ 12 billion for 2005-06.
However the ceiling on cumulative
investment in government securities
by foreign institutional investors (FIIs)
has been left unchanged at $1.75
billion. ( ET 13/6)
◗ The Cabinet permitted a
comprehensive economic co-
operation agreement (CECA) between
India and Singapore. The pact is
designed to offer an integrated
package governing trade in goods and
services, an agreement on investment,
mutual recognition agreements in
services and co-operation agreements
in areas such as education, e-
commerce, the media and intellectual
property. ( BL 21/6)
◗ The Special purpose
vehicle (SPV ) to fund
infrastructure projects, to
be named as Indian
Infrastructure Finance
Company (IIFC) as a wholly owned
government company under the
Companies Act. It will have an initial
capital of Rs. 10 crore. ( FE 24/6)
◗ 3 Banks namely Allahabad Bank,UTI
Bank and UCO bank have got RBI
permission for opening representative
offices in China and are waiting for
approval from the monetary authority
in China. (BL 24/6)
Major Events
◗ The Government plans to borrow less
than estimated in the financial year
2006. The country’s fiscal deficit stood
at 4.1 per cent of GDP, against the
government’s 4.5 per cent. ( ET 3/6)
◗ The proposal to issue inflation-linked
bonds to help investors hedge against
the risk of inflation has been cancelled.
( ET 10/6)
◗ The Mid Term Appraisal of the Tenth
Five Year Plan showed that the
performance of the economy was well
below the target averaging 6.5% in the
last three years. (ET 28/6)
Banking Developments & Policies
◗ Current account withdrawals of over
Rs. 25,000 will attract Banking Cash
Transaction Tax. The tax will be
applicable on withdrawals from
current accounts on a single day from
scheduled banks. ( ET 1/6)
◗ In the meeting held by the Finance
Minister with the Chief Executives of
PSBs on 3rd June, 2005,the Finance
Minister had ruled out reduction in
government’s equity in public sector
banks below 51%.Further, the issue of
merger of regional rural banks would
be considered by August-end and the
process of consolidation among public
sector banks will be considered later.
Target for agricultural lending was
fixed at Rs.1,41,000 crore.
(ET 4/6)
◗ Reserve Bank has allowed banks to
lend money to Indian companies for
acquisition of equity in overseas joint
ventures, wholly owned subsidiaries, or
in other overseas companies, as
strategic investment. Bank board
would have to approve a policy for
such lending and incorporate it in their
loan policy. ( BL 8/6)
◗ The Centre has
constituted a seven-
member expert group to
review the functioning of
nidhi companies.. The
review will cover the role of nidhi
companies, their regulatory
framework and steps to safeguard
depositors. ( BL 8/6)
◗ The RBI has directed banks to simplify
the procedure to facilitate speedy and
easy settlement of claims following the
death of depositors. The RBI has also
requested Indian Banks’ Association to
formulate a model operational
procedure for the settlement of such
claims. The RBI notification also said
that banks have to settle the claims and
release the payments of the deceased
depositor’s account (s) within 15 days
of receiving the claim and on
production of proof of death of the
depositor and satisfactory
identification of the claimant.
(BL 10/6)
4 IBA BULLETINAUGUST 2005
Banking Developments (Rs. in Crore)
Financial Yearso far
Outstanding Actual %As on 24/6/05 (Variations)
Aggregate Deposits 17,89,864 89,665 5.3Investments 7,40,078 925 0.1
Bank Credit 11,61,387 60,958 5.5
Non-Food Credit 11,16,583 57,275 5.4
Funds to CommercialSector 11,53,373 54,142 4.5
◗ The RBI directed banks to closely track
the spends of international debit card
(IDC) holders and report to it if the
aggregate spend exceeds $ 1,00,000 in
a calendar year. ( BS 15/6)
◗ State Bank of India has set up new
strategic business unit (SBU) for
personal banking , small and medium
enterprises and agriculture. ( FE 18/6)
◗ Reserve Bank of India allows UCBs
even the non scheduled UCBs to
participate in the repos as long as they
have a constituent SGL account.
(ET 24/6)
◗ The RBI panel
suggested reforms in the
foreign exchange market
for liberalizing some capital
account transactions like foreign
currency derivatives. (ET 25/6)
◗ The RBI and the
Andhra Pradeshgovernment have signed
an MOU to strengthen
and work out ways andmeans to revive the 40 urban co-
operative banks (UCBs) in the state.
RBI would be assessing the trainingand computerization needs of urban
co-operative banks, upgrade skills of
employees and improve operationalefficiency through technological
upgradation. (ET 28/6)
Market Developments & New Policies
◗ The Government will allow three
largest Singapore based banks free
access to the Indian market, with
operational freedom at par with other
domestic banks. Development Bank of
Singapore, United Overseas Bank and
OCBC Bank will have far more
operational freedom than other big
foreign banks operating in the country.
( ET 17/6)
◗ HDFC Bank and ICICI Bank have
increased their lending rates by half-
a-percentage point in housing loans.
(ET 17/6)
◗ The Boards of Centurion Bank and
Bank of Punjab are planning to meet
on June 29th to discuss the merger
between these two banks.Valuation of
shares would be done by KPMG & NM
Raiji & Co ( ET 21/6)
◗ Federal Bank is planning an equity
issue of Rs.300-350 crore by
September, 05. ( ET 21/6)
◗ Lord Krishna Bank reported a net loss
of Rs. 24 crore during the financial year
2005 as against the net profit of Rs. 23
crores. ( ET 28/6)
Market Developments
BSE Sensex : 6729.90 -7193.85 (6.9%)
Re/$ : Rs.43.78- Rs. 43.51 (0.62%)
Call Money : 5.70% to 5.90% as on 30/6/05
Govt: Borrowing Programme
◗ The Central Government has
borrowed Rs. 37,000 crore from the
market till June 10 this fiscal. ( ET 17/6)
❑
Prepared by Smt. Jayasree Menon
www.iba.org.in
Strategic Model forRe-positioning of PSBs
CEO’s Perspective
M. Balachandran
5IBA BULLETINAUGUST 2005
If the PSBs have topositionthemselves asrelevant players inthe emergingbusinessopportunities, skillupgrade in newand profitableareas of banking isa must. This willrequire multi-pronged approachincluding campusrecruitment ofpersonnel skilledin management,finance, etc. andalso lateralrecruitment atmiddle and seniorlevels ofprofessionalsexperienced inrelevant lines ofbusiness andgradual buildingup of skills withinthe bank.
Since nationalization in 1969 and
till the year 1991, when financial
sector reforms were undertaken,
the public sector banks have
virtually ruled the market place.
They performed a well-defined
role in a planned economy set up.
They were primarily responsible
to channelise household savings towards directed
priorities of state. Due to high statutory pre-emptions
and relatively low availability of credit in the system,
the mindset of bankers that developed was one of
credit allocation and not competition. The products
set on offer was limited and not present on the retail
asset side at all. High quality customer service was
not essential to survive in the market place.
Post 1991, the entry of new generation private sector
banks has redefined competition on the banking
landscape. These banks brought with them a new
era with latest technology, autonomy in respect of
business areas, management teams, and incentive
structure and quickly created a strong niche for
themselves particularly among the rich and
preferred classes. They are rapidly capturing
market share away from both PSBs and foreign
banks alike, having garnered as much as 13%
of the business share by March, 2004 from
nothing in 1991. They are increasingly
entering all the business areas
including Government business,
SME, export finance,
agriculture apart from
their strength
areas of technology related banking, wealth
management and other ancillary products. This
competition is here to stay.
The further opening up of the Indian banking market
to foreign banks, for which RBI has released the road
map will intensify competition from more efficient
foreign banks particularly after 2009. India is today
the world’s 10th largest economy and also the second
fastest growing large economy. As per BRICS report
we will be the 3rd largest economy in the world in
about 30 years’ time. With positive demographics in
favour of the country, the attractiveness of Indian
economy to the invasion by foreign financial sector
giants is only inevitable. They will challenge the local
banks with their global reach, skills, wide range of
products and international scales of capital. The
Banking sector in India, particularly the PSBs, will thus
soon face the full force of global winds of
competition.
The introduction of prudential norms in early
nineties in line with international best practices
further exposed the PSBs and suddenly brought into
focus several deficiencies particularly in the area of
quality of asset portfolio. Gross NPA levels shot up to
more than 20% in certain cases. Capital adequacy
norms made capital a pre-requisite for growth. With
partial disinvestment of equity to the public by the
Government, Investors have emerged as important
stakeholders, whose expectations and aspirations
have to be met by the banks if they want to be
assured of adequate investment support for fresh
equity.
Operational efficiency is another area that shows
yawning gaps from international standards in the
6 IBA BULLETINAUGUST 2005
”
”
Shri Balachandran is presently Chairman & Managing Directorof Bank of India. He joined Bank of Baroda as a Specialist DirectRecruit Officer in 1970 after completing his Masters degree inScience and rose to the position of General Manager in Bank ofBaroda. In February, 2004, he was appointed as the ExecutiveDirector of Bank of India and elevated as Chairman & ManagingDirector on 9th June, 2005.He has a rich knowledge of various aspects of Banking, coveringPriority Sector Finance, Commercial Credit and InternationalBanking. In addition to various linguistic territorial exposures,he has vast experience of managing different categories ofbranches, as a Regional Head and Zonal Head besides in theCorporate Office of the Bank. He is also credited with evolvingPolicies and Guidelines for enhancing the flow of timely creditto activities identified as national priority, particularlyAgriculture, Rural Finance & SSI Lending and associated withthe Committees of NABARD and IBA. He also served as the ChiefExecutive of Bank of Baroda’s USA operations at New York andgained valuable International Banking perspective.Mr. Balachandran is an astute administrator and a professionalBanker with keen interest to make the Bank more competitive andpreferred one, providing best financial solutions by technologicalcapabilities and management of Human Resources.
working of our PSBs. This is so since
intermediation costs are very high,
accentuated by the small size of banking
transactions and portfolio in the Indian
banking.
The introduction of Basel II norms is set to
put even more pressure on the banks for
capital adequacy, risk management and
attaining international standards of
operational efficiency if they have to maintain
the faith of the shareholders and customers.
Basel II lays down benchmark ratios of
operational efficiency in terms of ROA (> 1%),
Gross NPA (< 3%), Net NPA (below 1%), net
interest margin (> 3.5%), CAR (> 12.5%), etc.
In the face of increasing competition and
more demanding customers requiring total
financial solutions, universalisation or
convergence in banking has assumed
increasing importance and urgency. Banks
are emerging as multi-capability one stop
financial superstores. This has implications
on business issues viz. retention of
discerning clients and operational issues
including HR capabilities for PSBs.
Last but not the least, technology has been
the major driver of all change and
determines the delivery and product
capabilities, as well as efficiency and risk
management of the banks. Technology has
transitioned beyond a transaction-
processing tool. It today sets the new
paradigms in product creation and delivery
capabilities, across geographic boundaries
and as per customer’s choice.
With all these changes in the market
environment, the need for PSBs to reposition
themselves hardly needs over-emphasis.
These banks many of which have a trail of
success of a century or more need to
restrategise to remain relevant even for the
next quarter century. The impending changes
on the horizon further emphasize the need
and urgency of this strategic re-positioning.
Objectives of re-positioning
The objectives, to my mind would
encompass the following:
a) To emerge as efficient and competitive
entities in line with international
efficiency parameters, product
capabilities and size so that they
continue to remain not only relevant
but also command respect in the
increasingly globalizing world.
b) To achieve and sustain high levels of
profitability through stable and
diversified revenue streams so as to
give superior value to all stakeholders.
c) To retain and increase the market share
via planned strategic organic or
inorganic growth.
d) To develop as universal banks.
e) To acquire the trust of the customer
based on their capability alone and to
reinforce it continuously by delivering
world-class banking services.
f ) To shed the slow moving, bureaucratic
image and position themselves as tech
savvy, efficient organizations, which
care for the customer and provide
financial solutions in a professional
way. Only then they can become the
preferred choice of the best of the
customers, investors and staff talent.
Elements in the quest for re-
positioning
In the past few years Indian
banks have taken
important steps to
emerge strong. They
have attained
substantial clean-up
of their balance
sheets and the NPA
ratios today are
inching towards
world class
standards. Most
banks have
brought net NPA
below 3% and are
fast moving to 1% or
below. Induction of
technology in the banks
has seen a paradigm
Banks also need to leap
frog into next level of IT
initiatives viz. CRM,
HRM, and Decision
Support Systems.
7IBA BULLETINAUGUST 2005
change with most banks now on the trail of
achieving networked and multi delivery
capabilities from the earlier stand-alone
computing. Various banks have also
diversified their revenue streams and today
offer multiplicity of products across the
financial sector. A round of VRS has brought
a scale-up in their producti-vity parameters.
Most PSBs have also partially invited public
shareholding, and the resultant market
discipline is ensuring better levels of
operational efficiency and corporate
governance. While all these have been
important ingredients in the Indian public
sector banks’ quest for attaining an
important place in the new order, the time
has come for the banks to undertake the
next level of transformation to emerge as
really world-class and contemporarily
relevant organizations. Some of the
elements for this strategic change would
cover the following :
Organisation Structure Re-design
Reflecting the realities and demands of the
protected and expansionary business model
post 1969, the basic structure of the public
sector banks has developed along
geographic lines. The needs of business were
well served by this structure all these years. In
the absence of IT, there was no real alternative
method to organize the banks with sufficient
ability to control the operations. Thus, a
structure was born that had zones and
regions controlling the numerous bank
branches. The premise was that
undifferentiated bank branches could each
serve every customer’s basic banking needs.
With the changes in the landscape and
advent of IT, it is appropriate to review the
current structure under three different
lenses. Does it allow the bank to address the
needs of its customers efficiently and
effectively (in particular providing
differentiated services to different classes
of customers)? Can it compete with its
competitors and respond quickly to market
demands in specified business areas? and
Does it take full advantage of the technology
that it has acquired to reduce cost, improve
revenues and serve the customer effectively?
The Indian customers have changed. They
are now more assertive and seek global class
services. Corporates require this to stay
competitive in an increasingly aggressive
market place. Retail customers are working
harder and have less time and so are not
willing to be charitable to service providers
who do not serve them well. The banks’
current geographic and branch centric
operating model is not suited to
differentially serve the needs of different
segments. For example large corporate
customers are looking at turnaround time
and quality of advice including in areas of
treasury and risk management. This is viewed
as a key parameter of service, which does
not get delivered from generalist branch
officials in undifferentiated branches.
Likewise, retail asset customers need to be
served at the point of sale through an
independent direct sales channel. Different
segments require different skills, focus and
dedicated resources. An organization
structure based on Strategic Business Units
(SBU) Model is required to serve these
different business segments by employees
with a clear focus on that segment with
accountability in improving penetration and
profitability.
The organization structure has to be agile
to respond to the customers’ needs. The
combination of IT and communication
technology permits taking of higher quality
decisions remotely. It also allows for
consolidation and centralization of back
office activity away from the branches to
cheaper locations with much greater scale
and allowing for substantial efficiency. This
can also free up the time at the branches for
the front end personnel to devote more on
customer facing activities and doing more
cross sell and change the face of the branches
as customer servicing and selling units.
Present geographic organization structure
with undifferentiated branches doing most
of the back office work and being the sole
delivery channel needs to undergo a quick
change to be able to compete effectively
for the share of wallet of the new age
customer. A suitable organization structure
is after all the sine-qua-non for delivering
the identified competitive and efficient
business model.
Intelligent use of Technology
As stated earlier, the Indian banks have
moved beyond branch level automation to
varying degrees of networking across
branches. The network capability has got
tremendous potential to augment service
delivery and efficient use of resources of
the banks. The important point however is
to use technology intelligently. Time has
come where the banks need to undertake
Business Process Re-engineering initiatives
to leverage the technological resources to
the full. These initiatives in the efficiency area
would centre around questions like - does
the activity need to be done the same way,
does it need to be done at every office or at
the front end and so on. Almost 50 to 60%
of branch operations are amenable to
shifting to BackOffice, and typically efficiency
gains of 30 to 40% are achievable by doing
centralization. Add to that the possibility of
moving the origination of the transaction
to the customer’s office. It is possible with
today’s secured technology channels
(including SFMS of RBI or web based
banking channels of the banks) to ask the
customers to transmit an application for LC
or other banking requirements
electronically to the bank. Bank can upload
this into its system and transfer/transmit to
the recipient bank terminals. The customer
would thus be able to control its transactions
and derive better satisfaction while the Bank
will be able to achieve cost reduction and
efficiency. Banks also need to leap frog into
next level of IT initiatives viz. CRM, HRM, and
Decision Support Systems.
Marketing Set-up
The Bank branches, which the PSBs have so
far almost solely used, as units for
dispensation of services are no longer
sufficient in the changed environment. While
IT enabled channels like ATMs, internet
banking, etc. provide one alternate channel,
increasing reliance will have to be placed
on developing direct sales force as an
8 IBA BULLETINAUGUST 2005
independent channel for business growth
and service delivery. As stated earlier, for
example retail assets have to be catered to
at the point of sale or at the customer’s
premises. Corporate business, which is
becoming very competitive on the interest
margin front, can be made profitable only
by garnering larger share of fee business.
This would accrue only through better
relationship management under the sales
channel. No longer would business
opportunities accrue to banks which stand
and wait for customers to walk in, at least
not of the preferred variety. The marketing
culture would also have to pervade to
become a mind set issue with the bank
personnel. Upsell and cross sell of products
has to become part of culture with the staff.
It has been recognized that the more
number of products the customer uses, the
profitability and customer retention is much
better.
Differentiated services
In the present day of shrinking spreads and
increasing costs and faced with more
demanding customers, it is imperative that
the banks reorganize themselves to be able
to provide differentiated services to
customers. While public sector banks would
need to continue to serve the mass
customers with basic banking services, they
increasingly need to provide higher value
added personalized services to the higher
end customers in line with their profitability
and value for the bank.
Capability Upgrade
In service industry like banks, it is the quality
of human resources, which determines the
capability of the bank to deliver superior
quality services and compete effectively. It is
a paradox that in Indian public sector banks,
which have been doing mostly traditional
banking of deposit and lending, the
availability of credit skills across the bank
particularly in the areas of large credits, project
finance, etc. is deficient. The skills in regard to
ancillary services of merchant banking, refined
risk management and treasury products for
the corporates, personal finance advice,
wealth management solutions and capital
market related services for the personal
banking segment are in severe short supply.
At a stage when India is rapidly globalising
and Indian corporates are making large forays
abroad including the acquisition of overseas
companies, non-Indian banks manage most
of these deals. This is both a loss of good
business opportunity, loss of relationship
with the clients and set back to the status
and respect of Indian banks in global markets.
Skill upgrade in these new and profitable
areas of banking is a must, if the PSBs have
to position themselves as relevant players
in the emerging business opportunities. This
will require multi-pronged approach
including campus recruitment of personnel
skilled in management, finance, etc. and also
lateral recruitment at middle and senior
levels of professionals experienced in
relevant lines of business and gradual
building up of skills within the bank. The
present pay and incentive structure in public
sector banks is however deterrent to
developing this model. The recent autonomy
package given by the government does
open up possibility of unshackling the banks
in this regard. However much more needs
to be put in place, for the banks to be really
able to attract, retain and nurture talent.
Tapping Rural Opportunities
The rural landscape has changed. Increasing
use of technology in farming, usage of
genetically modified seeds aided by
scientific irrigation techniques has brought
about stability in agricultural production.
The agricultural sector is acquiring
commercial hue, adding to the prosperity of
the rural communities. Growing trend of
consumerism is being seen among the rural
populace. This is creating opportunities for
banks to market not only traditional
agricultural lending but also loans for
consumer products and a plethora of other
financial services. Public sector banks, which
have extensive network in rural areas and
also the experience, feel, understanding and
relationships in the rural segment are well-
positioned to tap this increasing business
opportunity. Two issues in rural lending, risk
management and high transaction cost
however, need to be tackled. Experience has
shown that agricultural loans are no more
susceptible to NPA generation than other
loans. Further, technology today provides
the facility for better risk management by
developing risk models for individual
segments. High transaction cost can be
tackled through use of partnerships with
NGOs, MFIs, Farmer Clubs, etc. Rural segment
is the next big growth story and PSBs with
their established niche need to get their act
together for making full use of the
opportunity.
Consolidation
It is an acknowledged fact that the Indian
banks are very small in size by international
reckoning. The biggest Bank of this country
is the only bank to rank among the top 100
global banks. The largest bank in China is
eight times bigger than the biggest Bank of
India. Mergers and acquisitions happening
in the west as also in our neighbourhood
are further increasing this gap.
Size of the bank is important as it gives
global reach, ability to develop and offer
comprehensive set of products, enjoy
economies of scale, derive optimum benefit
out of the huge investment in IT, roll out
next generation of IT initiatives, and ward
off predatory acquisition moves.
Consolidation in Indian banking is therefore
perhaps an idea, which needs to be pursued
with due seriousness by the banks,
regulators and the Government. However
consolidation of public sector banks should
not be a forced merger of strong and weak
banks but driven by synergies and resultant
benefits.
It is clear that public sector banks, which have
developed in a protected environment in
limited areas of banking services have to
take major initiatives for positioning
themselves in the global competition which
is knocking at their doors. Any procrasti-
nation in taking the required steps will
simply marginalize these banks with serious
loss of business, market share and customer
patronage. ❑
Role of Banks in EntrepreneurialDevelopment and Microfinance
Dr. K. C. Chakrabarty
Introduction
In most of the developingcountries poverty is a major factorhaunting the socio-economicdevelopment. This promptedUnited Nations to include povertyand hunger eradication as one ofthe objectives in their MillenniumDevelopment Goals. Poverty is
reflected in the society as a vicious circle which iscreated due to people having limited access to credit,leading to restriction in productivity, inhibited income,low savings and thus low capacity to invest. This isfurther fuelled by low risk taking capacity of thepeople. Microfinance serves as a means to empowerthe poor, and provides a valuable tool to assist theeconomic development process. But it would bemeaningful only if the poor are empowered withcrucial skills to run micro enterprises successfully.
In recent times, lot of thrust has been given to themicro enterprise sector after the realisation of itsconsiderable contribution to economic growth andvitality. Over 500 million poor people around theworld are running profitable micro-enterprises. Bypromoting and developing micro enterprises theentrepreneurial quality of people can also be
developed. It has been understood that withoutdeveloping an enterprise at micro level, true
development will only be a dream.
Microenterprise and microfinance
In countries, which are undergoing theprocess of economic development, self-
employment throughmicroenterprise is often the only
means for people toprovide for their
f a m i l i e s .
These micro enterprises, or “the world’s smallestbusinesses,” represent an estimated 80 percent oftotal enterprises. According to the Economic Censusof 1990, India had 24 million microenterprises,constituting 97 percent of all enterprises, providingemployment to at least 45 million people andemploying 63 percent of all non-agriculture workers.Larger proportions of rural non-agriculture workersare employed in microenterprises (75 percent) thanin the urban areas (52 percent).1 Yet, only about 5%of the world’s entrepreneurs have access to financialservices. Currently, the Microfinance Sector globallyis reaching approximately 4% of that potentialmarket.
Microfinance generally refers to the provision ofsmall-scale savings, credit, insurance, and any otherfinancial services to those who cannot access themfrom formal financial institutions. Due to issues ofrisk and cost associated with servicing the largernumbers of small low capital input businesses, theformal sector lending to micro enterprises is low.The late 1970s and early 1980s saw the emergence of“microenterprise lending” programs, with focus oncredit for income generating activities and targetingvery poor (often women) borrowers. The early focusof most microenterprise lending programs was toprove that the poor were creditworthy.
In the mid-1990s the term micro-enterprise lendingbegan to be replaced by a new term “microfinance”that included not only credit, but also savings andother financial services. The 1990s saw growingenthusiasm for promoting microfinance as a strategyfor poverty alleviation. For providing more thrust tomicro-credit the year 2005 has been recognised asthe “International Year of micro Credit”.
Through microfinance, by making loans available andproviding job training, the poor are given theopportunity to engage in promising microenterprises.Microfinance acts as the lever to push the process.
9IBA BULLETINAUGUST 2005
Banks have amajor role to playin thedevelopment ofmicro-enterpriseand microfinance.Their first role isthat of creditprovider, but apartfrom that theyhave to act aschange agents. Aschange agentsthey have to helpthe people inacquiring the basicknowledge ofbusiness. Byproviding trainingatleast basicnuances ofbusiness can beinstilled in them.Training shouldcomprise ofknowledge aboutbusiness, aboutthe product, policyenvironment, etc.
CEO’s Perspective
10 IBA BULLETINAUGUST 2005
Dr. Chakrabarty has assumed charge as Chairman & ManagingDirector of Indian Bank, on 9th June, 2005. He started his career as aPlanning Officer with Bank of Baroda in 1978 and prior to joiningIndian Bank, he was with Punjab National Bank as its ExecutiveDirector.With a Ph.D in Statistical Techniques and Demographic Studies,Dr. Chakrabarty brings with him rich and varied experience ofworking in various capacities for more than 26 years at Bank of Baroda.At Bank of Baroda, he was looking after lead bank responsibilities,Corporate Planning, MIS, Economic Research, InformationTechnology at various times and headed the Integrated treasuryfunctions. The Bank’s Corporate Risk Management function wasvested with him and he was in charge of the UK Operations of Bankof Baroda for more than four years from May, 2001 to July, 2004 with‘approved person’ status from Financial Services Authorities in U.K.(U.K. Regulator).Dr. Chakrabarty’s varied expertise includes preparation of CorporateStrategic Plans, establishing Asset-Liability Management system,setting up Resource Management functions, Marketing of newproducts, establishing Modern Enterprise-wise Risk ManagementSystem, Electronic Payment Systems, diversifying into Insurancebusiness and e-banking at Bank of Baroda.
”
”
But the philosophy of microfinanceprogrammes go beyond mere access anddistribution of money. It helps in fosteringand developing an environment whereexisting networks and interlinks arestrengthened. It is a necessary but not asufficient condition for microenterprisepromotion. Other inputs required areidentification of livelihood opportunities,capacity building, establishing of marketlinkages for inputs and outputs, activityanalysis and policy reforms.
Need for developing micro-enterprise andmicro-finance
The promotion of self-employment is a basiccomponent of economic development andsocial policy in most countries. It isrecognised as one means of bringing aperson into the mainstream of society as aproductive and contributing individual. Theeconomics of microenterprise make it acompelling anti-poverty strategy. With a loanof Rs 5,000 in a poor country one can start asmall business, repay the loan in a year, whilestill owning the productive assets. Over time,one can earn enough to escape frompoverty.2
Microenterprise development refers to thepackage of services, policies, programs, andinstitutions intended to develop micro-enterprises. Microenterprise developmentcontributes to widening the pool ofentrepreneurship available to society and itbroadens the base of the private sector. Thereare many good reasons to supportmicroenterprises as they
➢ Provide sustainable employment andincome for many people by protectingexisting livelihood opportunities andcreating other potential jobs.
➢ Have strong economic linkages withother sectors of the economy.
➢ Meet the needs of low-income peoplefor goods and services at the prices, inthe amount and in the locations thatare accessible to them.
➢ Increases the circulation of money.
➢ Cause minimal impact on theenvironment due to low powerconsumption. Many micro-enterprisesalso directly improve the environmentbecause they are based on recyclingand locally available materials andresources.
➢ Have the potential to improve socialand political stability and cohesion incommunities by reducing incomeinequalities, encouraging self-reliance,self-pride and increased local control,thus building social capital.
➢ Successful microentrepreneurs incommunities can serve as role modelsfor young people.
Challenges being faced by microenterprise
A large proportion of micro entrepreneurshas cited credit as the primary constraint tobusiness growth. Another major challengefacing this sector is the compulsion tobecome self reliant and self-supportivegiven the phased dismantling of protectivebusiness. The enterprises suffer not onlyfrom domestic and internationalcompetition but also from the normalbusiness cycle.
The major problem is, for running anyenterprise business acumen is requiredwhich normally all do not have. Training canhelp in getting to know the nuances ofbusiness but for being successful,understanding of the whole scenario andits integration is very much required, whichany training can only stimulate in one’smind. The other problem is of indiscriminategrowth of microenterprises, which leads toincreased supply of material in themarket. In market the twin forces ofdemand and supply play anactive role. Excess supplywithout increasing demandfor labour intensiveproducts leads toreduction in priceultimately leading toloss for the poormicroentrepreneur.
Role of banks inentrepreneurialdevelopment andmicrofinance
India hassupported socialbanking for a longtime. Policydirections to rapidlyexpand ruralbranches, mandatecredit allocations forpriority sectors (includingagriculture), deliver large
Microfinance generally
refers to the provision
of small-scale savings,
credit, insurance, and
any other financial
services to those who
cannot access them
from formal financial
institutions.
11IBA BULLETINAUGUST 2005
subsidy oriented credit programmes to servemarginal communities and poor householdsand regulated interest rates have been triedfor over 35 years. But this objective remaineda long cherished dream. With microfinanceintervention, however this situation ischanging. Now all the banks believe that poorare also bankable, they can also save and thusrepay. Robinson (2002), notes that “The formalsector has begun to realise that financingthe poor can be both economically andsocially profitable.”
Indian Bank was the pioneer in India in thisfield, who in 1989 thought of the project offinancing Self Help Groups (SHGs) directlyalongwith IFAD. United Nations Office forProject Service (UNOPS) in the year 1994 inits report, appreciated involvement and roleof Indian Bank in the implementation of theproject. Based on those lines, what NABARDhad started off in 1992 as a modest pilottesting of linking around 500 SHGs withbranches of half a dozen banks across Indiawith the help of a few NGOs, today involvesabout 35,294 rural outlets of more than 560banks, with an advance portfolio of morethan Rs. 39 bn in micro Finance lending toSHGs. Financial services have reached thedoorsteps of over 83.5 million very poorpeople through 1,079,091 SHGs hand-heldby over 3024 development partners.3 IndianBank continues to be the leader among thecommercial banks in credit linking highestnumber of SHGs in the state of Tamil Nadu.It has sustained its position throughaggressive strategies and continuedinnovation. It has introduced microfinancederivative products like Vidhya SobhaEducation Loan Scheme, Junior SHGs, GrihaLakhshmi, (Housing Loan Scheme) etc. It hasalso relaxed the norm for maximum lendingto 10 times of the savings which was earlier4 times only.
Banks offer a variety of potential advantagesfor financing of micro-enterprises andmicrofinance, including a commercialoutlook and relatively sophisticated skills.As profit-making institutions, they arealready dedicated to the goal of financialsustainability. The greatest potentialadvantage of banks is that they are goingconcerns and are in a position to mobilizedeposits. Banks have been at the forefrontof some of the following innovations :
➢ Lending wholesale loan funds.➢ Assessing and buying out micro-
finance debt (securitisation).
➢ Innovating specific retail products suchas the Kisan (Farmer) Credit Card,Swarozgar credit card.
➢ Engaging microfinance institutions asagents for disbursement and recoveryof loans.
➢ Equity investments.
Thus banks have a major role to play in thedevelopment of micro-enterprise andmicrofinance. Their first role is that of creditprovider, but apart from that they have toact as change agents. As change agents theyhave to help the people in acquiring thebasic knowledge of business. By providingtraining atleast basic nuances of businesscan be instilled in them. Training shouldcomprise of knowledge about business,about the product, policy environment, etc.Indian Bank alongwith Indian Overseas Bankand NABARD has set up rural training centreat Karaikudi which has microentrepreneurialdevelopment as one of the objectives.
Bank has to act as an intermediary at allstages in the supply chain. Its main activityshould be to strengthen the whole supplychain so that there is win-win situation forall. Microenterprises need strong forward aswell as backward linkages, which meansavailability of produce, in right quantity, ofright quality, and at right time. Banks canestablish the large volume of business bymaintaining a database of all thesebusinesses and providing for the possibilityfor outsourcing. The recent advancement ofleveraged leasing/sub-contractingsupported by banks can help the micro-entrepreneurs get the required business andalso the inputs needed for it. All the bankstogether or individually can think of forminga venture capital fund especially forpromoting micro enterprises. From this fund,starting of the enterprises as well as thetraining required and other aspects relatedto it can be financed like finance requiredfor market research.
Loans provided to micro-enterprises areinherently very risky but this risk can bereduced for the poor micro-entrepreneur bygiving credit assistance in the form of equityassistance. Small start-up businessesgenerally have weak or poor cash flowsituations for a period of time, often for morethan a year. The difficulties and pressureswhich a new entrepreneur has to face isalways very formidable, and an obligatoryand totally structured loan repaymentschedule can often be a fatal factor. There is
no mechanism to insulate the entrepreneurfrom the normal business failures. So thebanks role is to properly identify thebusiness according to the demand supplysituation and make the repayment scheduleaccordingly. To mitigate the market risk andinterest risk, insurance of the business ataffordable premium could be thought ofon the lines of group insurance. Banks canprovide the enterprises group loans at lesserinterest rates without any intermediary inbetween to keep the interest rates low. Banks’can also think of re-engineering themicrocredit programs to target some non-poor micro- or meso-entrepreneurs whogenerate much needed wage employmentopportunities for the poor and the poorest.There is no harm in supporting the poorestfirst with wage employment before theybecome self-employed.
Apart from all this bank has a major role toplay in policy formulation, programme andproject implementation, support and co-ordination etc. Bank as a larger entity andhaving presence at all the levels of supplychain, can influence the policies and proceedin such a way so that it is implementableand also beneficial for the micro-entrepreneur.
Challenges being faced by bank
Micro-enterprises are influenced more by anychange in the macro environment. They areso vulnerable that normal business cycle canalso influence them. So care has to be takento identify more of growth orientedmicro enterprises than livelihood enterprises.Livelihood enterprises are more prone tosuch risks. Besides they just augment thehousehold income but cannot giveemployment to others.
Those who have some business acumentake up the growth orientedmicroenterprises. But the challenge is toidentify such talents. For this, banks can takehelp of the SHG members or village levelorganisations. Another challenge is to buildbanking products and develop microenterprises in such a way that the burden ison the individual and not on the wholegroup. Many a times banks give loans toSHGs for starting up of microenterprise. Thisloan is for the whole group and everybodyis responsible for the profit and loss,including them who do not know anythingabout business and or are not interested.This increases the non-financial cost and
12 IBA BULLETINAUGUST 2005
leads to failure of the business. Instead ofthis, the banks should insist on giving loansto individuals with group guarantee. Forkeeping the social security system of SHGsintact banks can take some extra interestrate (as decided by the SHG members) whichwill be given to the SHG in the event of theirstanding as guarantor for any individual ofthe group.
For starting up of any business the firstrequirement is market research.Indiscriminate increase in themicroenterprises can lead to glut in themarket thus lowering the price of theproduce. So banks have to look into theeconomical and financial viability of thebusiness before promoting it.
Conclusion
Micro enterprise sector contributesconsiderably to economic growth. Limitedaccess to credit, low risk taking capacity ofthe people, poor skill, lack of forward andbackward linkages, demand and supplymismatch are some of the bottlenecks thatinhibit microenterprise promotion. The
bankers have a major role to play in thedevelopment of microenterprise andmicrofinance by combating thesebottlenecks. Microfinance is an emergingsolution to the problems of entrepreneurialdevelopment. The core of microfinanceprogrammes go beyond mere providing ofcredit to deeper issues of how money isutilised and invested and also other issuessuch as business opportunity identification,rural talent search, business and productiontraining, establishment of market linkagesfor inputs and outputs, policy reform, marketresearch, etc. Banks can partner with otheragencies that can facilitate above raisedissues. Banks, besides playing the major role,as Credit Provider will have to act as achange agent, facilitator for providingnecessary infrastructure and hedgingmechanism to mitigate market risks etc. Theywill have to strengthen the supply chain bybuilding the capacity of all the peopleinvolved in the supply chain to create a win-win situation for all. Through thedevelopment of microenterprises theentrepreneurial qualities of people can alsobe developed.
References
1. “Microenterprise Development : Not ByCredit Alone”, Asian Development Bank, 1997.
2. Seibel, Dr. Hans Dieter & Harishkumar R. Dave(2002), “Commercial Aspects Of SHGBanking In India”, Paper Presented At TheSeminar On SHG-Bank Linkage ProgrammeAt New Delhi.
3. Albu, Mike (2004), “Leveraging Leases forSmall Businesses : a working analysis ofopportunities, with special reference tosituation in Kenya”.
Jhunjhunwala, Bharat (2005), “Turning SHGsinto sustainable business enterprises”,Business Line, Page 8, dated July 12, 2005.
Vincent, Guy, “SustainableMicroentrepreneurship: The Roles ofMicrofinance, Entrepreneurship andSustainability in Reducing Poverty inDeveloping Countries”.
Robinson, Marguerite S., 2002, “TheMicrofinance Revolution: SustainableFinance for the Poor”.
NABARD, 2003-04, “Progress of SHG – BankLinkage in India. ❑
Dear Readers,U have in hand the August 2005 issue ofrevamped ‘avatar’ of IBA Bulletin. Please take afew minutes from your ‘here and now’ concernsto let us have your valuable feedback ......... Yourfeedback .......... will be highly appreciated .............It will help us serve U better ........ U r at libertyto criticize us .......... correct us .......... and ofcourse even praise us. Needless to say that yourcomments are the perfect source ofimprovement in its content to make your Bulletinmore interesting and informative. ❑
ChannelisingRetail Credit
Experts Views
T.M. Bhasin
During thepast five years,there hasbeenadequateliquidity in thebankingsystem andthe bankshave,therefore,been devisingvariousschemes toattract thecorporate andlargeborrowerswhere themajor chunkof credit flowsout ensuringconstantrevenue to thebank in theshape ofinterest, withlesseroverheads.
Introduction
The banking industry earns its
major portion of income from
interest on advances and
investments. The interest spread
takes care of operational
overheads, technological
upgradation and provisions
against NPAs, etc. However, the spread has
continuously been shrinking over a period of time
from around 8% in the early 90s to around 3% now
in the Indian Banking Industry. Internationally, the
spread hovers between 1% and 1.5%. With
globalisation and emerging competition from the
private and international players, it is very likely that
the interest spread will go on shrinking in the times
to come. To augment the income from other sources,
the banking industry has been looking for new
ancillary business activities such as CMS,
Bancassurance, Credit/Debit Card, etc. In view of the
fixed mindset of public sector bank employees, it is
taking longer than the required time to encash the
opportunities available in the ancillary business
and it remains a matter of fact that the “interest
income remains a single major source of
revenue for the banking industry”.
During the past five years, there has
been adequate liquidity in the
banking system and the banks
have, therefore, been
devising various
schemes to
attract the corporate and large borrowers where the
major chunk of credit flows out ensuring constant
revenue to the bank in the shape of interest, with
lesser overheads. However, unfortunately even if a
single corporate/large borrowal account becomes
defaulter, there is a sudden jump in the NPAs, thereby
affecting the bottom line of the concerned bank.
Gradually therefore, the trend has shifted towards
addressing the credit needs of medium and small
borrowers who are in need of finance, not only for
their business requirements but also for their own
personal needs as that of their employees for vehicle,
consumer, housing loans, etc. These retail credit
avenues offer a diversified portfolio to the bank,
thereby optimizing the risk and maximising the
return.
Trend towards retail credit
As per industry estimates, the overall Retail Credit
disbursements have grown by 30% during the Financial
Year 2005, as against a growth of 12.6% in the last fiscal.
The segments-wise break up of these disbursements,
over a period of last three years is as under :
(Rupees in crores)
Loan Category Financial Financial Financial
Year 2005 Year 2004 Year 2003
Home 60,000 47,000 42,000
Auto 29,000 20,000 19,200
Commercial 24,000 19,000 13,800
Personal/Commercial 10,500 10,500 10,200
Two-wheeler 6,500 3,500 3,600
Total 1,30,000 1,00,000 88,800
13IBA BULLETINAUGUST 2005
14 IBA BULLETINAUGUST 2005
Shri Bhasin is presently General
Manager, Oriental Bank of Commerce,
New Delhi Regional Office. His
qualification is M.Sc. with an MBA
(Finance), FMS, LLB and CAIIB. He has
also done Diploma in Criminology and
Forensic Science and Diploma in Office
Organisation and procedures.
”
”
Home loans account for a whopping 46% of
retail loans. There may be varied reasons e.g.
Rising Property Prices, Higher Income Levels,
Low Interest Rates Regime, continuous
availability of Tax Benefits, etc. Nevertheless
home loans is one sector which gives the
financing banker a security satisfaction, which
appreciates in due course and thus the
default in repayment can be recovered by
invoking the provisions under Securitisation
& Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002.
As per Society of Indian Automobile
Manufacturers, domestic passenger car sales
grew by 17.8% to nearly 8.2 lakh units in
financial year 2005 against 7 lakh units last
year. The used car sales market is also
estimated at 70 to 90% of new car sales and
the car buying appetite is also going up, in
view of easy financing options available from
the organised and unorganised financial
sector and also in view of higher disposable
income and increased family comfort criteria.
In the last two years, auto and two wheeler
loans showed higher growth than home
and personal loans. Both in fact accounted
for 70% of overall retail loan growth. Thus
the demand in Retail Segment Loans has
been tremendous and keeping in view the
future potential, various banks have been
launching a number of retail lending
schemes for which plethora of necessary
guidelines are being issued. “However, it has
been observed that more often than not,
these circulars merely go as a routine
instructions and in view of the lack of
marketing drive, substantial chunk of
business is not mobilised under otherwise
very competitive schemes”. It is felt expedient
that all these retail credit schemes should
be made customer friendly by simplification
of procedures and ready availability of entire
information/documents required to be
submitted by the prospective borrower at a
single nodal point. As far as the staff aspect
is concerned, the policy, documentation,
processing and appraisal need to be codified
in such a way that delays at the appraisal,
documentation and sanction level can be
obviated.
With the experience of the banking sector
in disbursing retail loans, it is observed that
the marketing, submission of application,
appraisal, disbursement and post
disbursement follow-up has a set pattern
of definite and defined set of activities. This
set of defined activities can be translated
into finite action points in which the
technology can be deployed, thereby
helping the bank to reduce the operational
overheads. The disposal can also be made
time bound so as to eliminate probability
of complaints arising out of delays.
However, as a first step the concerned Bank
must reformulate the entire gambit of retail
credit schemes under a single umbrella of
“Retail Schemes”. The existing schemes
should be further fine tuned with certain
changed procedures so that at least
one scheme out of the entire
bouquet of Retail Schemes
meets the requirement and
taste of every customer. In
the present day
competitive scenario,
the customer centric
schemes need to be
developed which
means under
housing loan
scheme, there
could be a dozen
subsets/types of
schemes with
different tastes and
flavours. These
schemes may be
developed for NRIs,
We need to be more
customer centric and
computer savvy for
augmenting the Retail
Credit Portfolio.
15IBA BULLETINAUGUST 2005
professionals, builders, hospitals, schools,
societies and even for repair and
refurnishing purposes.
It is in this context that banks may consider
setting up a helpline for retail products. The
helpline can be set-up in three ways – (i)
Interactive/Integrated Voice Response
Helpline, (ii) Use of Web Technology & (iii)
Setting up of Retail Marts.
Interactive/Integrated Voice Response
System
This type of response system will need to
be outsourced leading to delegation of an
intensive business process to an outside
service provider who owns, administers and
manages according to the defined set of
matrics. This in turn means delegating back
end functions which are necessary to run a
business but do not form a part of the core
business. It will involve transfer of direct
managerial responsibility but not
accountability to a 3rd party service provider
who performs services previously delivered
by internal staff and management within
agreed service level agreements.
The distinct advantages of this service for
retail lending are as under :
1. In a highly competitive and IT driven
banking industry, the deployment of the
technology and its continuous
upgradation is extremely expensive and
complex activity.
2. The technology needs to be fine-tuned
at regular intervals by deploying latest
tools for which the skilled and
contemporary manpower is required. It
is a major constraint to retain technical
and skilled manpower especially in the
public sector banks.
3. The bank can focus on their core
activities including marketing and
recovery thereby leaving mundane
tasks to specialised vendors who can
handle such activities more efficiently
with lesser cost.
4. As the cost of retention of the employees
in the organisation is becoming a major
expense, the outsourcing would reduce
the operational overheads by ensuring
optimum utilisation of limited manpower.
5. The bank would be transparent to any
technological upgradation or in other
activities thereby reducing their
involvements in such activities.
The Interactive/IVRS can be set up in two ways
• Setting up of Call Centres
• Setting up of Direct Selling Agents
(DSAs)
Call Centres
A Call Centre is the room or rooms where
telemarketers sit at phone banks talking with
customers or prospective customers. There
are two kinds of call centres : (i) Inbound and
(ii) Outbound. An inbound call centre receives
calls as and when a customer calls a toll free
(1-800) number with a question about a retail
credit product. In an outbound call centre,
the telemarketers call the customers or the
prospective customers. Outbound call centres
often use an automatic dialer, a setup in which
a computer dials random phone numbers
from a given file and then transfers any
answered call to an available telemarketer.
Call centres have been aided by a range of
telecommunications and computer
technologies, including automatic call
distribution (ACD), interactive voice response
(IVR), computer telephony integration (CTI),
which allows the action of the computer to
be synchronised with what is happening on
the phone.
Direct Selling Agents (DSAs)
DSAs are appointed to market new business
as per terms and conditions of Retail Credit
Schemes. The DSAs also assess the financial
worthiness and facilitate collection,
compilation and collation of pre-appraisal
documents then the complete information
is processed as per the predefined norms of
the Bank and if the proposal merits sanction,
it is put forth before the Sanctioning
Authority. The entire documentation and
disbursement formalities are completed by
DSAs. The post disbursement follow-up,
timely recovery etc. is also ensured by such
DSAs. The Bank is involved in overall quality
improvement and policy formulation.
Use of Web Technology
At present, the Banks have created many
outlets including the brick and mortar
structure to offer above activities to the
customers. However, the current set up
necessitates large investments in setting up
such infrastructure and also requires
substantial expenses in terms of
maintenance of the infrastructural
overheads, staff etc. on an ongoing basis. As
most of the above activities have clear and
well-defined processes, the technology can
be used to a large extent thereby minimising
the operational overheads.
With a view to minimise these infrastructural
related overheads, the concept of Web
Banking has been picking up during the last
few years in the global markets. In the Web
based Banking concept, the ‘Brick and Mortar’
structure of the Banks gets converted into a
‘Click and Portal’ Banking. The branches are
not required to have a physical
infrastructure in the shape of a building and
instead the Web Based Bank model offers
the concept of the banking transactions
through the Internet or through the
privately hosted websites.
Each web bank sets up a highly secured,
versatile, efficient and customer friendly
16 IBA BULLETINAUGUST 2005
Website through which the customers can
either download or fill up the forms online for
various banking applications including for
opening of account or taking any other facility
such as funds transfer, mortgage etc. The
customer can interact and transact their
banking business at their homes/offices or at
any other convenient place by connecting the
Website of that Bank through the Internet.
A highly secured interactive website may
contain the details of such schemes which
interalia include the eligibility criteria,
prescribed documentation and other
formalities, EMI etc. The preliminary
information and the application form can be
downloaded or may be submitted online by
the prospective customers through the well-
articulated navigation screens which would
reduce the frequent visits to the branch by
such customers. It would also reduce the
reaction time in the decision making as the
back end staff can continuously monitor and
do the appraisal thereby conveying a prompt
decision to the customers.
With the well defined processes in place to take
a decision, large sets of such processes which
are required for appraisal of customers can also
be computerised and the decision can be
arrived at, with least human intervention.
For completion of the post disbursal
formalities, the customers may either visit a
branch or a back office which would be
limited in each city thereby ensuring the
central repository of such sensitive
documents.
Based on the agreement between the
customers and the Bank, the post disbursal
follow up can also be computerised by
generating the self-contained timely
reminders and even sending the triggers to
the mobile phones or through e-mail.
Continuous default can be contained and
wherever required the matter can be
personally followed up thereby avoiding the
need for fleet of persons involved in the post
disbursement follow up and recovery process.
Setting up of Retail Marts
As a step to give focussed growth to the
Retail Credit portfolio, the Bank may open
‘Retail Marts’ at prominent locations. These
Marts should be compact and self-contained
offices to deal with marketing, disbursal and
post disbursal process relating to the Retail
Credit Schemes. Such Retail Marts should be
manned by skilled, courteous and efficient
officials and should be supported with latest
technological tools such as Kiosks, E-mail
counters and comprehensive software to
provide quick decisions on the request of
the customers.
It is felt that with highly focussed and well-
equipped Retail Marts, substantial volumes
can be generated for the Retail Credit
Schemes. This would help improving the
bottom line of the Bank and would also give
enough publicity to the Bank.
Steps to increase the retail credit portfolio
within a Bank
● The existing policies and procedures of
the various retail credit schemes should
be made more customer savvy and the
processes should be fine-tuned to reduce
the paper work thereby improving the
reaction time to the customer.
● The identified team should be
comprehensively trained on the
complete suite of the retail credit
products. Special seminars should be
held at all levels so that the message
and intent of the top management of
giving special thrust to retail credit
percolates down at the operating level.
● The helpline policy for retail credit may
be articulated to ensure that repetitive
and mundane activities involved in the
complete cycle of marketing and
managing such retail credits, may be
entertained through call centres. This
would provide round the clock
infrastructure and assistance to the
existing and prospective customers at
their convenience.
● The Corporate Intranet may include
updated circulars on various retail
credit schemes which can be accessed
by the concerned staff through the
click of a mouse. The Intranet may also
include list of Frequently Asked
Questions (FAQs) by the customers so
that experience of a customer of a
particular branch/region may be shared
by all concerned.
● The banks should set up a
comprehensive secured website which
should cater to the requirement of
application form and other relevant
details for various schemes. The
customers may fill the form online
thereby minimising the visits of the
customer to the branch.
In a nutshell, we need to be more customer
centric and computer savvy for augmenting
the Retail Credit Portfolio. ❑
IBA BulletinFor Subscription kindly contact the Communication Department, IBA
Tel. : 022-2217 40 40 • Fax : 022-2218 42 22 • [email protected]
Y2K38: Problem and aPossible Way Out
Dr. Ashutosh Saxena
17IBA BULLETINAUGUST 2005
The greatestdanger with theyear 2038problem is itsinvisibility.Softwarecompanies willprobably notthink of trying outa Year 2038scenario beforedoomsday strikes.Of course, therewill be somewarning ahead oftime. Schedulingsoftware, billingprogrammes,personal remindercalendars andother such piecesof code that setdates in the nearfuture will fail assoon as one oftheir target datesexceeds 19-Jan-2038, assuming atime_t is used tostore them.
The Problem
It is quite possible that in the firstmonth of the year 2038 manycomputers will encounter a date-related bug resulting inaccurate.Just as Y2K problems arise from
Bonds and Polices etc. This problem of insufficientstorage for date variable can cause great errors intheir Books of account and reflect in major disaster.Software for, mortgage calculation, vital statistics andmany other applications may need to frequently andreliably examine a century or two forward andbackward.
The problem that results from computing dates intothe year 2038 and beyond in 32-bit operating systems.Unix and other C (and possibly some JAVA)applications represent time as the number of secondsfrom January 1, 1970. The 32-bit variable (time_t) thatstores this number overflows in the year 2038 andbecomes December 13, 1901. However, even today,any date calculations forecasted beyond that timewill be erroneous. By the year 2038, the time_trepresentation for the current time will be over 2 140000 000 and that is the problem. A modern 32-bitcomputer stores a “signed integer” data type, such astime_t, in 32 bits. The first of these bits is used for thepositive/negative sign of the integer, while theremaining 31 bits are used to store the number itself.The highest number these 31 data bits can storeworks out to exactly 2 ,147,483,647. A time_t value ofthis exact number, 2,147,483,647, represents Tuesday,January 19, 2038, at 7 seconds past 3:14 AM GreenwichMean Time. So, at 3:14:07 AM GMT on that fateful day,every time_t used in a 32-bit C or C++ or JAVA programwill reach its upper limit. One second later, on19-January-2038 at 3:14:08 AM GMT, disaster strikes.Table 1. gives more clarity on the exact time_trepresentations.
What causes it?
Unix and Unix-like operating systems do notcalculate time in the Gregorian calendar, they simplycount time in seconds since their arbitrary “birthday”,GMT 00:00:00, Thursday, January 1, 1970. The industry-wide practice is to use a 32-bit variable for this number(32-bit signed time_t). Imagine an odometer with 32
programmes not allocating enough digits to the year,Y2K38 problems arise from programmes notallocating enough bits to internal time.
The effect of this bug is hard to predict. Some expertsare of opinion that this bug can cause seriousproblems on many platforms, especially Unix andUnix-like platforms, because these systems will “runout of time”. Starting at GMT 03:14:07, Tuesday, January19, 2038, one may expect to see lots of systems aroundthe world breaking satellites falling out of orbit,massive power outages (like the 2003 North Americanblackout), hospital life support system failures, phonesystem interruptions, banking errors, etc. One secondafter this critical second, many of these systems willhave wildly inaccurate date settings, producing allkinds of unpredictable consequences. In short, manyof the awful predictions for the year 2000 are muchmore likely to actually occur in the year 2038, considerthe year 2000 just a dry run. In case if we sit on this
issue for another 30 years before addressing it,consider that reports of temporal echoes of the
2038 problem are already starting to appear infuture date calculations for mortgages and vital
statistics.
Most of the Banks, Financial Institutionsand Insurance companies servers are
running on Unix or Unix like OS, willneed to react now, as many
product and services offeredby them are for long
duration such asL o a n s ,
18 IBA BULLETINAUGUST 2005
”
”Dr. Saxena is Faculty, Institute for
Development and Research in
Banking Technology, Hyderabad.
wheels, each marked to count from 0 and 1(for base-2 counting), with the end wheelused to indicate a positive or negativeinteger. The largest possible value for thisinteger is 2**31-1 = 2,147,483,647 (over twobillion). 2,147,483,647 seconds after Unix’sbirthday corresponds to GMT 03:14:07,Tuesday, January 19, 2038. One second later,many Unix systems will revert to their birthdate (like an odometer rollover from 999999to 000000). Because the end bit indicatingpositive/negative integer may flip over,systems may revert the date to 20:45:52,Friday, December 13, 1901 (whichcorresponds to GMT 00:00:00 Thursday,January 1, 1970 minus 2**31 seconds).
Table 1. Exact time_t representations of Dateand Time in signed 32-bits datatype.
Date & time time_tre-presentation
1-Jan-1970, 12:00:00 AM GMT 0
1-Jan-1970, 12:00:01 AM GMT 1
1-Jan-1970, 12:01:00 AM GMT 60
1-Jan-1970, 01:00:00 AM GMT 3 600
2-Jan-1970, 12:00:00 AM GMT 86 400
3-Jan-1970, 12:00:00 AM GMT 172 800
1-Feb-1970, 12:00:00 AM GMT 2 678 400
1-Mar-1970, 12:00:00 AM GMT 5 097 600
1-Jan-1971, 12:00:00 AM GMT 31 536 000
1-Jan-1972, 12:00:00 AM GMT 63 072 000
1-Jan-2003, 12:00:00 AM GMT 1 041 379 200
1-Jan-2038, 12:00:00 AM GMT 2 145 916 800
19-Jan-2038, 03:14:07 AM GMT 2 147 483 647
Which operating systems and platforms areaffected by it?
So far, the few operating systems are notfound susceptible to the 2038 bug includevery new versions of Unix and Linux portedto 64-bit platforms, one may refer to theonline list at the site in [1]. A large number ofmachines, platforms and applications couldbe affected by the 2038 problem. Most ofthese will, hopefully get decommissionedbefore the critical date. However, it is possiblethat some machines going into service now,or legacy systems, which have never beenupgraded due to, budget constrains, maystill be operating in 2038. These may includeprocess control computers, space probecomputers, embedded systems in traffic lightcontrollers, navigation systems, etc. and it
may not be possible to upgrade many ofthese systems. Clock circuit hardware thathas adopted the Unix time convention mayalso be affected if 32-bit registers are used.While 32-bit CPUs may be obsolete indesktop computers and servers by 2038, theymay still exist in microcontrollers andembedded circuits. Embedded functionspresent a serious maintenance problem forall rollover issues like the year 2038 problem,since the package part number and othermarkings usually give no indication of thedevice’s internal function. For instance, theZ80 processor was available till late 2000 asan Embedded Function withinprogrammable devices. Such embeddedfunctions present a serious maintenanceproblem for Y2K38 and similar rollover issues,since the package part number and othermarkings typically give no indication of theinternal function.
This problem is somewhat easier to fix thanthe Y2K problem on mainframes, fortunately.Well-written programmes can simply berecompiled with a new version of the librarythat uses, for example, 8-byte values for thestorage format. This is possible because thelibrary encapsulates the whole time activitywith its own time types and functions.
Some Unix vendors have already started touse a 64-bit signed time_t in their operatingsystems to count the number of secondssince GMT 00:00:00, Thursday, January1, 1970. Programmes or databaseswith a fixed field width shouldprobably allocate at least 48bits to storing time values.64-bit Unix time would besafe for the indefinitefuture, as this variablewould not overflowuntil 2**63 or 9,223,372, 036, 854, 775, 808(over nineq u i n t i l l i o n )seconds after thebeginning of theUnix epoch -corresponding toGMT 15:30:08,Sunday, December4, 292,277,026,596.This is a ratherartificial and arbitrarydate, considering that itis several times theaverage lifespan of a sunlike our solar system’s, the
The Y2K38 problem
involves the basic
system time-keeping
from which most other
time and date
information is derived,
while the Y2K problem,
mostly involves
application programs.
19IBA BULLETINAUGUST 2005
very same celestial body by which wemeasure time. The sun is estimated at presentto be about four and a half billion years old,and it may last another five billion yearsbefore running out of hydrogen and turninginto a white dwarf star. Thus a
straightforward approach is switching to64-bit computing and solves the problem.
What can one do about it?
If you are a programmer or a systemsintegrator who needs to know what you
can do to this problem. A quick check withthe following Perl and C script may helpdetermine if your computers will haveproblems (this requires Perl and/or C to beinstalled on your system):
These are incorrect outputs; check whetherthe date and time outputs come correct afterthe critical event second in your machine?
Further a checklist of suggestions
1. An organisation called The Open Group(formerly X/Open), which maintains theUnix specification and trademark, has anumber of programmingrecommendations [2] that should befollowed by developers to deal with theyear 2038 and other problematic dates.
2. If you are working with Open Source code,a free library at [3] may be a useful referencefor patching existing code for high-accuracy long-term time calculation
3. Also, see an article [4] regarding Solutionsto the Year 2000 Problem. Though fixingthe Y2K bug may not directly help infixing the Y2K38 bug but many of thesuggestions from this article can beapplied to the 2038 problem too.
How about making time_t unsigned in32-bit software?
One of the quick-fixes that has beensuggested for existing 32-bit software is tore-define time_t as an unsigned integerinstead of a signed integer. It sounds like agood idea at first. We already know that mostof the standard time_t handling functionsdo not accept negative time_t values anyway,
so why not just make time_t into a data typethat only represents positive numbers?
An unsigned integer does not have to wasteone of its bits to store the plus/minus signfor the number it represents. This doublesthe range of numbers it can store. Whereasa signed 32-bit integer can only go up to 2147 483 647, an unsigned 32-bit integer cango all the way up to 4 294 967 295. A time_tof this magnitude could represent any dateand time from 12:00:00 AM 1-Jan-1970 allthe way out to 6:28:15 AM 7-Feb-2106, surelygiving us more than enough years forsoftware to dominate the planet.
Well, there is a problem. time_t is not justused to store absolute dates and times. It isalso used, in many applications, to storedifferences between two date/time values, i.e.to answer the question of “how much time isthere between date A and date B?”. In thesecases, we do need time_t to allow negativevalues. It is entirely possible that date B comesbefore date A. Blindly changing time_t to anunsigned integer will, in these parts of aprogramme, make the code unusable.
Changing time_t to an unsigned integerwould, in most programmes, be robbing Oneto pay Other. You would be fixing one set ofbugs (the Year 2038 Problem) only tointroduce a whole new set as the time
Perl C
$ENV{‘TZ’} = “GMT”; #include <stdio.h>for ($clock = 2147483641; $clock < #include <time.h>2147483651; $clock++) print ctime($clock); int main()
{ time_t i;i=2147483641;for(;i<2147483651;i++)printf(“%s”,ctime(&i));
}
The output of this script on GNU/Linux (kernel 2.4.20-8) for both Perl and C:
Tue Jan 19 03:14:01 2038 Tue Jan 19 08:44:01 2038Tue Jan 19 03:14:02 2038 Tue Jan 19 08:44:02 2038Tue Jan 19 03:14:03 2038 Tue Jan 19 08:44:03 2038Tue Jan 19 03:14:04 2038 Tue Jan 19 08:44:04 2038Tue Jan 19 03:14:05 2038 Tue Jan 19 08:44:05 2038Tue Jan 19 03:14:06 2038 Tue Jan 19 08:44:06 2038Tue Jan 19 03:14:07 2038 Tue Jan 19 08:44:07 2038Fri Dec 13 20:45:52 1901 Sat Dec 14 02:39:12 1901Fri Dec 13 20:45:53 1901 Sat Dec 14 02:39:13 1901Fri Dec 13 20:45:54 1901 Sat Dec 14 02:39:14 1901
differences not being computed properly.
Not very obvious
The greatest danger with the Year 2038Problem is its invisibility. The more-famousYear 2000 is a big, it only takes a few secondsof thought, even for a computer-illiterateperson, to imagine what might happenwhen 1999 turns into 2000. Also this Bugreceived large amount of media attention.But January 19, 2038 is not nearly as obvious.Software companies will probably not thinkof trying out a Year 2038 scenario beforedoomsday strikes. Of course, there will besome warning ahead of time. Schedulingsoftware, billing programmes, personalreminder calendars, and other such piecesof code that set dates in the near future willfail as soon as one of their target datesexceeds 19-Jan-2038, assuming a time_t isused to store them.
Worse, the parts of their software they hadto fix for Year 2000 Compliance will becompletely different from the parts of theirprograms that will fail on 19-Jan-2038, sofixing one problem will not fix the other.Most programmes written in the C or otherhigh level programming language arerelatively immune to the Y2K problem, butsuffer instead from the Year 2038 problem.This problem arises because most C
20 IBA BULLETINAUGUST 2005
programmes use a library of routines calledthe standard time library (time.h). This libraryestablishes a standard 4-byte format for thestorage of time values and also provides anumber of functions for converting,displaying and calculating time values.
Some Contrast Views
One school of thought feels that thisimpending disaster will NOT strike too manypeople and consider as non-problem. Theyreason that, by the time 2038 rolls around,most programmes will be running on 64-bitor even 128-bit computers. In a 64-bitprogrammes, a time_t could represent anydate and time in the future out to 292 000000 000 A.D., which is about several timesthe currently estimated age of the universe.
The problem with this kind of optimism isthe same root problem behind most of theYear 2000 concerns that plagued thesoftware industry in previous years : LegacyCode. Developing a new piece of software isan expensive and time-consuming process.It is much easier to take an existingprogrammes that we know works, and codeone or two new features into it, than to throwthe earlier program out and write a new onefrom scratch. This process of enhancing andmaintaining “legacy” source code can go on
for years, or even decades. The MS-DOS layer,still at the heart of Microsoft’s Windows 98and Windows ME was first written in 1981.Much of the financial software hit by thevarious Year 2000 bugs had also been usedand maintained since the 1970s, when theyear 2000 was still thought of as more of ascience fiction movie title than an actualimpending future. Surely, if this software hadbeen written in the 1990s its Year 2000Compliance would have been crucial to itsauthors, and it would have been designedwith the year 2000 in mind.
One may note that computer designers canno longer afford to make a “clean break” withthe computer architectures of the past. Noone wants to buy a new kind of PC if it doesnot run all their old PC’s programmes. So, justas the new generation of Microsoft Windowsoperating systems has to be able to run theold 16-bit programmes written for Windows3 or MS-DOS, similarly any new PC architecturewill have to be able to run existing 32-bitprograms in some kind of “backwardcompatibility” mode. Even if every PC in theyear 2038 has a 64-bit CPU, there will be a lotof older 32-bit programs running on them.
The other school of thought feels that theY2K38 threat is more likely to result in aircraftfalling from the sky, glitches in life-support
systems, and nuclear power plant meltdownthan the Y2K threat, which is more likely todisrupt inventory control, credit card payments,pension plans etc. The reason for this is that theY2K38 problem involves the basic system time-keeping from which most other time and dateinformation is derived, while the Y2K problem,mostly involves application programs.
Well whatever may be the thoughts we mustdo our homework and keep ourselvesupdate properly in order to run our systemaccurately in present for any future dates.
Acknowledgements
The author acknowledges Shri R. Gandhi, In-charge Director, IDRBT for initiation andmotivation and the Computing and Internetcommunity working in this area.
References
1. http://www.deepsky.com/~merovech/outputs.html
2. http://www.rdg.opengroup.org/public/tech/base/year2000.html
3. http://cr.yp.to/libtai.html
4. http://www.deepsky.com/~merovech/millennium.html ❑
CD onVIII Bipartite Settlement
for
Workmen Staff
and
Joint Note on
Wage Revision
for Officers
available at Rs.300/-Contact : Publications Department, Indian Banks’ Association, Stadium House,
6th floor, Block 3, V N Road, Mumbai 400 020.Phone : 022-22894500/22894530
21IBA BULLETINAUGUST 2005
bringing it to the main stream of economy through
reformation. In this Union Budget 2005-06, the
Hon’ble Finance Minister has introduced new
schemes to unearth black money and assets. He was
concerned about large cash transactions, especially
withdrawal of cash which become part of black
economy.
Therefore, two anti tax-evasion measures are
suggested in his budget speech. Firstly, Banking Cash
Transaction Tax and secondly, reporting to the
Government, all deposits which are exempt from TDS
on interest by banks.
Meaning & Applicability
The Banking Cash Transaction Tax (BCTT) means
Tax leviable on the taxable banking
transactions.
Taxable Banking Transaction (TBT) is
described below :
A transaction, being
withdrawal of Cash
by whatever
Banking CashTranscation Tax - A New step in
Indian Budget P.K. Barman
BCTT is leviableon a bankingtransaction, beingwithdrawal of Cashby whatever modeon any single dayfrom an account(other than asavings bankaccount)maintained withany scheduledbank, exceeding –
● Rs. 25,000/- incase suchwithdrawal isfrom theaccountmaintained byany individualor HinduUndividedFamily (HUF);
● Rs. 1,00,000/-in case suchwithdrawal isfrom theaccountmaintained bya person otherthan anyindividual orHUF.
Introduction
Our Hon’ble Finance Minister
Shri P. Chidambaram has always
shown the new path of revenue
collection, keeping in mind to
unearth black money and
mode on any single day from an account (other than a
savings bank account) maintained with any scheduled
bank, exceeding –
(i) Rs. 25,000/- in case such withdrawal is from the
account maintained by any individual or Hindu
Undivided Family (HUF);
(ii) Rs. 1,00,000/- in case such withdrawal is from
the account maintained by a person other than
any individual or HUF.
However such banking transaction tax is leviable
from the account holder whose cash is withdrawn
from any scheduled bank.
The rate of such tax is 0.10% of the value of every
such taxable banking transaction.
The value of taxable banking transaction shall be
the amount of cash withdrawn.
As for example Rs. 26,000/- is drawn in cash in a
single day from current account of M/s. X Enterprise
(a proprietorship business of Mr. X) or Rs. 1,05,000/- is
drawn in cash in a single day from Cash Credit
Account of M/s. XYZ. Co. Ltd., from any scheduled
bank, then Rs. 26/- or Rs.105/- shall be debited by the
scheduled bank respectively in the current account
of M/s. X Enterprise or Cash Credit account of
M/s. XYZ Co. Ltd. as BCTT.
A transaction, being receipt of cash from any
scheduled bank on any single day on encashment
of one or more term deposits, whether on maturity
or otherwise, from that bank exceeding –
21IBA BULLETINAUGUST 2005
22 IBA BULLETINAUGUST 2005
Shri Barman, M.Com., F.C.A. is
founder Partner of M/s. P. K. Barman
& Co. (Chartered Accountants),
Jamshedpur. He is concurrent
auditor of several Banks.
(i) Rs. 25,000/-, in case such term deposit
or deposits are in the name of any
individual or HUF;
(ii) Rs. 1,00,000/-, in case such term deposit
or deposits are by any person other
than any individual or HUF.
However such banking transactions tax is
payable by the persons who receives the
cash on encashment of term deposit(s). The
rate of such tax is also 0.10% of the value of
every taxable banking transaction. Here the
value of taxable banking transaction shall
be the amount of cash received on
encashment of term deposit(s). However no
banking cash transaction tax shall be payable
if the amount of the term deposit(s) are
credited to any account with the bank.
As for example, Rs. X is the maturity value of
a fixed deposit in a scheduled bank and the
depositor or the nominee is eligible to
encash the FD. In such a case, Rs. Y=
(0.10/100.10 * Rs.X) shall be charged on the
depositor and Rs. (X-Y) should be paid in
cash by the scheduled bank
Here ‘scheduled bank’ means (i) State Bank
of India and it’s subsidiary banks, (ii) banks
constituted under the Banking Companies
(Acquisition and Transfer of Undertakings)
Act, 1970 or the Banking Companies
(Acquisition and Transfer of Undertakings)
Act, 1980, (iii) any other bank included in the
Second Schedule of the Reserve Bank of India
Act, 1934.
However BCTT is applicable to whole of India
except Jammu & Kashmir with effect from
01st June,2005.
Collection, Deposit and Recovery
Every scheduled bank shall collect the BCTT
from every person who enters into a TBT with
that bank. The BCTT collected during any
calendar month shall be paid by every
scheduled bank to the credit of the Central
Government by the 15th day of the month
immediately following the said calendar
month. Any scheduled bank, who fails to collect
BCTT, shall, not withstanding, such failure, be
liable to pay the tax to the credit of the Central
Government within specified time.
As per provision of the Banking Cash
Transaction Tax Rules, 2005
a) every branch of a scheduled bank shall
keep and maintain in Form No.1 the
particulars of taxable banking
transactions entered into in that branch;
b) every scheduled bank which is required
to collect and pay BCTT in respect of all
its branches, pay the amount of such
tax to the credit of the Central
Government by remitting it into any
branch of the Reserve Bank of India or
State Bank of India or any authorised
bank accompanied by a BCTT Challan.
Furnishing of monthly BCTT Statement to
the Income Tax Authority
Every scheduled bank shall furnish a
statement of taxable banking
transactions in respect of
which it is required to
collect tax during a
month, in Form No. 2 to
the income tax
authority specified
in this behalf by the
Board on or before
the expiry of the
m o n t h
i m m e d i a t e l y
following the said
month on a
computer media, in
accordance with the
following :
‘‘”
BCTT is introduced inthe budget to preventmoney laundering, taxevasion and blackmoney generation. Themain object is ‘not totax but to track’. Theintension is great butapplication should notbe compelled to bearthe cost by non-targeted group.
23IBA BULLETINAUGUST 2005
i) the computer media conforms to the
following specifications:-
a) CD ROM of 650 MB capacity or
higher capacity; or
b) 4mm 2GB/4GB (90M/120M) DAT
Cartridge; or
c) Digital Video Disc
ii) if the data relating to the schedules
is copied using data compression or
backup software utility, the
corresponding software utility or
procedure for its decompression or
restoration shall also be furnished;
iii) the statement shall be accompanied
by a certificate regarding clean and
virus free data.
Submission of Annual Return
Every scheduled bank (i.e., assessee) shall
submit annual return in Form No. 3 in
computer media, to the Assessing Officer or
any other authority or agency authorised
by the Central Board of Direct Taxes (CBDT)
within 31st July immediately following the
financial year. The particulars required to be
furnished in the Schedules A & B to Form
No. 3 shall be furnished on a computer
media, in accordance with the following :
i) the computer media conforms to the
following specifications :
a) CD ROM of 650 MB capacity or
higher capacity; or
b) 4mm 2GB/ 4GB (90M/ 120M) DAT
Cartridge; or
c) Digital Video Disc;
ii) if the data relating to the schedules is
copied using data compression or
backup software utility, the
corresponding software utility or
procedure for its decompression or
restoration shall also be furnished;
iii) the statement shall be accompanied
by a certificate regarding clean and
virus free data.
Such Annual Return shall be signed and
verified
i) in case of a scheduled bank, being a
company, by the managing director or
a director thereof:
ii) in case of a scheduled bank, not being
a company by the principal officer
thereof.
Where any assessee fails to furnish the above
Return within the prescribed time, the
Assessing Officer may issue a notice to such
assessee to furnish return within 30 days
from the date of service of the notice.
Any assessee who fails to furnish the return
within the prescribed/allowed time or having
furnished a return but discovers any
omission or wrong statement therein, may
furnish a return or a revised return, as the
case may be, at any time before the
assessment is made.
Assessment and Rectification of Mistakes
The Assessing Officer is empowered to make
assessment and demand to produce
accounts or documents or evidence, as he
requires for the purpose of such assessment.
The Assessing Officer after considering such
accounts, documents or other evidences and
any other relevant material, shall, by an order
in writing assess the BCTT payable or
refundable. Such assessment shall be made
within expiry of 2 years from the end of the
relevant financial year. Every assessee, in case
any amount is refunded to it on assessment,
shall, within 30 days from the date of receipt
of such amount, refunds to the concerned
person from whom such amount was
collected.
The Assessing Officer may amend any order
passed by him to rectify any mistake
apparent from record, within 1 year, from
the end of the financial year in which the
order was passed. Any amendment which
has the effect of enhancing an assessment
or reducing refund or otherwise increasing
the liability of the assessee, shall be made
only after giving the assessee a reasonable
opportunity of being heard.
Levy of Interest and Penalty
Every assessee who fails to credit the BCTT
to the account of Central Government within
15th day of the month immediately
following said calendar month, shall pay
simple interest @ 1% of such tax for every
month or part of a month by which such
credit of the tax or any part thereof is
delayed.
An assessee who fails to collect the whole or
any part of the BCTT, shall be liabile to pay by
way of penalty, a sum equal to the amount of
BCTT that it fails to collect in addition to
paying the tax and interest on it.
Any assessee who having collected the BCTT,
fails to pay such tax to the Credit of the
Central Government by the 15th day of the
month immediately following the said
calendar month, shall be liable to pay by
way of penalty Rs.1,000/- for every day
during which the failure continues in
addition to paying the tax and interest on it.
However such penalty shall not exceed the
amount of BCTT that it fails to pay.
If an assessee fails to furnish annual return
in due time or within time allowed by
Assessing Officer through any notice, shall
be liable to pay, by way of penalty, Rs.100/-
for every day during which the failure
continues.
If the Assessing Officer in the course of
proceedings relating to BCTT satisfied that
any person has failed to comply with a notice,
24 IBA BULLETINAUGUST 2005
he may direct to such person to pay, by way
of penalty in addition to any BCTT and
interest, if any, payable by him, Rs.10,000/- for
each such failure.
No penalty shall be imposed under any of
the above situation, if the assessee proved
that there was reasonable cause for the
failure. No order imposing a penalty shall
be made unless the assessee has been given
a reasonable opportunity of being heard.
Where any tax, interest or penalty is payable
in consequence of any order, the Assessing
Officer shall serve upon the assessee a notice
of demand in Form No. 4 specifying the sum
payable.
Appeals
Any assessee aggrieved by any assessment
order, may appeal to the Commissioner of
Income Tax (Appeals) within 30 days from
the date of receipt of the order of the
Assessing Officer. Every appeal shall be made
in Form No. 5 describing the grounds of
appeal and the form of verification
appended thereto relating to an assessee.
Form No. 5 shall be signed and verified by
the person who is authorised to sign the
return of taxable banking transaction. Also
appeal filed to the C.I.T.(Appeals) by any
assessee shall be accompanied by a fee of
Rs. 1,000/-. Any assessee aggrieved by an
order passed by C.I.T. (Appeals) may appeal
to the Appellate Tribunal against such order.
Also the Commissioner of Income Tax may,
if he objects to any order passed by the
C.I.T.(Appeals), direct the Assessing Officer to
appeal to the Appellate Tribunal against
such order. Every such appeal to Appellate
Tribunal shall be filed within 60 days from
the date of receipt of the order by the
assessee, or by the C.I.T as the case may be.
Every such appeal shall be in Form No. 6
describing the grounds of appeal and the
form of verification appended thereto
relating to an assessee. Form No. 6 shall be
signed and verified by the person who is
authorised to sign the return of taxable
banking transaction. Also appeal filed to the
Appellate Tribunal by any assessee shall be
accompanied by a fee of Rs. 1,000/-.
Prosecution
If a person makes a statement in any
verification or delivers an account or
statement, which is false, which he either
knows or believes to be false or does not
believe to be true, he shall be punishable
with imprisonment for a term which extend
to 3 years and with fine. Notwithstanding
anything contained in the Code of Criminal
Procedure, 1973, the above offence shall be
deemed to be non-cognizable within the
meaning of that Code. A person shall not be
proceeded against for any offence under
BCTT except with the previous sanction of
the Chief Commissioner of Income Tax.
Deduction is respect of BCTT paid by the Tax
payer
Any amount paid as BCTT by a tax payer will
be allowed as a deduction under section
36(1)(xiii) while computing his business or
professional income w.e.f. assessment year
2006-07. It is subject to note that BCTT paid
by a person having no business or
professional income, cannot claim benefit
of this deduction.
Application of other Acts or Rule(s)
Where words and expressions, provisions
used but not defined but defined in the
Negotiable Instruments Act, 1881, the Reserve
Bank of India Act,1934, the Banking
Regulation Act, 1949, the Income Tax Act, 1961
or the rules and regulations made thereunder
shall have the meaning respectively assigned
to them in those Acts or the rules or the
regulations in relation to BCTT.
Conclusion
BCTT is introduced in the budget to prevent
money laundering, tax evasion and black
money generation. The main object is ‘not
to tax but to track’. The intension is great
but application should not be compelled
to bear the cost by non-targeted group.
This system may affect those who are
genuine tax payers and routing all
transactions through scheduled banks only
and specially have no income from
business. It is accepted fact that those who
evade tax do not carry out transaction
through scheduled banks. They neither
deposit, nor withdraw money from
scheduled banks.
On the other side, honest tax payers deposit
their entire receipts by way of sale proceeds of
business, rental and other incomes in the bank
and withdraw cash from bank for payment of
wages, salaries and other expenditures specially
by SSI or tiny units or small traders in rural and
semi urban areas of India. ❑
www.iba.org.in
Balancing Quality andQuantity in SHGs in India
R. Devaprakash
25IBA BULLETINAUGUST 2005
The leaps and
bounds in terms
of growth of SHGs
have brought in
attendant risks of
ensuring quality
in SHGs. There are
also many not-so-
serious players
who for the heck
of getting the kick
of SHG based
approach, have
come to adapt
SHG based
approach without
being convinced
of the seriousness
of the SHG
business.
banking leaving the rest to the MFI based Grameentype of lending or direct lending methodology.Anecdotal evidence suggests that there are over 26.9million clients covered by micro finance, of whichover 24.25 million clients are covered by SHG basedmainstream methodology. State-wise compilation ofSHG census put the total SHGs count at over 26million and out of which over 17.5 million have beencredit linked (1618476 million SHGs as credit linkedhas been reported as of March 2005). While 65% ofSHGs (roughly over 17 million SHGs) are denselylocated in the four southern states, leaving theremaining SHGs sparsely sprinkled across the rest ofthe states in India. There have been deliberateinterventions in the last two years by major playersin the sector including NABARD to address to thisinequity in distribution of SHGs. An estimate put the
micro finance NGOs at over 10000 out of over alakh of NGOs in India. There are over 800 MFIs,
over 4000 SHG federations and the total creditoutlay by all the micro finance entities is put at
around Rs. 10000 crores ( Rs. 6898 crores alonethrough SHG based lending). Of all the rural
credit products in India, there is no otherproduct, which has invaded the rural
credit inventory of banks than SHGlinkage banking which has
emerged as the mostsuccessful, viable,
sustainable andaccepted
Micro finance has come of ages inIndia and especially in the lastthree to four years there has beenan exponential growth in microfinance development. It is saidthat India brims with Self HelpGroups (SHGs) and over 91% ofthe Indian micro finance isthrough the SHG based linkage
product since the last decade. However the spreadand success of the program needs to spill overuniformly across the country.
The leaps and bounds in terms of growth of SHGshave brought in attendant risks of ensuring qualityin SHGs. There are also many not-so-serious playerswho for the heck of getting the kick of SHG basedapproach, have come to adapt SHG based approachwithout being convinced of the seriousness of theSHG business. The fact that for many of theGovernment programs, SHGs have become a formatto deliver the services though have caused someaberrations in quality and standards, but fairly goodnumber of Government programs like MahalirThittam of Tamil Nadu, Mission Shakti of Orissa, Veluguof Andhra Pradesh, Kudumbashree of Kerala to namea few, have been virtually anchoring the SHGmovement in the concerned states setting newstandards and ensuring best practices on SHGs whichremains largely appreciated and complements to thelarger efforts of the other stake holders in the sector.The target-based approach both for formation ofSHGs and credit linkage has been worrying factorwhich had its own negative implications on thequality of SHGs. In the game of ensuring largeroutreach, the challenge remains for largeGovernment programs promoted by key anchoringagencies like Women and Child DevelopmentDepartment and Panchayat and Rural Development.Department (which happens to take a lions share interms of number of SHGs promoted) of theGovernment to balance the quality of SHGs whilebroadcasting of SHGs over wider area.
SHG Rating
Rating of SHGs assumes importance as it is not onlya pre-appraisal tool but as well a self monitoringyardstick for the SHGs themselves for self evaluationwhich is a continuous process. Quality assessment of
Contd. on Page 35...
26 IBA BULLETINAUGUST 2005
Performance Highlights of
Public Sector Banks 2004-05
important parameters such as Total Assets,Deposits, Investments, Advances, Non-Performing Assets (Gross and Net), InterestIncome, Other Income, Total Income,Interest Expenditure, OperatingExpenditure, Total Expenditure, OperatingProfit, Provisions and Contingencies andNet Profit and important ratios like Credit-Deposit Ratio, Investment-Deposit Ratio,Spread to Total Assets, Operating expensesto Total Expenses, Return on Assets, CapitalAdequacy Ratio, NPA ratio and productivityratios. Significant features of the operationsof banks on each of the above-mentionedparameters are given below :
Total Assets – As on 31st March, 2005, totalassets of the public sector banks increasedto Rs. 17,58,207 crores from Rs. 14,71,428crores of the previous financial yearrecording a growth of 19.5 per cent during2005 as against 14.4 per cent of the previousyear. Higher growth in total assets is duelargely to inclusion of total assets of IDBILtd. in 2005. Excluding IDBI Ltd., the growthin total assets was marginally lower at 14.0per cent during 2004-05. 10 banks recordedhigher growth than the group average.Oriental Bank of Commerce tops the listwith a growth of 31.9 per cent, closelyfollowed by the Allahabad Bank (30.1 percent) and State Bank of Indore (29.5 percent). Bank of Maharashtra recorded lowestgrowth in assets with 2.1 per cent during2004-05.
Deposits – Total deposits mobilised by thePublic Sector Banks increased fromRs. 12,26,838 crores as on 31st March,2004 to Rs. 14,21,672 crores as on 31stMarch, 2005. Deposits showed a subdued
growth during 2004-05. Total depositsrecorded a growth of 15.9 per cent during2004-05, which is higher than 13.7 per centof the previous year. Excluding IDBI Ltd.,the total growth was only 14.6 per centduring 2004-05. 15 banks recorded highergrowth than the group average. OrientalBank of Commerce recorded the highestgrowth in deposits with a growth of 34.1per cent, closely followed by State Bank ofIndore with 32.5 per cent during 2004-05.Indian Overseas Bank recorded the lowestgrowth in deposits with 6.7 per centduring 2004-05. SBI and Associates as agroup recorded a growth of 16.8 per centas compared to nationalised banks’ groupwith a growth of 13.5 per cent during2004-05.
Investments – Banks’ investmentsshowed a lower growth of 8.5 per centduring 2004-05 as against the growth of14.7 per cent during 2003-04. In absoluteterms, the total investments increasedfrom Rs. 6,25,678 crores as at March 31st,2004 to Rs. 6,78,637 crores as on 31stMarch, 2005. Excluding IDBI Ltd., thegrowth in investment was only 4.5 per centduring 2004-05. Seven Banks recorded ahigher growth than the group average.Allahabad Bank recorded the highestgrowth in Investments with 22.1 per cent,closely followed by Punjab National Bankwith 20.3 per cent during 2004-05.Nationalised Banks as a group showed agrowth of 4.0 per cent during 2004-05,which is much lower than the previousyear’s growth of 17.3 per cent during 2003-04. SBI group as a whole recorded a growthof 5.2 per cent during 2004-05 as against10.9 per cent recorded in the previous year.
Advances - The year 2004-05 witnessedhigher credit off take by the commercial
banks. This was reflected in the totaldisbursement made by the PSBs during2004-05. Total advances of the banksjumped up from Rs. 6,32,740 crores as on31st March, 2004 to Rs. 8,48,340 crores ason 31st March, 2005 showing animpressive growth of 34.1 per cent asagainst the previous year’s growth of 15.2per cent. Excluding the IDBI Bank Ltd., thegrowth was 26.9 per cent during 2004-05.Eight banks recorded higher growth thanthe group average. United Bank of Indiashowed the maximum growth in advanceswith 43.02 per cent closely followed byState Bank of Indore with 41.1 per centand State Bank of Bikaner & Jaipur with39.7 per cent during 2004-05. Nationalisedbanks as a group recorded a growth of 25.7per cent during 2004-05 as against theprevious year’s growth of 14.5 per cent. Asfor SBI Group the growth was 29.1 per centduring 2004-05 as against 16.6 per centrecorded in the previous year.
Non-performing Assets (NPA) – During2004-05, both gross and net non-performing assets showed decline inabsolute terms and as percentage ofadvances inspite of the reduction in thetotal provisions towards non-performingassets as compared to the previous year.Persistent recovery set up coupled withclose monitoring of the assets could besighted as reasons for reduction in non-performing assets. Gross NPA of the PublicSector Banks decreased from Rs. 51,537crores as on 31st March, 2004 to Rs. 47,596crores as on 31st March, 2005 showing adeclined growth of (-) 7.6 per cent. NetNPA declined from Rs. 18,860 crores as on31st March, 2004 to Rs. 16,983 crores ason 31st March, 2005 recording a declinedgrowth of (-) 10.0 per cent. Six banks
Highlight
I n this note we analyse theperformance of public sector banks(except Punjab and Sind Bank) on
27IBA BULLETINAUGUST 2005
namely Bank of India, Bank of Maharashtra,Oriental Bank of Commerce, Vijaya Bank,State Bank of Indore and State Bank ofPatiala recorded higher growth in GrossNPA during 2004-05 as compared toprevious year. In the case of Net NPA, ninebanks recorded higher growth in net NPAthan the previous year. SBI Group recordedhigher net NPA than the previous year.
Income – Total Income of the Public SectorBanks recorded a growth of 3.8 per centduring 2004-05 as compared to 7.2 percent of the previous year. Excluding IDBILtd. the growth was only 1.4 per cent during2004-05. Growth in income in PSBs wasdue largely to higher contribution frominterest income than the fee basedincome. Non-interest income, which wasshowing a higher growth during the lastthree years, has recorded a declinedgrowth during 2004-05. This could be dueto lower treasury earnings during 2004-05. Interest income of the banks increasedfrom Rs. 1,09,572 crores during 2003-04to Rs. 1,19,098 crores during 2004-05recording a growth of 8.7 per cent asagainst 2.10 per cent during 2003-04. Onthe other hand, the other income of thebanks recorded a declined growth of (-)15.5 per cent during 2004-05 as againstthe previous year’s growth of 32.3 per cent.Interestly, the share of fee income in thetotal income declined to 16.6 per centduring 2004-05 as against 20.4 per cent ofthe previous year. Ten banks recordedhigher growth in income than the groupaverage. Allahabad Bank tops the list witha growth of 11.9 per cent, closely followedby State Bank of Mysore with 11.2 per centduring 2004-05.
Expenditure – Total expenditure(excluding provisions and contingencies)of the banks increased from Rs. 98,127crores during 2003-04 to Rs. 1,04,038crores during 2004-05 showing a growthof 6.0 per cent as against previous year’slower growth of (-) 0.6 per cent. ExcludingIDBI Ltd., the growth in total expenditurewas 3.0 per cent during 2004-05. Interestexpenditure recorded a higher growth of
3.5 per cent during 2004-05 as against theprevious year’s growth of (-) 5.9 per cent.Operating expenditure, on the other hand,recorded a lower growth of 11.1 per centduring 2004-05 as compared to 11.9 percent during 2003-04. Nationalised Banksand SBI Group recorded lower growth inoperational expenditure during 2004-05.14 banks recorded higher growth in totalexpenditure than the group averageduring 2004-05. Allahabad Bank (-2.9 percent), Indian Bank (-13.9 per cent) andState Bank of Saurashtra (- 6.5 per cent)were the only three banks, which recordeda decline in operating expenses than theprevious year.
Profit – The total operating profit of thePSBs declined from Rs. 39,536 croresduring 2003-04 to Rs. 38,799 crores during2004-05 recording a declined growth of(-) 1.9 per cent during 2004-05 as against33.1 per cent of the previous year. Thoughthe total provisions made by the banksincreased from Rs. 22,928 crores during2003-04 to Rs. 23,241 crores during2004-05, the growth was only marginal at1.4 per cent during 2004-05 as against 31.6per cent during 2003-04. Majority of thebanks have made lower provisions during2004-05 as compared to previous year. Netprofit of the banks also declined fromRs. 16,546 crores during 2003-04 toRs. 15,558 crores during 2004-05 recordinga declined growth of (-) 6.0 per cent asagainst 33.6 per cent of the previous year.Excluding IDBI Ltd., the decline is evensharper at (-) 7.8 per cent during 2004-05.None of the banks analysed in this noteshowed net loss during 2004-05. Ten banksrecorded higher growth in net profit thanthe previous year.
Capital Adequacy Ratio – All PSBs hadachieved the stipulated CRAR of 9 per centas on 31st March, 2005. United Bank of Indiatopped the list with a CRAR of 18.2 percent closely followed by Corporation Bankwith a CRAR of 16.2 per cent. 10 banksrecorded higher CRAR during 2004-05,than the previous year.
Return on Assets – Net Profit aspercentage to total assets (Return onassets) declined marginally from 1.1 percent during 2003-04 to 0.9 per cent during2004-05. 14 banks have higher ROA thanthe group average, of which 10 banks haveROA of more than 1 per cent. Andhra Banktopped the group with an ROA of 1.59 percent, followed by Oriental Bank ofCommerce with 1.41 per cent.
Credit-Deposit Ratio – Credit-DepositRatio (C/D) Ratio of public sector banksshowed considerable improvement during2004-05. This is largely due to higherdeployment of credit and lower resourcemobilization during 2004-05. C/D ratio ofthe banks improved from 51.6 per centduring 2003-04 to 59.7 per during 2004-05. Excluding IDBI Ltd, the ratio was 57.1per cent during 2004-05. IDBI Ltd. tops thelist with a C/D ratio of 300.7 per centfollowed by Bank of India with 71.1 percent and Corporation Bank with 68.1 percent. The lowest ratio of 44.9 per cent wasrecorded by Central Bank of India.
Investment-Deposit Ratio – As notedbefore, the investments of the banks werelower during 2004-05 as compared to theprevious year. This is reflected in theinvestment –Deposit (I/D) ratio also during2004-05. The I/D ratio of the banksdeclined from 51.0 per cent during2003-04 to 47.7 per cent during 2004-05.IDBI Ltd. with a ratio of 165.9 per cent topsthe group followed by UCO Bank andUnited Bank of India with 56.8 per centand Indian Bank with 51.5 per cent during2004-05. Bank of India recorded the lowestratio with 35.8 per cent during 2004-05.
Interest Spread – Interest spread or netInterest Income as percentage of totalassets declined marginally from 3.0 percent during 2003-04 to 2.9 per cent duringthe financial year 2004-05. In the case ofnationalized banks, interest spreaddeclined from 3.1 during 2003-04 to 3 percent during 2004-05. On the other hand,for SBI group, the interest spread ratiomoved up from 2.8 per cent during
Contd to page 34...
28 IBA BULLETINAUGUST 2005
0
100000
200000
300000
400000
500000
600000
700000
800000
200520042003
Investments(Rs. in crore)
SBISBIAssociates
NationalisedBank
Statement I : Public Sector Banks : Deposits/Investments/AdvancesAs on March 31 (Rs. crore)
Deposits Investments Advances
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005
I. NATIONALISED BANKS1. Allahabad Bank 25463 31477 40762 12372 15555 18988 12544 15342 211502. Andhra Bank 21062 22941 27550 10518 10317 10646 11513 12885 175163. Bank of Baroda 66441 72967 81333 30179 38019 37074 35348 35601 434004. Bank of India 64098 71003 78821 24435 27163 28203 42633 45856 560135. Bank of Maharashtra 22176 26446 28844 11802 13943 14479 9508 11732 130616. Canara Bank 72095 86345 96908 30458 35793 38053 40472 47639 604217. Central Bank of India 51165 55909 60751 26045 31405 30834 23159 22804 272778. Corporation Bank 21725 23191 27233 10670 10685 10261 12029 13890 185469. Dena Bank 16491 18349 20096 8500 9736 9696 8436 9412 11308
10. Indian Bank 27016 30444 34808 14839 16696 17920 12275 14126 1838011. Indian Overseas Bank 36699 41483 44241 18603 20172 19015 17447 20295 2520512. Oriental Bank of Commerce 29809 35674 47850 14781 16794 18342 15677 19681 2529913. Punjab & Sind Bank 13224 13642 N.A 6237 6777 N.A 5892 6030 N.A14. Punjab National Bank 75813 87916 103166 34030 42125 50672 40228 47225 6041215. Syndicate Bank 30661 42585 46294 13823 17917 20370 16305 20647 2672916. UCO Bank 31343 39244 49470 14138 17611 19064 15923 20626 2765617. Union Bank of India 44749 50559 61830 19371 22442 22792 25515 29426 4010518. United Bank of India 21031 22758 25348 12639 13916 14403 7352 7963 1138919. Vijaya Bank 17020 21015 25617 8862 10837 12068 7884 11045 14335
TOTAL OF 19 NATIONALISEDBANKS [I] 688081 793947 900923 322302 377904 392880 360140 412224 518202
II. State Bank of India (SBI) 296123 318619 367047 172348 185676 197097 137758 157934 202374III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 13234 15642 19038 7682 8430 8362 6773 8597 120092. State Bank of Hyderabad 20599 24258 28929 12519 15017 14559 9663 11814 155993. State Bank of Indore 9217 10419 13807 5137 5429 5898 5183 6406 90404. State Bank of Mysore 9013 11084 13585 4761 5487 5796 5261 6307 87815. State Bank of Patiala 17870 22473 26495 8122 11110 12312 10746 13086 153596. State Bank of Saurashtra 9054 10675 12613 4730 5846 6086 4649 5240 67147. State Bank of Travancore 15926 19721 24133 8039 10778 10592 9171 11132 14848
TOTAL OF 7 ASSOCIATES [III] 94913 114272 138600 50989 62097 63605 51445 62582 82350
TOTAL OF STATE BANKGROUP [II+III] 391036 432891 505647 223337 247774 260702 189204 220516 284724
IV. OTHER PUBLIC SECTOR BANKS1. IDBI Ltd. 15102 25055 45414
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV] 1079117 1226838 1421672 545639 625678 678637 549344 632740 848340
Source: Balancesheets of BanksN.A: Not Available
0
300000
600000
900000
1200000
1500000
200520042003
Deposits(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
200520042003
Advances(Rs. in crore)
SBISBIAssociates
NationalisedBank
29IBA BULLETINAUGUST 2005
0
5000
10000
15000
20000
25000
200520042003
Net NPA(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
10000
20000
30000
40000
50000
60000
200520042003
Gross NPA(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
500000
1000000
1500000
2000000
200520042003
Total Assets(Rs. in crore)
SBISBIAssociates
NationalisedBank
Statement II : Public Sector Banks : Total Assets, Gross and Net Non-Performing AssetsAs on March 31 (Rs. crore)
Total Assets Gross NPA Net NPA
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005
I. NATIONALISED BANKS1. Allahabad Bank 28051 34704 45144 1842 1418 1284 887 363 2712. Andhra Bank 24678 27009 32728 581 615 441 206 120 493. Bank of Baroda 76425 85109 94664 4168 3980 3322 1700 1761 12064. Bank of India 76627 84860 94978 3804 3734 4491 2286 2062 15545. Bank of Maharashtra 24905 32213 32884 958 954 962 459 288 2816. Canara Bank 82055 99539 110305 2475 3127 1432 1454 1378 11297. Central Bank of India 57105 63345 68595 3244 3092 2621 1563 1271 8148. Corporation Bank 26272 29154 33923 657 722 647 198 250 2079. Dena Bank 20162 22160 24028 1617 1484 1148 997 884 591
10. Indian Bank 35375 39154 43860 1630 1192 748 755 383 24711. Indian Overseas Bank 41155 47322 50815 1896 1576 1388 912 578 31912. Oriental Bank of Commerce 33999 41007 54069 1146 1211 2492 225 – 32713. Punjab & Sind Bank 14491 15011 N.A 1247 1204 N.A 639 577 N.A14. Punjab National Bank 86222 102332 126241 4980 4670 3741 1527 449 11915. Syndicate Bank 34435 47223 52109 1420 1590 1433 700 532 42616. UCO Bank 34914 43798 54589 1366 1479 1399 697 753 81117. Union Bank of India 51060 58317 72413 2388 2347 2058 1253 845 106018. United Bank of India 24269 25843 29097 959 764 726 406 299 27719. Vijaya Bank 19072 24071 29335 506 390 431 206 100 85
TOTAL OF 19 NATIONALISEDBANKS [I] 791272 922171 1049777 36883 35549 30764 17072 12893 9773
II. State Bank of India (SBI) 375877 407815 459882 13506 12667 12456 6183 5442 5349III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 18038 20256 23401 580 484 400 282 107 1942. State Bank of Hyderabad 26132 30646 34922 740 691 553 315 77 953. State Bank of Indore 11364 13044 16898 295 266 303 138 – 914. State Bank of Mysore 11336 13758 16552 562 515 415 273 186 815. State Bank of Patiala 21289 26897 31502 531 503 653 161 – 1896. State Bank of Saurashtra 11453 12837 15039 354 200 184 164 – 947. State Bank of Travancore 19033 24003 28874 635 662 652 280 154 269
TOTAL OF 7 ASSOCIATES [III] 118645 141442 167188 3698 3321 3160 1613 525 1013
TOTAL OF STATE BANKGROUP [II+III] 494521 549257 627070 17204 15988 15616 7796 5967 6362
IV. OTHER PUBLIC SECTOR BANKS
1. IDBI Ltd. 81360 1216 848
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV] 1285793 1471428 1758207 54087 51537 47596 24868 18860 16983
30 IBA BULLETINAUGUST 2005
0
30000
60000
90000
120000
150000
200520042003
Total Income(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
5000
10000
15000
20000
25000
30000
200520042003
Other Income(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
20000
40000
60000
80000
100000
120000
200520042003
Interest Income(Rs. in crore)
SBISBIAssociates
NationalisedBank
Statement III : Public Sector Banks : IncomeAs on March 31 (Rs. crores)
Interest Income Other Income Total Income
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005
I. NATIONALISED BANKS1. Allahabad Bank 2570 2669 3186 524 750 640 3095 3418 38262. Andhra Bank 2195 2227 2273 604 678 753 2799 2905 30263. Bank of Baroda 6098 6147 6431 1262 1719 1305 7359 7866 77364. Bank of India 5928 5796 6031 1642 1792 1156 7571 7588 71875. Bank of Maharashtra 2082 2203 2368 360 465 385 2442 2669 27536. Canara Bank 6692 7007 7572 1478 2073 1544 8170 9080 91167. Central Bank of India 5073 5064 5205 554 964 920 5627 6028 61258. Corporation Bank 2188 2276 2250 532 517 565 2634 2793 28159. Dena Bank 1772 1735 1725 437 617 311 2209 2353 2036
10. Indian Bank 2532 2667 2871 525 747 569 3057 3414 344011. Indian Overseas Bank 3486 3754 3951 520 741 640 4006 4495 459112. Oriental Bank of Commerce 3304 3301 3572 531 722 505 3836 4022 407713. Punjab & Sind Bank 1284 1279 307 256 1591 153414. Punjab National Bank 7485 7780 8460 1250 1867 1676 8735 9647 1013615. Syndicate Bank 2875 3085 3758 495 776 565 3370 3861 432316. UCO Bank 2793 3096 3547 609 625 516 3402 3722 406317. Union Bank of India 4306 4516 4970 825 831 766 5131 5348 573618. United Bank of India 2119 2073 2133 428 505 478 2548 2578 261119. Vijaya Bank 1671 1940 2094 346 526 354 2017 2466 2448
TOTAL OF 19 NATIONALISEDBANKS [I] 66454 68615 72397 13230 17172 13648 79598 85787 86045
II. State Bank of India (SBI) 31087 30460 32428 5740 7612 7119 36827 38073 39547III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 1438 1574 1741 340 492 483 1778 2065 22242. State Bank of Hyderabad 2067 2213 2325 462 707 421 2529 2920 27463. State Bank of Indore 986 1046 1110 302 361 178 1288 1407 12884. State Bank of Mysore 1037 1057 1168 294 340 386 1331 1397 15545. State Bank of Patiala 1759 1888 2133 350 630 355 2109 2519 24886. State Bank of Saurashtra 904 978 1132 215 306 114 1119 1284 12467. State Bank of Travancore 1584 1740 2008 300 470 408 1885 2210 2416
TOTAL OF 7 ASSOCIATES [III] 9777 10496 11617 2262 3306 2345 12039 13802 13962
TOTAL OF STATE BANKGROUP [II+III] 40864 40956 44045 8003 10919 9464 48867 51875 53509
IV. OTHER PUBLIC SECTOR BANKS
IDBI Ltd. 2656 627 3283
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV] 107318 109572 119098 21232 28091 23739 128464 137663 142837
31IBA BULLETINAUGUST 2005
0
20000
40000
60000
80000
100000
120000
200520042003
Total Expenditure*(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
5000
10000
15000
20000
25000
30000
35000
40000
200520042003
Operating Expenses(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
10000
20000
30000
40000
50000
60000
70000
80000
200520042003
Interest Expenses(Rs. in crore)
SBISBIAssociates
NationalisedBank
Statement IV : Public Sector Banks : ExpenditureAs on March 31 (Rs. crores)
Interest Expenses Operating Expenses Total Expenditure*
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005
I. NATIONALISED BANKS1. Allahabad Bank 1661 1583 1822 918 959 931 2579 2542 27532. Andhra Bank 1442 1317 1204 602 658 829 2044 1975 20333. Bank of Baroda 3994 3575 3452 1648 1805 1982 5643 5381 54344. Bank of India 3892 3594 3794 1649 1752 1932 5541 5346 57265. Bank of Maharashtra 1405 1432 1486 516 560 720 1922 1992 22066. Canara Bank 4425 4325 4421 1748 1897 2109 6172 6221 65307. Central Bank of India 3176 2942 2830 1527 1558 1686 4703 4499 45168. Corporation Bank 1310 1237 1120 471 574 637 1782 1811 17579. Dena Bank 1204 1143 1039 511 499 550 1715 1642 1589
10. Indian Bank 1712 1550 1567 755 1062 914 2467 2612 248111. Indian Overseas Bank 2264 2155 2096 947 1015 1158 3212 3170 325412. Oriental Bank of Commerce 2090 1845 2048 583 644 796 2673 2489 284413. Punjab & Sind Bank 898 785 N.A 413 600 N.A 1310 1385 N.A14. Punjab National Bank 4361 4155 4453 2057 2371 2975 6418 6526 742815. Syndicate Bank 1665 1656 2064 1086 1151 1264 2751 2807 332816. UCO Bank 1911 1902 2140 867 871 1103 2778 2773 324317. Union Bank of India 2809 2780 2905 1018 1085 1257 3827 3865 416218. United Bank of India 1400 1292 1218 592 673 704 1992 1965 192219. Vijaya Bank 1027 1102 1110 557 498 549 1584 1600 1659
TOTAL OF 19 NATIONALISEDBANKS [I] 42646 40369 40769 18466 20231 22096 61112 60601 62865
II. State Bank of India (SBI) 21109 19274 18483 7942 9245 10074 29052 28519 28557III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 887 857 872 450 527 622 1337 1384 14942. State Bank of Hyderabad 1320 1372 1363 451 535 671 1771 1906 20343. State Bank of Indore 619 593 607 248 282 328 867 875 9354. State Bank of Mysore 651 603 623 328 370 479 978 973 11025. State Bank of Patiala 975 1066 1157 395 449 479 1370 1515 16366. State Bank of Saurashtra 585 574 624 248 272 254 833 846 8787. State Bank of Travancore 1062 1057 1112 368 452 503 1430 1509 1615
TOTAL OF 7 ASSOCIATES [III] 6097 6121 6358 2488 2886 3336 8586 9007 9694
TOTAL OF STATE BANKGROUP [II+III] 27207 25395 24841 10431 12131 13410 37638 37526 38251
IV. OTHER PUBLIC SECTOR BANKS
1. IDBI Ltd. 2468 454 2922
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV] 69853 65765 68078 28897 32363 35960 98749 98127 104038
* Excluding Provisions and Contingencies
32 IBA BULLETINAUGUST 2005
0
5000
10000
15000
20000
200520042003
Net Profit(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
5000
10000
15000
20000
25000
200520042003
Provisions & Contingencies(Rs. in crore)
SBISBIAssociates
NationalisedBank
0
5000
10000
15000
20000
25000
30000
35000
40000
200520042003
Operating Profit(Rs. in crore)
SBISBIAssociates
NationalisedBank
Statement V : Public Sector Banks : ProfitAs on March 31 (Rs. crores)
Operating Profit Provisions and Contingencies Net Profit
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005
I. NATIONALISED BANKS1. Allahabad Bank 516 876 1073 350 413 530 166 463 5422. Andhra Bank 755 930 993 352 467 473 403 464 5203. Bank of Baroda 1717 2485 2302 944 1518 1625 773 967 6774. Bank of India 2030 2242 1461 1179 1234 1120 851 1008 3405. Bank of Maharashtra 521 676 547 299 372 369 222 305 1786. Canara Bank 1997 2859 2586 978 1521 1476 1019 1338 11107. Central Bank of India 924 1529 1609 618 911 1252 306 618 3578. Corporation Bank 853 907 1057 437 403 655 416 504 4029. Dena Bank 494 711 447 380 480 386 114 231 61
10. Indian Bank 590 802 959 401 397 550 189 406 40911. Indian Overseas Bank 794 1325 1337 378 812 685 416 513 65212. Oriental Bank of Commerce 1163 1533 1233 706 847 472 457 686 76113. Punjab & Sind Bank 281 150 N.A 276 141 N.A 4 9 N.A14. Punjab National Bank 2317 3121 2708 1475 2012 1297 842 1109 141115. Syndicate Bank 619 1054 994 275 620 591 344 434 40316. UCO Bank 624 948 819 417 513 473 207 435 34617. Union Bank of India 1304 1483 1574 751 771 854 553 712 72018. United Bank of India 556 613 689 251 298 389 305 315 30019. Vijaya Bank 432 866 789 236 454 408 197 411 381
TOTAL OF 19 NATIONALISEDBANKS [I] 18486 25111 23180 10702 14184 13605 7784 10928 9570
II. State Bank of India (SBI) 7775 9553 10990 4670 5872 6685 3105 3681 4305III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 441 681 730 238 380 524 203 302 2062. State Bank of Hyderabad 758 1014 713 457 633 462 301 381 2513. State Bank of Indore 421 532 352 221 306 219 200 226 1334. State Bank of Mysore 353 425 452 237 249 245 116 176 2075. State Bank of Patiala 740 1004 852 418 573 565 322 430 2876. State Bank of Saurashtra 287 438 368 196 275 327 93 177 417. State Bank of Travancore 455 701 802 284 456 555 171 245 247
TOTAL OF 7 ASSOCIATES [III] 3454 4796 4268 2047 2872 2897 1407 1937 1371
TOTAL OF STATE BANKGROUP [II+III] 11229 14349 15258 6718 8745 9582 4512 5618 5676
IV. OTHER PUBLIC SECTOR BANKS
1. IDBI Ltd. 361 54 307
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV] 29715 39536 38799 17420 22928 23241 12295 16546 15558
33IBA BULLETINAUGUST 2005
Statement VI : Public Sector Banks : RatiosAs on March 31 (in per cent)
Credit Deposit Ratio Investment Deposit Ratio Spread as % of Assets
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005I. NATIONALISED BANKS
1. Allahabad Bank 49.26 48.74 51.89 48.59 49.42 46.58 3.24 3.13 3.022. Andhra Bank 54.66 56.17 63.58 49.94 44.97 38.64 3.05 3.37 3.273. Bank of Baroda 53.26 48.79 53.36 45.47 52.10 45.58 2.75 3.02 3.154. Bank of India 66.15 64.58 71.06 37.91 38.26 35.78 2.66 2.59 2.365. Bank of Maharashtra 42.88 44.36 45.28 53.22 52.72 50.20 2.71 2.40 2.686. Canara Bank 56.14 55.17 62.35 42.25 41.45 39.27 2.72 2.69 2.867. Central Bank of India 45.26 40.79 44.90 50.90 56.17 50.75 3.32 3.35 3.468. Corporation Bank 55.37 59.89 68.10 49.11 46.07 37.68 3.02 3.56 3.339. Dena Bank 51.15 51.29 56.27 51.54 53.06 48.25 2.82 2.67 2.86
10. Indian Bank 45.44 46.40 52.80 54.93 54.84 51.48 2.32 2.85 2.9711. Indian Overseas Bank 47.54 48.92 56.97 50.69 48.63 42.98 2.97 3.38 3.6512. Oriental Bank of Commerce 52.59 55.17 52.87 49.58 47.08 38.33 3.54 3.55 2.8213. Punjab & Sind Bank 44.56 44.20 N.A 47.17 49.67 N.A 2.67 3.29 N.A14. Punjab National Bank 53.06 53.72 58.56 44.89 47.92 49.12 3.62 3.54 3.1715. Syndicate Bank 53.18 48.48 57.74 45.08 42.07 44.00 3.51 3.03 3.2516. UCO Bank 50.80 52.56 44.93 45.11 44.88 56.82 2.53 2.73 2.5817. Union Bank of India 57.02 58.20 64.86 43.29 44.39 36.86 2.93 2.98 2.8518. United Bank of India 34.96 34.99 44.93 60.10 61.15 56.82 2.97 3.02 3.1419. Vijaya Bank 46.37 52.56 55.96 52.07 51.57 47.11 3.37 3.48 3.35
TOTAL OF 19 NATIONALISEDBANKS [I] 52.32 51.92 57.52 46.82 47.60 43.61 2.99 3.06 3.01
II. State Bank of India (SBI) 46.52 49.57 55.14 58.20 58.28 53.70 2.65 2.74 3.03III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 51.18 54.96 63.08 58.05 53.89 43.92 3.06 3.54 3.712. State Bank of Hyderabad 46.91 48.70 53.92 60.77 61.91 50.33 2.86 2.75 2.753. State Bank of Indore 56.23 61.49 65.47 55.74 52.11 42.72 3.23 3.48 2.984. State Bank of Mysore 58.37 56.90 64.64 52.82 49.50 42.66 3.41 3.30 3.295. State Bank of Patiala 60.14 58.23 57.97 45.45 49.44 46.47 3.71 3.06 3.106. State Bank of Saurashtra 51.36 49.09 53.23 52.59 54.77 48.25 2.94 3.15 3.387. State Bank of Travancore 57.58 56.45 61.53 50.47 54.65 43.89 2.75 2.85 3.10
TOTAL OF 7 ASSOCIATES [III] 54.20 54.77 59.42 53.76 54.34 45.89 3.12 3.09 3.15
TOTAL OF STATE BANKGROUP. [II+III] 48.39 50.94 56.31 57.12 57.24 51.56 2.77 2.83 3.06
IV. OTHER PUBLIC SECTOR BANKS
1. IDBI Ltd 300.72 165.91 0.23
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV] 50.89 51.57 59.67 50.55 51.00 47.74 2.91 2.98 2.90
Statement VII : Public Sector Banks : RatiosAs on March 31 (In per cent)
Interest Income Opr. Exp. as % to Total Expenses Net Profit as % to Assets Capital Adequacy
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005I. NATIONALISED BANKS
1. Allahabad Bank 35.61 37.73 33.82 0.59 1.34 1.20 11.15 12.52 12.532. Andhra Bank 29.44 33.34 40.78 1.63 1.72 1.59 13.62 13.71 12.113. Bank of Baroda 29.21 33.55 36.47 1.01 1.14 0.72 12.65 13.91 12.614. Bank of India 29.75 32.76 33.74 1.11 1.19 0.36 12.02 13.01 11.525. Bank of Maharashtra 26.86 28.13 32.64 0.89 0.95 0.54 12.05 11.88 12.686. Canara Bank 28.31 30.49 32.30 1.24 1.34 1.01 12.50 12.66 12.787. Central Bank of India 32.47 34.62 37.33 0.54 0.98 0.52 10.51 12.43 12.158. Corporation Bank 26.46 31.68 36.25 1.58 1.73 1.19 18.50 20.11 16.239. Dena Bank 29.80 30.39 34.61 0.57 1.04 0.25 6.02 9.48 11.91
10. Indian Bank 30.61 40.66 36.84 0.53 1.04 0.93 10.85 12.82 14.1411. Indian Overseas Bank 29.49 32.02 35.59 1.01 1.08 1.28 11.30 12.49 14.2112. Oriental Bank of Commerce 21.80 25.89 27.99 1.34 1.67 1.41 14.04 14.47 9.2113. Punjab & Sind Bank 31.48 43.30 N.A 0.03 0.06 N.A 10.43 11.06 N.A14. Punjab National Bank 32.05 36.33 40.05 0.98 1.08 1.12 12.02 13.10 14.7815. Syndicate Bank 39.47 41.02 37.98 1.00 0.92 0.77 11.03 11.49 10.7016. UCO Bank 31.22 31.42 34.01 0.59 0.99 0.63 10.04 11.88 11.2617. Union Bank of India 26.61 28.06 30.20 1.08 1.22 0.99 12.41 12.32 12.0918. United Bank of India 29.72 34.23 36.63 1.26 1.22 1.03 15.17 17.04 18.1619. Vijaya Bank 35.16 31.11 33.09 1.03 1.71 1.30 12.66 14.11 12.92
TOTAL OF 19 NATIONALISEDBANKS [I] 30.22 33.38 35.15 0.98 1.18 0.91
II. State Bank of India (SBI) 46.52 49.57 35.28 0.83 0.90 0.94 13.50 13.53 12.45III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 33.68 54.96 41.63 1.13 1.49 0.88 13.18 12.93 12.602. State Bank of Hyderabad 25.49 28.04 32.99 1.15 1.24 0.72 14.91 14.29 11.743. State Bank of Indore 28.61 32.23 35.08 1.76 1.73 0.79 13.09 12.39 11.614. State Bank of Mysore 33.50 38.03 43.47 1.02 1.28 1.25 11.62 11.53 12.085. State Bank of Patiala 28.84 29.63 29.28 1.51 1.60 0.91 13.57 13.56 14.216. State Bank of Saurashtra 29.76 32.10 28.93 0.81 1.38 0.27 13.68 14.53 11.457. State Bank of Travancore 25.74 29.98 31.15 0.90 1.02 0.86 11.30 11.36 11.05
TOTAL OF 7 ASSOCIATES [III] 28.98 32.04 34.41 1.19 1.37 0.82TOTAL OF STATE BANK GROUP [II+III] 27.71 32.33 35.06 0.91 1.02 0.91
IV. OTHER PUBLIC SECTOR BANKS1. IDBI Ltd. 15.54 0.78 15.51
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV] 29.26 32.98 34.56 0.96 1.12 0.88
34 IBA BULLETINAUGUST 2005
Statement VIII : Public Sector Banks : RatiosAs on March 31 (In Crores) (In lacs)
Interest Income Net NPA as % to Net Advances Business Per Employee Profit per Employee
Sr. No BANKS 2003 2004 2005 2003 2004 2005 2003 2004 2005I NATIONALISED BANKS
1 Allahabad Bank 7.08 2.37 1.28 1.83 2.15 2.82 0.87 2.46 2.862 Andhra Bank 1.79 0.93 0.28 2.27 2.77 3.46 3.10 3.54 3.973 Bank of Baroda 3.72 2.99 1.45 2.38 2.53 3.10 1.92 2.43 1.714 Bank of India 5.37 4.50 2.77 2.43 2.67 3.20 1.97 2.35 0.805 Bank of Maharashtra 4.82 2.46 2.15 2.22 2.69 2.95 1.58 2.16 1.256 Canara Bank 3.59 2.89 1.88 2.50 2.98 3.51 2.26 2.97 2.487 Central Bank of India 7.02 5.57 2.98 1.68 1.82 2.07 0.77 1.58 0.938 Corporation Bank 1.65 1.80 1.12 3.29 3.66 4.38 4.06 4.98 3.959 Dena Bank 11.83 9.40 5.23 2.42 2.74 3.13 1.08 2.23 0.60
10 Indian Bank 6.15 2.71 1.35 1.74 1.89 2.46 0.85 1.85 1.8711 Indian Overseas Bank 5.23 2.85 1.27 2.04 2.55 2.69 1.70 2.12 2.6612 Oriental Bank of Commerce 1.40 Nil 1.29 3.43 4.16 5.15 3.40 5.10 5.2013 Punjab & Sind Bank 10.89 9.62 N.A 1.96 2.05 N.A 0.05 0.09 N.A14 Punjab National Bank 3.86 0.98 0.20 1.96 2.28 2.77 1.43 1.88 2.4215 Syndicate Bank 4.29 2.58 1.59 1.80 2.40 2.80 1.30 1.62 1.5316 UCO Bank 4.36 3.65 2.93 1.97 2.49 3.21 0.85 1.79 1.4317 Union Bank of India 4.91 2.87 2.64 2.50 2.86 3.47 2.15 2.78 2.8118 United Bank of India 5.52 3.75 2.43 1.62 1.69 2.08 1.77 1.76 1.7219 Vijaya Bank 2.61 0.91 0.59 1.94 2.49 3.13 1.76 3.73 3.48
TOTAL OF 19 NATIONALISEDBANKS [I]
II. State Bank of India (SBI) 4.5 3.48 2.65 1.91 2.11 2.43 1.48 1.77 2.07III. ASSOCIATES OF SBI
1. State Bank of Bikaner & Jaipur 4.13 1.24 1.61 1.46 1.70 2.20 1.63 2.44 1.692. State Bank of Hyderabad 3.25 0.65 0.61 2.26 2.66 3.40 2.25 2.87 1.913. State Bank of Indore 2.66 Nil 0.01 2.21 2.31 2.94 3.06 3.45 2.074. State Bank of Mysore 5.19 2.96 0.92 1.46 1.63 2.04 1.19 1.82 2.165. State Bank of Patiala 1.49 Nil 1.23 2.46 3.05 3.61 2.76 3.69 2.486. State Bank of Saurashtra 3.53 Nil 1.40 1.68 1.93 2.50 1.25 2.40 0.567. State Bank of Travancore 3.06 1.39 1.81 2.18 2.72 3.46 1.51 2.16 2.21
TOTAL OF 7 ASSOCIATES [III]
TOTAL OF STATE BANKGROUP [II+III]
IV. OTHER PUBLIC SECTOR BANKS
1. IDBI Ltd. 1.74 13.50 6.85
TOTAL OF PUBLIC SECTORBANKS [I+II+III+IV]
N.A. : Not Available
2003-04 to 3.1 per cent during 2004-05.16 banks have the interest spread ratio ofmore than 3 per cent during 2004-05.
Non-Performing Assets – As mentionedbefore, both the gross and net non-performing assets showed declined inabsolute terms and as percentage of netadvances during 2004-05. For majority ofthe banks, this ratio is less than 3 per cent.Dena Bank has the highest ratio with 5.2per cent during 2004-05.
Operating Expenses - Ratio of operatingexpenses to total expenses increased to 34.6per cent during 2004-05 from 33.0 per centof the previous financial year. 4 banks have aratio of more than 40 per cent during 2004-05. Majority of the banks recorded a higherratio than the previous year.
Business per Employee – Business peremployee of most of the banks werehigher than that of the previous year.
Highest per employee business wasrecorded by IDBI Ltd. with Rs. 13.5 crores.Lowest business ratio was shown byCentral Bank of India with 2.1 crores during2004-05. Majority of the banks recorded abusiness ratio of Rs. 3.0 crores to Rs. 4.0crores during 2004-05.
Profit per Employee – Majority of thebanks recorded a lower profit peremployee ratio than the previous year.Highest ratio was recorded by the IDBI Ltd.with Rs. 6.85 lacs during 2004-05. This ratiofor majority of the banks ranged fromRs.1.5 lacs to Rs. 3.0 lacs during 2004-05.
Conclusion
Compared to 2003-04, the performanceof the Public Sector Banks was notimpressive during 2004-05. Resourcemobilisation and investments were lowerduring 2004-05 as compared to 2003-04.Disbursement of credit was impressive
during this year. Total income and totalexpenditure of these banks were higherthan the financial year 2003-04. Sincegrowth in expenditure were higher thanthe growth in income, the banks recordeddeceleration in operating and net profitduring 2004-05. A significant achievementfor the banks was reduction in the grossand net non-performing assets of thebanks in absolute term and also aspercentage of net advances during 2004-05. Banks were able to maintain spread atthe same level as that of the previous year.Slight deceleration in the Capital AdequacyRatio and Return on Assets were alsoobserved during 2004-05. Productivity ratioshowed improvement than the previousyear. However, profitability ratio was lowerthan the previous year. ❑
Prepared by Mrs Jayshree Menon, Managerwith data support from
Mr. Ramesh Kumar Nair, Officer,DRS Dept. IBA.
Contd from Page 27
35IBA BULLETINAUGUST 2005
”
”
SHGs has come to be accepted as animportant tool to ensure standards in SHGs.In the enthusiasm to ensure monitoring ofSHGs every stakeholder had their owninnovation in designing a new tool forgrading of SHGs. This has resulted in floodingof market with rating tools with slightvariation here and there. Multiplicity of ratingtools though is a good indication for theconcerns of many players is on quality aspects.Administration of these tools remainedlargely one of monitoring the SHGs ratherthan ensuring how these tools becomeinternalized at SHG level for their own selfmonitoring. It is interesting to notice that therehas been good number of participatory toolsdeveloped by stakeholders for the self-assessment by SHGs themselves. Over a periodof time the parameters set within the ratingtools become a benchmark for the SHGs toreach such milestone in their quest to reachhigher grades. It is also important that thisassessment shall not be a one off approachbeing administered at the time of lending bybanks but rather a periodic self assessmentby SHGs and rating by other stakeholdersperpetually, giving scope for raising thebenchmarks over a period of time. In a studyconducted by Andhra Pradesh MahilaAbhvriddhi Society (APMAS) in 400 randomlyselected SHGs across 40 randomly selectedmandals in 8 selected districts in AndhraPradesh, only 22% of the groups werereported to be appraised using rating toolbefore bank linkage by banks and DRDAs.
Market distortions
The largesse perpetrated by Governmentprograms has been worrying the microfinance specialists and apart fromdisintegrating the groups, setting wrongprecedents, inequity in subsidy distribution,pulling down the quality of groups ingeneral, there has been perceived marketdistortions caused by the subsidy orientedGovernment programs. The sector has beencrying fowl over such reckless sprinkling ofunhealthy practices; as the whole SHGmovement is built on structured, processintensive and a time bound program toensure group formation, grading of groups,credit linkage, ensuring definitive creditdemand. The quick spread cultureperpetrated by such mass scale programshas played spoilsport with the establishedconventions and best practices. Distortionsare galore due to easy-go-approachfollowed by many stake holders andpromoters leaving the hilly, tribal, dry tractswithout giving the benefit to such remote
areas even the smell of the SHGs have causedlopsided distribution of SHGs and manypotential pockets in north east and east aredeprived of sizeable chunk of SHGs. Asagainst 16.18 million SHGs credit linked, only34238 SHGs (a mere 2.1%) represent northeast, against the 8 north eastern states, Assamalone accounts for 31234 SHGs. It is also thefact that in many states over 80% of the SHGsare anchored by large Govt. initiatives.
Federations
The urge for aggregating the SHGs at ahigher level without appraising the value-add and the cost implications has been asource of worry. It is also corroborated bymany studies that as more and more theSHGs are up streamed at higher level withoutgetting convinced on the role for suchintermediaries, more and more the clientsare distanced from the intermediarystructures including the banks. There is alsoa tension between SHGs and federations asperceived by the clients. It is not out of placeto mention that in many places the qualityof SHGs have gone down after they arefederated. In the quest of ensuring thesustainability of federations, which was thestrong reason for why federations havecome into being, the challenge remains asto how to overcome the quality issues andhow the federations can directly contributefor this. While there is a big debate on theneed for federations, it is to be ensuredthat the zeal for making federationsshall not end up in belittling therole of SHGs and cut into thevery quality aspects of SHGs.
Comparative analysis ofgood practices withbest practices
The variations inpractices at SHGlevel have beens p u r r i n ginnovations interms of products,systems andm e t h o d o l o g i e sand encouragingnew standards inSHG promotion andp r a c t i c e s ;nevertheless it hasbrought lot ofincongruity in theestablished practices. Acomparison of such
Shri Devaprakash is an Agro Economist holding
masters degree from TamilNadu Agricultural
University, Coimbatore. He is a Technical Support
Specialist working for CASHE (Credit And Savings for
Household Enterprise) Project of CARE India. CASHE
happens to be the largest national microfinance
initiative, outside the Govt. programs and NABARD
linkage program which attempts to address
inadequacies and gaps in the micro finance sector
in the country. At present he is anchoring the sector
building initiatives on microfinance at the national
level. Earlier Devaprakash worked for Indian Bank in
various capacities heading the Gramodaya
Kendras(Rural Development Centers) of the bank in
various places contributing towards poverty
lending, rural finance and micro finance mandate
of the bank.
The quest for promotingSHGs cannot becomemerely a number drivenagenda and the one andhalf decades ofexperimentation on SHGsshall gradually evolve intosetting new benchmarkson the quality andstandards of SHGs.
Contd. from page 25...
36 IBA BULLETINAUGUST 2005
practices with the recommended practicesleads us to revisit some of the establishedparameters and norms set in the
standardized rating or grading tools. Whilemuch has been said about the relevance ofthe rating tools, there is certainly a need to
standardize the grading tools across theboard and the process of such design itselfneeds to be revisited periodically.
COMPARATIVE ANALYSIS OF SOME EXISTING PRACTICES WITH THE RECOMMENDED PRACTICES IN SHG
Details Normal practice Recommended practice
Fund Management Groups savings and external loan funds are held Group savings and external loan funds areseparately. pooled. Accounting principles shall need to
take care of this.
Group Meetings SHGs take it as a rigor to meet frequently SHGs meet at appropriate intervals as andwhen needed appreciating the hightransaction cost for members for attending thegroup meeting.
Fee for services Not all services the members are accessing are Services are priced across the board thoughpriced; as some services are small and frequent some may appear to be small and intermittent.
This is to inculcate the habit of appreciating theneed for paying for services
Leveraging Process -Retailing or wholesaling Retailing from formal financial sector at SHG Retailing at SHG level and slowly moving on tolevel as a means of mainstreaming wholesaling with formal sector for bulk funding
for mother units ( cluster/ federation/ NGO/ MFI)
Subsidy dependence SHGs deriving more subsidy and more and more SHGs moving out of subsidy regimen andmoving on towards subsidy regime phasing out subsidy dependence
Growth in Savings Static savings as clients agree to pool in same Growth in rate of per capita savings over yearsamount of savings all through out will make the SHGs leverage more and more
funds from external sources
New financial services SHGs are comfortable only with credit and SHGs are open to mainstreaming new financialsavings and consider other services as not services like insurance, money transfer, pensionfalling within the mandate for which they etc., and need not directly deal with suchare established services and open to the idea of clients
accessing such services
Affiliation to federation SHGs remain, as stand-alone piece without any SHGs are moving to affiliating to cluster/ affiliation to SHG-upstream like clusters/ federations and SHGs shall feel that they willfederations and more often feel their role will have space for their operation in the largerbe limited in a federal set up. domain of federation framework
Inter group lending SHGs do not lend to other groups as a matter of SHGs proactively look at inter group lending aspolicy though more of idle funds are locked an option to park the idle funds if they areup within SHG, as the scope of lending within confident of managing such risksthe group is limited beyond certain extent
Risk Fund SHGs operating themselves risk fund and SHGs understanding the implications of big payat times embarrassed at huge pay outs at times outs, buying such services from professionalof emergencies without adequate reinsurance service providers rather than managing such back ups risks themselves
Rotation of leadership Rotation of leadership is seriously taken, with Rotation of leadership is adapted whereverthe result clients with poor leadership qualities feasible and not as a matter of routinecome to manage the SHGs very often on turn periodically and limited to persons ofbasis leadership quality
Sharing of dividend Resources are kept as reserves, as such and any Resources as earnings are shared periodicallyslicing up of reserves as dividends may erode which will be a sort of incentive to perk up thethe fund base interest of clients further
Sharing the funds available as loans Loan funds are shared equally as loans amongst Need assessment is the basis and loan funds aremembers at any point in time without taking the not divided equally amongst the members. Aindividual needs into consideration. More or demand based approach to decide the loanless a supply based approach to decide the quantumloan quantum
Type of loan account Mostly term loans are from the external finance A line of credit called cash credit limit which isinstitution with clear terms and many times a revolving account which will be renewedrepaid much in advance periodically
37IBA BULLETINAUGUST 2005
Details Normal practice Recommended practice
Loan hedging SHGs especially when they are mature tend SHGs shall not bother about productive nature (productive uses Vs consumption) to invest more in productive loans than of loans and narrow down their priorities to
consumption loans productive uses of credit alone; instead theyshall fairly assess and appreciate other non-productive uses of credit and prudently hedgethe risk by pricing more for consumption loansthan production loans to cut downostentatious consumption
Multiple membership within the family Sometimes, promoters find it easy to include Membership shall not devolve more than amembers from the same family for easy person from each family unless and otherwisemanagement of groups there are any specific reasons like widow/
deserted or physically challenged personsexisting in the same family as second/thirdeligible member
Marital status of members SHGs for the sake of membership may include It is better to include only married women inall women including spinsters SHGs in anticipation of migratory problems
once the women get married. This shall notcause any erosion of membership to a largeextent
Unisex or multi sex group Some SHGs especially activity based SHGs are The experience shows that unisex groups aremixed groups having the presence of both sexes fairing well than mixed groups where peer
dynamics are limited and there is less space forarticulation for women in mixed groups
Neighbourhood or Diversity Many promoters believe the peer pressure Neighbourhood alone shall not be the criterionworks more vigorously amongst neighbuorhood as this may result in inbreeding. Diversity inmembers terms of members’ profile will spur new thinking
and bring new values in SHGs. Ideally acombination of neighborhood and diversitywill help the SHG’s dynamics grow
Activity based groups Activity based groups are favored to push Activity based groups does not work in manymicro enterprises easily on the members cases as issues of economic activity takes the
foreground than the group dynamics itself.
Common economic activity Common economic activity is preferred in On many occasions common economic activitysome cases like SGSY groups due to project does not work and members prefer to mangecompulsions activity individually and may like to draw
linkages from common sources. Commoneconomic activity coming on volition shall besupported
Targeting Strategy and Tool Income based poverty line and reference to Move away to non-income based acceptedration cards/ revenue records are taken as tools like wealth ranking, housing index, meansbenchmarks test, geographic targeting etc
Investment policy of SHG Lending to SHG members is the normal practice Lending outside the group for the purpose ofand if resources are idle lending outside the earning interest on the pretext of investinggroup is encouraged the idle money is not a sound practice
Participation in political process Many SHGs separate politics from business and Politics is integral part of life and more anddo not allow clients to be part of the political more clients participating in the process willprocess on the pretext, participation in political help SHGs apart from leveraging externalprocess will play spoilt sport. linkages will ensure a say for clients in the
political system of the village
Participation in PRI SHGs get glued to their business and think SHGs need to associate itself in villageparticipation in PRI may not have any strategic development and PRIs are right forums tovalue for itself propagate much inclusive development
planning and SHGs shall need to spare time forsuch development centered activities
Encouraging visitors SHGs believe that visitors may borrow their own SHGs must follow transparent practicesconcepts and keep certain things within as tricks including encouraging visitors and if possibleof trade and do not encourage visitors visitors need to be charged for taking their
time off
38 IBA BULLETINAUGUST 2005
Details Normal practice Recommended practice
Subsidized interest rate or market rate SHGs feel that less and less is the rate of interest, SHGs shall need to work on the market rate andmore and more it can satisfy the members establish an acceptable rate of interest to strike
a balance between the formal and informalsector. Interest rates need to respond to themarkets and not to client’s interests
Common interest regimen for all clients SHGs practice common interest regimen for Realizing that within the groups some clientsall categories of clients like widows/ deserted persons/ physically
challenged need special treatments asrelatively limited opportunities available tothem, SHGs having differential interestregimen with clear policy on ground withoutscope for misinterpretation to include in-eligible clients the benefit of such preferentialtreatments
Common regimen for all purposes SHGs fix uniform interest rates for all purposes A forward looking interest regimen needs toregardless of the purpose for which the loans look at the purposes of such loans and tweak ithas been taken to the requirements
Loan Terms Uniform loan terms for all loans irrespective of Loan terms are decided based on the type ofwhether they are productive loans or loans, which shall take into account the streamconsumption loans and even within this of income flow into the purposes lent. Holdingthere is less scope for further variations. tight on the policy of uniform repayment
period for all loans may be regressive and matbreed loan delinquency
Encouraging voluntary savings Voluntary savings is not encouraged for fear of Voluntary savings will increase the fundsbringing in inequity amongst members available to SHGs for on-lending and mop up
such savings potential in the community asindividuals. If this is not harnessed fully suchsavings will anyway be leaking into otherestablished informal rural financial systems invillages
Nominal savings Collecting savings from non-members in the Nominal savings are prohibited by RBI Act andname of members to shore up the fund base of many times there is scope for misappropriationSHGs and false claims on such savings which can not
be monitored by SHGs effectively
Depositing in banks SHGs may tend to deposit idle funds with Depositing in banks leaves little return for SHGsbanks in the beginning and in the process and this is not to be encouraged as a matter ofcultivates this as a habit and some bank routine and SHGs need to invest internally onbranches may also insist for this loans to members which will give better
returns to both SHGs and members
Parallely taking loans from banks as Members are not allowed to take loans from Members depending on their needs mayindividuals banks individually once they are registered in approach banks for their individual needs and
SHGs, as this may bring inequity amongst SHGs shall be used to leverage funds formembers. Such loans are looked upon as threat individual enterprises. This is apart from whatto the very survival of SHGs SHGs collectively leverage from banks for all
members. SHGs shall actively encourage suchloan linkages for individual clients
Dependence on promoters SHGs looking for more and more technical SHGs looking at promoters only for strategicsupport from promoters and looking for issues and able to manage more and more ofpromoters’ role in all operational issues which operational issues which are quite routinewill cause inordinate delays in clients accessingessential services
Key research questions?
It is more important to know that why weneed to do this comparison rather thanmerely knowing the better practices. Suchanalysis will lead to know the process partof delivering the best practices. While a much
deeper analysis may need to go intoinvestigating the reasons for the hugevariation between established practices andhow it is broadcasted in the field, it isworthwhile to compare betweenGovernment promoted vis-à-vis NGO
managed groups, rapid growth of SHGsversus systematic growth, standardised toolsvs adhoc processes. How SHGs in South areranking compared to North, how MFIpromoted SHGs are scoring when comparedto bank linkage model, whether SHGs of
39IBA BULLETINAUGUST 2005
micro finance focus are faring better thanintegrated models of SHGs, whether hugerating difference is observed between bankpromoted SHGs and NGO nurtured SHGs. AreSHGs linked to federations doing better thanstand alone SHGs? Quality differencesbetween community formed groups andothers and how the remotely located SHGsare putting up as against closely located SHGs.Yet such comparisons are leading to largegaps between what is the accepted practiceand what is being observed as of now.
Way forward
The quest for promoting SHGs cannot
become merely a number driven agendaand the one and half decades ofexperimentation on SHGs shall graduallyevolve into setting new benchmarks on thequality and standards of SHGs. Analysis ofSHGs’ performance over years by many stakeholders (however stake holder centric theanalysis might be) have revealed dip inqualitative attributes like repayments, groupdynamics and robustness, business focus,interest of clients in participation in decisionmaking, attendance of group members ingroup meetings, zeal in taking leadershipresponsibilities and increase in delinquencyin savings, client drop outs, etc.
Issues of excessive dominance of dairy
activity even in SHGs, bunching of credit
linkages to the last quarter of the financial
year, credit camps being practiced in SHG
lending make them as good as any other
rural credit product which banks in India
has been experimenting with and certainly
to make a difference. SHGs need to over
come the ‘Quality blues’, the control of which
rests with the stakeholders themselves, given
the right orientation and attitude. Let’s set
things right before the celebration of
success wanes into a story of mourning. ❑
Contribution of ArticlesOur Editorial Committee has decided to bring out articles on different topics of interest to bankers. Some
of the areas receiving focused attention of bankers in the recent past are:
Fringe Benefit Tax - Its nuances and implications
Boosting of fee based income of Banks – ways and means
Role of Banks in Commodity Markets
Implications of CBS in Banks – utility, application and customer perspective
Financing Software Developments/Exports.
Accordingly, the IBA Bulletin will carry articles on current topics on different aspects both in English and
Hindi languages.
Your contribution on any topic should be around 2500 words. The write-up should be crisp and concise but
certainly not at the cost of clarity. The manuscript should be sent on a floppy (MS Word) along with a hard
copy or e-mailed to [email protected]; [email protected]; [email protected]. Please also submit a
statement declaring that the material has not been published elsewhere nor has been given to any other
publisher for publication. A passport size photograph of the author together with a small write-up about
the author may be sent alongwith the article. The Association pays honorarium to authors whose articles
are published.
Change, Competition, Leadership &Rethinking Future K.M. Gopinath
Globalisation brings
along with it the ‘Change’
in the form of local
competition to product
and services. In business
scenario, change takes
place in the form of new
technologies, changing
attitudes and consumer dynamics.
The evolving customer needs, also fosters
change from traditional methods of serving
the customer to use of technology
transcending all geographical barriers.
Change has also altered the manner of
competition. Change is now looked more as
an opportunity and not as a threat. To really
understand change, examination of the
fundamental would reveal why the need for
change has arisen. Firstly, there has been shift
from industrial economy to information
economy, national economy to global
economy, hierarchies to networking, either
or options to multiple options. Quite
naturally working in such changed
environment has brought along with it
different skill sets, radically different from
what had been practiced in the past.
Procedural competencies have given way to
customer assistances competencies, routine
repetitive work to non-routine abstract work,
isolated work to group interactive work. In
short, there is a cultural change in the form
of demand for skill required to operate in
an everchanging environment to earlier well-
defined stable environment. This signals a
new era of ‘Competition’ totally different
from the traditional one.
The changing role of the present day
customer, from isolated to connected, from
unaware to well-informed, determines the
future competition. Banks are competing
with one another to woo the customer
through variety of service and product
innovation by the use of technology. Strategy
and tactics adopted have to move from the
traditional bank centric value creation to
customer centric value creation. Innovated
products and services have to be marketed
and sold based on what value and
satisfaction it creates for the customer. Banks
can no longer assume that value resides
exclusively in the bank’s product and services
and thereby go about marketing and selling
products and services which bank feel are
good, without understanding and studying
whether there is any value creation in these
products and services for the customer who
is the final user. The success of failure of
products and services to a large extent
depends on this factor. For example, some
banks have launched credit cards on co-
branded basis with other service providers
(like Airlines etc.) aimed to provide more
value creation and satisfaction from the
customer‘s point of view. This implies that
future competition is based on value
creation and not merely on the introduction
of plain vanilla products which was good
enough few years ago. Market proactive
banks have started realising the importance
of Customer Relationship Management and
have already started pricing, based on
customer relationship. Hence in the future,
banks will have to focus on what they can
offer, juxtaposed with the desire and
satisfaction of the customer, for only this,
can result in value-creation and a win-win
situation for both.
This brings us to the importance of
‘Leadership’ in the new era. It is thought
that, to meet future competition, we need a
new organisational step up but what is
equally important is that traditional
leadership has to give way to 21st century
leadership. The new leader has to be more
forward looking, have a vision, should be
able to spot early emerging trends, seize new
opportunities, leverage on technology and
human resources to derive the best before
others get there. In other words, new leaders
should, inter-alia, have strategic direction. As
someone said “Strategy is cerebral but the intent
to put into practice is the absolute lever to
productivity of any business endeavour”.
Traditional leadership style to micromanage
every minute details leads to over-managing
the present, which leaves no time to create the
future. The mantra is to empower, delegate, defy
traditions, get bureaucratic shackles off the feet
which alone is certain to ensure success as this
would encourage decision making at all levels
which sadly is at discount at Public Sector Banks
due to the fear of accountability.
This leads us to the ultimate, i.e. ‘Rethinking
the Future’. As stated earlier, we have moved
from the industrial era to an information
age of networking. Therefore, we cannot
expect the future to be a continuation of
the past. Hence the planning for the future
will be quite different because the
fundamentals and assumptions of the past
will no longer hold good for the future. The
classic example is the introduction of Core
Banking Solutions which is in tune with
information age. This leads us to re-think
whether the present organizationl structure,
in existence over the years is capable to
handle the complexities of the information
age. Banks have traditionally structured the
organizational set up, functional-wise
whereas in the information age, there is a
need to reorganise it on major business lines.
The leaders of today cannot be just content
in just improving the business in terms of
greater market share. While this is important
to remain profitable, more important is to be
a true leader (or trend-setter). He should
have a vision, create new ideas and take the
organisation forward in that direction. In
short, it calls for inventing the future. ❑
Shri Gopinath is General Manager (IIS), Indian Bank, Head office, Chennai.
40 IBA BULLETINAUGUST 2005
Counter – The Best Marketing JointS. Pradeep Naidu
The very old tradition ofCounters in the banksjust like the Great Wallsor Cages have becomeobsolete and thepresent day hitechenvironment changedthe pattern of counters.
Now-a-days the counters are just like thetea tables between the bankers andcustomers.
Take the example of any organization,company or business concern, counter actsas a mediator between the customer andthe seller. We can say that the counter is thegateway of any business wherein entirebusiness starts and grows through thecounters only. Counter is just like a battlefield but where it is not the battle forfreedom or kingdom but the battle forrelation with the customers to improve thebusiness.
Counter staff should be like warriors whoalways be alert to capture the financial stressof the customers and give the solutions toget them absolutely satisfied. Whatever theplans, policies, budgets, targets, products etc.,are introduced or adopted, it is the counterthat only push them through the customerswho feel tension free from his burden ofmoney management.
In a broader extent, we can say that counteris just like a market place where bankersgive the service, explain the features ofvarious products and customers transacttheir banking business. It is the duty of everybanker to make the customer a goodmarketing zeal for the bank. Take a smallexample how the customer himself becomesthe marketing man sometimes. If the qualityof food, service and prices are appreciableand reasonable in a small hotel, certainly avisitor who tasted these will tell his friendsand known persons about them. Withouthis knowledge, he has become a marketing
executive for that hotel simply for no reason.
From Management Towards Customers
Here the counter management or branch
management is the key task which helps to
make customers experience the relationship
banking and banker to experience the
professional banking. In a bus, the driver
should be perfect then only the passengers
reach the destination safely, likewise in the
branch, counter staff should be well-
experienced to fulfill the objectives of both
the customer as well as the bank.
Following are the five special skills of counter
staff which helps both banks as well as
customers.
1. Patience : The first and foremost quality
required is patience. This is the only
main skill which takes you to the
maximum heights if you possess the
nature of hard work along with it.
2. Courtesy : Patience is an inner skill and
courtesy is the outer skill which
includes wishing with a smile, calling
the person by name, offering the
customer a seat, paying a special heed
etc. These qualities make the customer
friendly and feel happy at your service.
3. Versatility : The counter staff should
have thorough knowledge about
various products of banks, rules and
regulations. If the customer asks for
C
O
U
N
T
E
R
Marketing Courtesy
Clear Vision Empathy
Financial
Services Service
Skills of
Negotiation Negotiation
MIS
Dignity of Relational
Organization Approach
service/clarifications the staff should
be in a position to render the service/
clarified the doubt and if not possible,
guide him to the proper person
concerned.
4. Attention : Allow the customer to speak
first and answer him accordingly point
by point. Interfering in between his
conversation will irritate the customer
and ultimately the bank will lose the
customer.
5. Smart : This is more important than
the above skills or features because
the first impression to the customer
should always be the best. You should
be smart in dress, way of talking, style
of functioning and delivering the
transactions. The impression makes the
customer confident that he will be
guided properly in his financial
transactions and his money will be
safer.
The employee at the counter carries the
brand of the bank and he has to live in the
Brand i.e. confidence of the Bank and
customer so that the customer certainly gets
new relationships into the fold of the bank.
Earning and spending are not important;
Earning, spending and saving are important.
Likewise getting customer is not important;
getting customer, retaining the customer and
enriching your banking family with new
relations are important. Every new customer
relation brings many more new relations
unless you should be a Relationship banker.
Hence, Counter is the threshold where the
relation begins; bank grows; customer
prospers; employee Cherishes which
ultimately lead to the growth of the
economy. ❑
Shri Naidu is presently working as Manager, ING Vysya Bank, Davangere.
41IBA BULLETINAUGUST 2005
Whether Amendement to CPC –A Boon or Myth K. Shivaramakrishnan
Shri Shivaramakrishnan is Manager & Faculty , Canara Bank, Regional Staff Training Centre, Hyderabad.
Act 2002 i.e. Act 22 of 2002 and the
amendments came into force with effect
from 1.7.2002. However the amendments
were challenged in Supreme Court and
Ultimately Supreme court has upheld the
Amendments in June 2003.
Main aim of the Amendments
The aim of the amendments inter alia is to
reduce delay in disposal of cases,
empowering courts to refer the cases to
alternate dispute resolution systems like
Arbitration, Lok Adalats etc., fixing specific
time limits for various processes of courts
etc.
Some of the important amendments which
reduces delay and pave way for faster
disposal of cases are as under.
● Summons are to be issued to
defendants within in 30 days of filing
of suit.
● Plaintiff has to produce documents and
copies of plaint to defendants within 7
days of orders of Court.
● If Summons to defendants are returned
undelivered, Plaintiff has to apply for
fresh summons within 7 days of return
as otherwise suit will be dismissed.
● Written Statements are to be filed by
Defendants within 30 days of Service
of Summons.
Government of India has
made certain
amendments to CIVIL
PROCEDURE CODE Vide
CPC (Amendment ) Act
1999 i.e. Act 45 of 1999
and CPC (Amendment)
● The date of hearing will be adjourned
for non-appearance not later than 7
days from the date of original hearing.
● Courts will not grant more than 3
adjournments.
● All endeavour should be made to
pronounce Judgement within 30 days
from the date of conclusion of hearing.
● Decree has to be drawn within 15 days
from the date of pronouncement of
Judgement.
What Is the Factual Position
While the aim of the Amendment is to
reduce delay and ensure faster disposal of
cases, in practice , in majority of cases this is
not happening for the following reasons :-
● Written Statements are to be filed within
30 days from the date of Service of
Summons.
However since maximum time limit is given
upto 90 days, courts are extending time
invariably upto 90 days and even they
extend time beyond 90 days as well.
In effect, it takes atleast 90 days for filing
written statement as against the envisaged
time limit of 30 days. Also courts are allowing
further 30 days time to defendants for filing
additional written statements.
● Eventhough adjournments due to non-
appearance should not be later than 7
days, courts are granting longer
adjournments.
● As per the amendments, courts cannot
grant more than 3 adjournments. But
in practice, courts are invariably
granting more than 3 adjournments for
some reason or other.
● Courts are expected to pronounce
Judgement within 30 days from the
date of conclusion of hearing and in
extraordinary circumstances the time
limit can be 60 days. In practice courts
take longer time and also in some cases
courts reserve the Judgements.
● As per the amendments, Decree has to
be drawn within 15 days from the date
of pronouncement of Judgement. But
in practice courts take longer time and
even months together in some cases to
draw a decree on some grounds or
other.
In spite of all the above one can definitely
notice a lot of improvements in disposal of
cases. Eventhough courts could not strictly
adhere to time norms prescribed under the
amendments for some reason or other, still
time consciousness is developed while
conducting cases. Instead of simply
postponing/adjourning the cases
indefinitely without any time limit as was
being done during earlier times, now courts
have started implementing reasonable time
norms though not strictly as per CPC
amendments as above.
For any new act/amendment, it takes
considerable time to settledown and
implementation part gets streamlined in
course of time. While hoping for better fruits
of the CPC amendments in the ensuring
periods, by having proper rapport and constant
follow-up with the advocates, the benefits of
the above amendments in CPC can be reaped
by the banks to the fullest extent. ❑
42 IBA BULLETINAUGUST 2005
Legal Decision Affecting Bankers Ajit Singh Cheema
Fixed Deposit Payable “Either or Survivor”Cannot be pledged by Either
AnumatiVersus
Punjab National Bank2004 (9) Scale 10
The appellant Mrs. Anumati and her husbandMam Chand got issued a fixed depositreceipt for Rs. 20,000/- with the respondentbank for a period of 84 months. The amountpayable on maturity was Rs. 39,930/-.According to appellant, half of the depositedamount belonged to her and the other halfbelonged to her husband. A loan was takenby one Khem Chand in his sole proprietarybusiness M/s. Verma Agro Industries. Thebank filed suit against M/s. Verma AgroIndustries, Khem Chand and appellant’shusband Mam Chand. During the pendencyof the above said suit a legal notice wasservied on the bank, by appellant and MamChand for premature encashment of thefixed deposit receipt. The bank filed anapplication in the court that the fixeddeposit receipt had been “mortgaged” assecurity towards the disputed loan and theamount of fixed deposit has been creditedin the disputed loan.
The trial court allowed the banks applicationholding that the amount of fixed depositaccount had rightly been adjusted in theaccount of the disputed loan. Mam Chandchallenged this order by way of a revisionapplication under Section 115 of CPC. Therevisional court held that the application wasnot maintainable and that it was open toMam Chand and his wife to initiate legalactions/proceedings for the receovery of theamount deposited against the Bank and itwas further held that the order of trial courtwould not in anyway inhibit the appellantfrom initiating such proceedings since shewas not a party either in the suit or to anyother proceedings initiated by the Bank. Therevisional court found as a fact that the fixeddeposit receipt did not bear the thumbimpression of appellant and the only thumb
impression appearing thereon was that ofMam Chand and it also held that since theFDR was not mortgaged as guarantee for theloan taken by M/s. Verma Agro Industries orKhem Chand the dispute regarding the FDRwas not in issue in the suit filed by the Bank.
The appellant then filed a complaint beforethe District Forum under the ConsumerProtection Act. The District Forum came tothe conclusion that the appellant wasentitled to recover half of the amount ofthe FDR i.e. Rs. 19,965 because she had nevermortgaged her share of the fixed deposit infavour of any party. It was further held thatsince the receipt was in the joint names ofthe appellant and her husband, the bankshould not have accepted any pledge of theaccount without informing the appellantand getting her consent. The Bank preferredan appeal to the state commission, whichproceeded on the basis that Mam Chandhad validly pledged FDR. The FDR waspayable to “either or survivor”, it showed thatthe Bank could have got discharge bymaking payment to either of the accountholders. According to the State Commissionwhen payment could have been made to asingle individual in terms of the directionsof the depositors then the bank was at libertyto accept mortgage of the FDR on behalf ofone of the depositors and the consent ofthe other depositor was not necessary. Theappeal was accordingly allowed and itscomplaint was rejected The NationalCommission merely concurred with the StateCommission and held that the financialinstitutions had every right to protect theirinterest by taking “conscious decision”, thebank has taken “conscious decision” in thiscase and it could not be faulted and therewas no deficiency of services. Aggrieved bythe decision and the National Commission,appellant preferred the present appeal tothe Supreme Court.
The Supreme Court held as under –
A fixed deposit receipt in the joint names oftwo persons is nothing but a joint account
which, as the name suggests, is repayableon the expiration of the agreed period. TheFDR is merely a written acknowledgementby the bank that it holds a certain sum tothe use of its customers. The Bank is thus adebtor to the account holders in respect ofthe amount deposited. A debt which isrepayable by the Bank to the accountholders with interest on the expiry of anagreed period. An “either or survivor” clausein such an account means that the amountpayable by the Bank on maturity of the fixeddeposit may be paid to either of the accountholders by the Bank in order to obtain avalid discharge. In other words under atriparitite agreement between the jointaccount holders inter se and the Bank, theBank may, on maturity, make payment onlyto either of them. This tripartite agreementcannot be bilaterally modified by one of thejoint account holders, for example bypledging the account with any third partyincluding the Bank itself in its capacity ofcreditor, so that the amount becomespayable to such third party, without theconsent of the joint account holder.
In the present case, the contract in respect ofthe joint account was between the Bank andthe husband and wife. The fixed deposit wasnot a debt due by the bank to Mam Chandalone which could be set off by the bankagainst any claim that the bank may haveagainst Mam Chand. Besides the right of MamChand was to receive the money depositedonly after it matured, if he survived, supposingMam Chand had died before the fixeddeposit matured, the only person entitled toget the money would be the appellant. Thisright of the appellant could not have beentaken away without her consent.
Under the circumstances it was held that theBank had no right to refuse payment of theamount deposited to the appellant. TheDistrict Forum was correct accepting and theState Commission and National Commissionerred in rejecting the appellants complaint.
The appeal allowed ❑
Contributed by Shri Ajit Singh Cheema, Senior Manager, Punjab & Sind Bank, Amritsar.
43IBA BULLETINAUGUST 2005
Banking Scene : IndianMid Term Appraisal of the 10th Plan
Targets
The Mid Term Appraisal of the 10th Plan
conducted by the National Development
Council (NDC) noted that in some areas of the
economy is doing well and these gains need
to be consolidated, but there are also important
weaknesses, which if not corrected could
undermine even the current performance level.
Overview of the performance of the economy
and problems of the economy are summarized
as follows:
GDP growth has averaged 6.5 per cent in the
first three years, which is below the Tenth Plan
target of 8.1 per cent. Positive factors include
(a) improvement in private corporate sector
investments, (b) positive international
perceptions on India (c) tolerant inflation level
(d) comfortable external payment position
with substantial inflows from abroad leading
to comfortable foreign exchange position.
Industrial sector also showed signs of
improvement. The ultimate aim should be to
consolidate the gains in these developments
and to overcome the weakness in the economy.
Key weak areas are identified as follows:
Aggregate Growth : Though the plan fixed
a target of 8.1 per cent, it is difficult to achieve
the target and the likely growth rate is
expected to below 7 per cent during the plan
period. An important reason for the lower
growth is that investment did not increase in
line with available investible resources.
Agriculture Growth : Agriculture growth is
very poor over the last two decades.
Agriculture growth has decelerated sharply
from 3.2 per cent to 1.9 per cent between
1980-81 and 1995-96. There is a need to
revamp the entire strategy and more action
is called for to improve the performance in
agricultural sector.
Infrastructure Problems: Inadequate
infrastructure in both rural and urban areas
are a major factor constraining India’s growth.
The quality of infrastructure impacts on our
ability to compete globally and also to attract
Foreign Direct Investment.
International Developments : Owing to
high oil prices, our import outgo is quite high.
Since we have ample foreign exchange
reserves at the moment, the impact of the oil
prices are not passed on to the users. But if
the oil prices remain high, its impact need to
be passed on to the consumers, which will
lead to inflation or fiscal deficit in the country.
Another cause of concern is the downturn in
the world economy, which will affect our
export growth considerably. It is estimated
that every 1 percentage point reduction in our
export growth rate will reduce the growth rate
of GDP by 0.2 percentage points.
Social Development : Our social indicators
are not only lower than the levels in East Asian
countries, but they are lower even in
comparison with the levels achieved by these
countries twenty five years ago. The social
indicators also show wide disparity in the
gender gaps, large rural and urban differences
and wide variation across states.
Employment : This is another area of grave
concern. Studies based on data collected from
organized and unorganized sectors state that
while employment may be increasing in the
unorganized sector in response to growth,
there is actually a contraction in employment
in the organized sector, which is the preferred
sector for employment by new entrants to the
labour force.
Inequality and Poverty : Though the poverty
has declined, the decline was less than
targeted. The moderate improvement in
education and health indicators implies that
access to more productive employment
remains limited, especially in backward
regions and amongst disadvantaged groups.
Balanced Regional Development : Regional
imbalances in the development of different
states present a picture which require
focussed attention. Some states were able to
reap the benefits of the economic reforms,
but some others were not able to do so. Even
district backwardness in a well performing
state also presents a grim picture.
Resources in the Public Sector : The
availability of resources in the public sector
to meet targeted levels of plan expenditure is
an area which deserves attention. Neither the
Centre nor the States have been able to
44 IBA BULLETINSEPTEMBER 2005
mobilize the resources needed to keep
outlays in line with Tenth Plan projections and
this has led to significant under funding in
many sectors. The consolidated public debt
of the Centre and States taken together is
about 80 per cent of the GDP which is among
the highest in emerging market economies.
The scope and time for correcting these
deficiencies during the 10th plan period is
very limited. The Mid Term Appraisal suggest
various corrective measures in these areas.
These corrective measures could be
considered for formulating the 11th Five Year
Plan targets and policies.
Declaration of Dividend
The Reserve Bank has decided to grant
general permission to banks to declare
dividends, provided they comply with the
following conditions:
Eligibility Criteria
1. Only those banks, which comply with the
following minimum prudential
requirements, would be eligible to
declare dividends without the Reserve
Bank’s prior approval :
(a) capital to risk-weighted assets ratio
(CRAR) of at least 9 per cent for
preceding two completed years and
the accounting year for which it
proposes to declare dividend.
(b) Net non-performing assets (NPAs) of
less than 7 per cent.
In case any bank does not meet the
above CRAR norm, but is having a
CRAR of at least 9 per cent for the
accounting year for which it
proposes to declare dividend, it
would be eligible to declare
dividend provided, its net NPA ratio
is less than 5 per cent.
2. The bank should comply with the
provisions of Sections 15 and 17 of the
Banking Regulation Act, 1949.
3. The bank should comply with the
Reserve Bank’s prevailing regulations/
guidelines, including creating adequate
provisions for impairment of assets and
staff retirement benefits, transfer of
profits to statutory reserves, etc.
4. The proposed dividend should be
payable out of the current year’s profit.
5. The Reserve Bank should not have placed
any explicit restrictions on the bank for
declaration of dividends.
Regarding the quantum of dividend, the
following stipulations were made by the RBI.
Banks which fulfil the eligibility criteria, may
declare and pay dividends, provided –
● The dividend payout ratio does not
exceed 40 per cent. [Dividend payout
ratio should be calculated as a
percentage of ’’dividend payable in a
year’’ (excluding dividend tax) to ‘‘net
profit during the year’’.
● In case the profit for the relevant period
includes any extraordinary profits/
income, the payout ratio should be
computed after excluding such extra-
ordinary items for reckoning compliance
with the prudential payout ratio.
● The financial statements pertaining to
the financial year for which the dividend
is declared, should be free of any
qualifications by the statutory auditors,
which have an adverse bearing on the
profit during that year. In case of any
qualification to that effect, the net profit
should be suitably adjusted while
computing the dividend payout ratio.
The Reserve Bank will not entertain any
application for a higher dividend payout ratio
than the one for which the banks qualify.
Door-step Banking
The Reserve Bank has advised all scheduled
commercial banks to formulate a scheme for
providing services at the premises of a
customer within the framework of Section 23
of the Banking Regulation Act, 1949.
Accordingly, the banks have to formulate the
scheme with the approval of their respective
bank boards and send the same for RBI
approval. In the interregnum, agency banks
may continue to lift cash and credit
instruments, etc., from the premises of central
and state government departments.
India’s trade deficit
India’ s exports recorded an increase of 19.5
per cent during the first quarter of the current
fiscal. Imports on the other hand recorded a
sharper growth of 38 per cent during the
same period. As a result, the trade deficit
doubled to $11.4 billion in the first quarter of
2005-06 compared to $5.9 billion in April-June
2004-05. ❑
Compiled from different sources bySmt. Jayasree Menon
45IBA BULLETINSEPTEMBER 2005
46 IBA BULLETINSEPTEMBER 2005
ADB gets tougher on Philippine Reforms
The Asian Development Bank (ADB) hasannounced a new three year strategy for thePhilippines, under which new lending couldrange from zero to as much as $1.5 billiondepending on the pace of fiscal consolidationand key sector reforms. The ADB expects thePhilippines to proceed with measures toboost tax collection and cut the budgetdeficit. If the fiscal consolidation is weakened,the bank may stop lending to the country. Onthe other hand, if the government succeedsin improving public finance, the bank willconsider to double future lending to $1.5billion in the next three years. Around 90 percent of the new loans would be quickdisbursing, but they are high-conditionalityprogramme loans that could help thePhilippines cut costly commercial borrowingsto refinance maturing debt. InternationalCredit Rating Agencies like Standard & Poor,Fitch and Moody’ s have cut the outlook forPhilippine credit ratings over the future of theexisting government. They felt that theexisting government would not be in aposition to avoid budget deficit and avoid anArgentine-style debt default. Against thisback drop, the ADB had stated that the levelof financial support for the Philippines for2005 to 2007 would be contingent onsignificant front loading of the fiscalconsolidation process, backed by anenhanced tax effort to ensure thesustainability of economic reforms. It wouldalso stop the other funds because the counterpart funds from the government will not bethere once the government falls. As such, thebank intends to disburse $1.5 billion in newstructural adjustment loans, which do notrequire counterpart funds. But if phillippinesimprove tax revenues and implementedother policy reforms, then it is a strategic shiftin approach and modality.
Retail Banking is catching up in Centraland Eastern Europe
Retail banking is catching up with corporatebusiness as the main driver of financial
activity in the fast –growing economies ofCentral and Eastern Europe. According to astudy conducted by the Austria’s co-operativebanks, one of the biggest financial group inthe region, the demand for retail bankingproducts has soared on the back of strongeconomic growth and rising affluence. Whiledemand for retail banking products hasneared west European levels in some centraland eastern European countries, massivegrowth potential remains in less developedor affluent regions. The penetration of debitand credit cards in Slovenia and Croatia isabout 1200 cards for every 1000 inhabitantswhich is now virtually at Austrian levels. Butother parts of Eastern Europe still have hugeroom for growth. In Romania, one of the leastdeveloped banking markets in the region,Raiffeisen International is opening between40,000 and 60,000 new retail accounts amonth. But in a relatively developed Hungary,upto 25 per cent of people still has no bankaccount. Demand for consumer credit is sostrong in Croatia, Bulgaria and to a lesserextent, Romania that local authorities havetaken action to prevent overheating in themarket. Their measures have varied fromceilings on lending to forcing banks toincrease the level of non-interest bearingminimum reserves they deposit with centralbanks. Demand for mortgages has soared inthese regions. Strong underlying economicgrowth rates and the potential in retail andcorporate banking suggest foreign banks willexpand further in the region. Growth in theseregions is expected to come throughtakeovers of the dwindling number of localbanks still available, and consolidation amongbig foreign banks, which are already present.
Vietcom bank seeks partner
Vietcom bank, one of Vietnam’s four mainstate-owned commercial banks, wants to sella strategic stake to a foreign partner as partof its planned privatization. The bank islooking for a partner, which is culturally fit andalso help the bank to change fast and improvethe corporate governance structure as well.
Vietcom bank is viewed by the analysts as thebest managed of Vietnam’s big four statecommercial banks, which together accountfor about 70 per cent of total loans. However,they are highly susceptible to politicalpressure to lend to loss-making stateenterprises. Vietcom bank is slated to betransformed into a public company, withcommon shares issued and sold andaccountability to all its shareholders, ratherthan political leaders. The analysts also viewthis as a critical test of the Communistgovernment’s ability to undertake tough butessential structural reforms. Inspite of all theefforts, the government is planning to retain70 per cent of the equity. According tobanking industry sources, Vietcom bank hadapproached potential investors, but theinstitution’s asset quality is a concern and duediligence is expected to take a longer time.Vietcom bank, on its part had already shiftedits lending away from state enterprises, whichaccounted for just 50 per cent of its total loanportfolio, down from 90 per cent in 2005.Consumer lending and mortgage lending,now about 15 per cent of the loan book, areexpected to grow to around 40 per cent by2012.
Reforming OECD
The Organization for Economic Co-operationand Development (OECD) is essentially theeconomic policy research unit of 30 richnations, establishing guidelines oneverything from telecoms liberalization andfarm subsidies to macro economic policy. Theoversight of the OECD is undertaken by ahuge diplomatic staff from member countries.It entails more than 100 formal meetingsannually. Though discussions are on toincrease the OECD members to include someemerging economies and other EuropeanUnion countries, but before that, theorganization wants to reform internally.America has proposed that the OECD’scouncil meet only four times a year, insteadof twice a month. It also wants newprocedures for setting work priorities, voting
Banking Scene : Global
47IBA BULLETINSEPTEMBER 2005
rights and budget matters. The challenges ofreform and enlargement have to be met withcourage and it also calls for certain toughmeasures in the near future.
General Guidance for Payment SystemDevelopment
Committee on Payment and SettlementSystems (CPSS) issued a consultative reporton general guidance for Payment SystemDevelopment which aims to give assistanceand advice on the planning andimplementation of reforms in the paymentsystem as a whole. The report includes 14guidelines and accompanying explanatorytext on payment system development. TheCPSS had released these guidelines in May,2005 and sought comments by 30thSeptember, 2005. The Guidelines are groupedtogether to reflect the four key dimensionsof developing a national payment system. 1)the role of the banking sector 2) effectiveplanning and project implementation 3)developing the institutional frameworkrequired to sustain payment system reformand 4) designing a safe and efficient paymentinfrastructure to meet the particularemerging needs of a country’s economy.These guidelines are developed on the basisof the actual reform experiences of thedifferent countries. Since the development ofa national payment system is highly country-specific and conditional on a variety ofinstitutional, financial and economic factors,the specific implementation approach for aparticular guideline should be considered inthe context of each country’s ownenvironment. Therefore, from this angle, theseguidelines cannot necessarily be the “bestpractice standards” for every country.Guidelines are summarized below:
Banking System
1. Keep the central bank at the center :Due to its overall responsibility for a soundcurrency, the central bank has a centralrole in the development of the use ofmoney as an effective means of payment.
2. Promote the role of a sound bankingsystem : Payment accounts, instrumentsand services available to end users aremainly provided by banks, whichcompete individually but often need toact co-operatively as a system.
Planning
3. Recognise Complexity : Planningshould be based on a comprehensiveunderstanding of all the core elementsof the system and the principal factorsinfluencing its development.
4. Focus on needs : Identify, and beguided by, the payment needs of allusers in the system and by thecapabilities of the economy.
5. Set Clear Priorities : Plan and Prioritisepayment system developmentstrategically. Top priority should notnecessarily be assigned to theintroduction of highly sophisticatedtechnology. The plan should considerwhich elements of the existing systemcan be an avenue for futuredevelopment.
6. Implementation is key : To ensureeffective implementation of thestrategic plan, the success of thepayment system reforms dependscrucially on the effectiveimplementation of the strategic plan.
Institutional Framework
7. Promote market development : Theexpansion and strengthening of marketarrangements is a key aspect of theevolution of the payment system.
8. Involve relevant stakeholders :Encourage the development of effectiveconsultation among relevantstakeholders in the payment system. Theinvolvement of relevant stakeholders ininformation sharing, consultation andcollaboration facilitates coordinationbetween the central bank and other key
players on emerging payment systemchanges and policy initiatives.
9. Co-operate with other authorities :Effective payment system oversight bythe central bank requires collaborativearrangements with other authorities.Arrangements between the centralbank and other agencies to exchangeviews, collaborate on relevant issues and,where needed, coordinate relevantpolicies can help to ensure safe andefficient development of the system.
10. Promote legal certainty : Develop atransparent, comprehensive and soundlegal framework for the system. The legalframework is necessary to provide legalcertainty and reduces the risk.
Infrastructure
11. Retail – give more choice to morepeople : Extend the coverage andchoice of non-cash paymentinstruments-and services available toend-users by expanding and improvinginfrastructures.
12. Large value –business case leads,technology follows : Develop a large-value payment system based primarilyon the needs of financial markets andthe growth in time-critical interbankpayments.
13. Securities-Plan Securities andpayment systems together : Co-ordinate the development of theinfrastructures for securities and large-value payments.
14. Retail, large value and securities-co-ordinate settlement : Co-ordinatesettlement processes for the coresystems to effectively manage theinterrelated liquidity needs andsettlement risks among them. ❑
(Compiled from various sources bySmt. Jayasree Menon)
IBA BulletinFor Subscription kindly contact the Communication Department, IBA
Tel. : 022-2217 40 40 • Fax : 022-2218 42 22 • [email protected]
48 IBA BULLETINSEPTEMBER 2005
Book Review
Manual on Foreign Exchange is a textbook or
a reading material covering wide ranges of
topics on Exchange Rate Mechanism, Foreign
Currency Financing Options, International
Trade (Export and Import of goods and
services) and matter relating to Foreign Trade
Policy, Capital Account Convertibility and
Anti – Money Laundering Guidelines.
The book contains thirty chapters, which are
divided into five sections. In Section I (ten
chapters), after giving introduction on the
concept of foreign exchange, it deals with
Exchange Rate System, Exchange Rate
Mechanism, Natural Real Exchange Rates,
Forex Derivatives, etc. Section II (ten
chapters) discusses about Export-Import
business, Export Credit, EXIM Bank, External
Commercial Borrowings, Foreign Currency
Financing Options, etc. Section III (three
chapters) basically deals with the concepts
and issues in Inward and Outward
Remittances. Section IV (six chapters)
elaborates on Foreign Trade Policy, FEDAI
rates, Anti-Money Laundering Guidelines,
Sodhani Committee Report and Tarapore
Committee Report on Capital Account
Convertibility. Section V (one chapter) gives
Foreign Exchange Arithmetic with practical
examples. Updation of Foreign Trade Policy of
India as on March, 2005 is also given in the
annexure that follows.
The book, although is an updation of the
earlier version, has many add-on new features
that have been introduced in the process of
Reviewed by : Shri P. K. NayakAssistant Advisor, Reserve Bank of India,
Mumbai - 400 001.
liberalisation. The book is best suited for bankers,
exporters/importers, corporate having foreign
exchange component of business, consultants
and professionals, for students appearing for
CAIIB exams and for all those who have interest
in international business.
The book, written by a senior and seasoned
banker Shri R.S. Arora, is not only authentic in
its information content but also an interesting
piece as the author has presented the theory
and concepts punctuated by his practical
experience. This book is a treasure trove. The
content of the book truly reflects its title
“Manual on Foreign Exchange”. ❑
Book : Mannual on Foreign Exchange (Exchange Rate Mechanism and Foreign Currency Financing Options)Author : R. S. Arora
Publishers : Skylark Publications, 1/5, Bhagat Singh Lane, Gole Market, New Delhi - 110 001
Year of Publication : 2005Price : Rs. 250/-
Pages : 458
Book : A Customised Banker
Author : Dr. M.G. Kale
Publishers : Varada Prakashan Pvt. Ltd. 397/1, Senpati Bapat Marg, Pune - 411 016
Price : Rs. 450/-
Reviewed by : Shri T. Ravi Sankar TrivediGeneral Manager, Andhra Bank,
Mumbai.
A Customised Banker – A monologue Book
by Dr. M.G. Kale by name itself suggests he has
explained in detail about the relationship
between a Banker and a Corporate Borrower.
Dr. Kale who himself had a long stint at one
of the nationalized Banks and covered in
detail in terms of Credit (Appraisal) in 3 parts.
The first part consists of Eight chapters which
covers the changing Indian Banking scenario,
the role of banker as an advisor both the
cultures of banker and borrower and finally
about good governance, which is of great
importance as of now and also in the days to
come as we are also fast moving from
Corporate Governance to Entrepreneur
Governance.
The 2nd part which consists of six chapters are
really useful for a banker especially those who
are handling credit in their day to day
functioning. It covers topics like – credit
appraisal and assessment of WC and WC
management and also practicial tips as to what
a Banker has to do during his interactions and
visits to the client’s place of work.
The last part consists of 6 chaptes mainly
deals with Human Resources subject. It tunes
one’s mind to the knowledge management,
individuals emotional competence and
intelligence and how the CRM Technology
can be scientifically utilized to the better
benefit of the individual and through him for
the benefit of the organization.
In total, this book, which has been the great
efforts of a professional banker, is really useful
to the existing as well as new entrants in the
banking sector. ❑
49IBA BULLETINSEPTEMBER 2005
The new developments in Indian financialmarkets are but offshoots of implementationof financial sector reforms and de-regularization of markets. In a decontrolledfinancial market, interest rates are guided byintense competition and demand & supplytheory will aptly apply.
The falling returns on traditional investmentslike bank deposits led the common public tomove towards other avenues, which will givebetter returns.
In this backdrop, it has become imperative toboth financial students, as well as, commoninvesting public to understand various facetsof Securities & Financial products.
At the outset, I would like to appreciate IIB&Fefforts to develop and nurture qualified andcompetent bankers / financial professionals.
The author of the book Mr. Sunder Sankarandid a splendid job in preparing theenlightening course material. This book willbe immense use to the readers.
Structured in 10 chapters, majority aspectsrelated to Securities and Financial Investmentproducts are explained in a simple, easy tounderstand manner.
In chapter ‘Investment Concepts & AssetClasses’ different investment concepts, theirfeatures, risks etc., have been brought-out.Different investment styles, important termslike short settling, margin trading, hedging,diversifiication, immunization etc., have beenexplained. Debt & Equity investments are alsomethodically covered.
Chapter on ‘Financial Investment Products’contain useful information regardinginvestment terms like equity, preferencedebenture, bank deposits, mutual fundinvestment, postal savings etc. The bona fidebenefit to the reader is detailed elucidationon different types of derivatives, forwardcontracts, futures, options and swaps. Everyfinancial student needs to go through thischapter meticulously.
Chapter on ‘Statistical and MathematicalTools’ are particularly important for finance
and investment professionals. Complexcalculations/tools like differentiation, linerequation, quadratic equation, compounding,discounting, arithmetic mean, geometricmean, standard deviation, Z-scale, co-variance,R-square etc., are explained in an enchantingmanner. Indeed, a multifaceted stuffexplained in a coherent manner.
The chapter on ‘Risk & Return’ illustrates theinvestor’s ability and willingness to invest ordetermine suitable investment options.Important terms like opportunity set,indifference curve, meeting point, utilityanalysis, and absolute/relative returns are wellcovered. Also explanied are portfolio risk,portfolio return, counter party risk, credit risk,inflation risk, re-investment risk etc.
To follow up with the different statistical/mathematical methods deliberated already,the chapter on ‘Portfolio Analysis’ containsdifferent examples on portfolio analysis.Different mathematical/statistical formalaedescribed in previous chapter are showcasedin example manner for the benefit of readers.Essential terms/investment models like Beta,Capital Assets Pricing Model and ArbitragePricing Model are brain stirring and are ofintellectural stuff. These calculations areuseful tools in assessing security risks andreturns. Though of limited significance inIndia, the case of International Investments i.e.global diversification and its advantages havebeen highlighted.
The relation between information, responseof markets to information is well explained.The alternative efficiency of markets, i.e. weak,semi-strong and strong is covered in a fineway, which will ultimately, determine theinvestment strategies and potential returnsfrom the market. Key points of Prohibition ofInsider Trading Regulation 1992 Act, i.e.Insider, Connected Person, Price SensitiveInformation, Prohibition, Compliance Officer,Trading Window etc., are deliberated in a stepby step method. Undeniably, this is a usefulchapter for officials of many a IndianCompany/Financial Institution.
Different types of primary issues, namely IPO,
public issue, rights issue, bonus issue, raisingcapital through GDR/ADR, de-mutualizationand corporatization of stock exchanges havebeen discussed in chapter ‘SecuritiesMarket’. The role of SEBI in protectinginvestor interest, Investment Bankers role inprimary issues and Merger & Acquisitiontransactions, borkers/sub-brokers role inpublic issues is well discussed.
The chapter on ‘Depository and InvestmentProcess’ throws light on depositoryfunctioning and related aspects. The chaptercontains vital information on how todetermine likely return from a shareinvestment. It also describes the ground rulesfollowed in stock exchanges for settlementand the ways to handle defaults. I suggestthat small investors should go through thischapter for protecting their securities andenhancing returns on them.
Last chapter, i.e. ‘Regulatory Frame Work’ iswell structured. The regulatory aspects ofderivatives, FIIs & Collective Investmentschemes are well explained. Variousregulatory aspects realted to SEBI & itsfunctions; Securities Contracts Regulation Act1956; RBI, Companies Act; CorporateGovernance rules etc., are described in asimple and intelligible manner. Enhancementof shareholder value, keeping in view theinterests of other stakeholders is the essenceof Corporate Governance.
There is no exaggeration in stating that thisbook is worth its gold in terms of content.
Author Mr. Sunder Sankaran provided aqualitative and knowledge boosting materialon a subject that is taking roots in India. Iadvocate that this book should be made asubject for all financial students.
Price (Rs. 175/-) is quite irrelevant consideringthe content and its worth.
I recommend this book to a) all students offinance, banking & treasury and b) to all smallinvestors. ❑
Reviewed by : Shri V.S.R. MurthyGeneral Manager, Union Bank of India,
Mumbai - 400 021.
Book : Securities Market & Products
Author : IIB&F
Publishers : Taxmann Allied Services P. Ltd.
59/32, New Rohtak Road
New Delhi 11 0 005
Price : Rs. 175/-
Pages : 271
Book Review
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DeeefLe&keâ JeefOe&le cetuÙe
keâe cetue leòJe Ùen nw
efkeâ Hetbpeer efve:Megukeâ venerb
nw~ Fme cetuÙe mes efkeâmeer
keâcHeveer Ùee FkeâeF& Éeje
MesÙejOeejkeâ keâes Gmekesâ
efveJesMe Hej Deefleefjkeäle
cetuÙe HeÇoeve keâjvee nw~
Fme efJeMues<eCe cesb Skeâ
FkeâeF& keâer Gme ÙeesiÙelee
keâe Helee ueieeÙee peelee nw
peneb Fmekeâer GHeepe&ve
#ecelee kegâue Hetbpeer kesâ
ueeiele mes DeefOekeâ nesleer
nw~ Fme lejn DeeefLe&keâ
JeefOe&le cetuÙe efJeMues<eCe
Éeje Skeâ Ssmes {ebÛes keâe
Helee ueieeÙee pee mekeâlee
nw efpememes MesÙejOeejkeâesb
kesâ cetuÙe cesb Je=efæ keâer
pee mekesâ~ meeLe ner,
HeÇyebOekeâeW keâes DeeefmleÙeesb
kesâ yesnlej HeÇÙeesie Deewj
DeuHe HeÇÙeesie keâer efmLeefle
cesb megOeej ueeves kesâ efueS
HeÇeslmeeefnle Yeer keâjlee
nes~
efnboer-Keb[
51DeeFyeerS yeguesefšve
Deiemle 2005
DeeefLe&keâ JeefOe&le cetuÙe : Ùen Skeâ Ssmeer mebkeâuHevee
nw efpemes vÙetÙeeke&â efmLele HejeceMeer& keâcHeveer mšve& SC[
mšsJeš& ves efJekeâefmele efkeâÙee nw~ Ùen efJelleerÙe keâeÙe&-
efve<Heeove keâe Skeâ Ssmee ceeHeoC[ nw efpememes FkeâeF& kesâ
JeemleefJekeâ DeeefLe&keâ ueeYe keâe Helee Ûeuelee nw Fmes nce
FkeâeF& kesâ efveJeue ueeYe cesb mes Hebtpeer HeÇYeej keâes Iešekeâj
HeÇeHle keâjles nQ~ Hetbpeer HeÇYeej keâes Hetbpeer efveJesMe keâes Hebtpeer
ueeiele mes iegCee keâjkesâ HeÇeHle keâjles nQ~
DeeefLe&keâ JeefOe&le cetuÙe · efveJeue HeefjÛeeueve ueeYe
(keâj meceeÙeesefpele) - Hebtpeer HeÇYeej
Hetbpeer HeÇYeej · efveJesMe ² Hetbpeer ueeiele
DeeefLe&keâ JeefOe&le cetuÙe keâer mebkeâuHevee uesKee HeÇCeeueer
kesâ DeJeefMe<š DeeÙe kesâ efmeæevle Hej DeeOeeefjle nw
efpemekeâe DeLe& Ùen nw efkeâ efkeâmeer FkeâeF& ceW nesves Jeeueer
JeemleefJekeâ DeeÙe ner JeemleJe cesb DeJeefMe<š DeeÙe ner
nw efpememes MesÙejOeejkeâeW keâes Gvekesâ DeeJeMÙekeâ HeÇefleHeâue
keâe Yegieleeve efkeâÙee peelee nw~
DeeefLe&keâ JeefOe&le cetuÙe keâe cetue leòJe Ùen nw efkeâ Hetbpeer
efve:Megukeâ venerb nw~ Fme cetuÙe mes efkeâmeer keâcHeveer Ùee
FkeâeF& Éeje MesÙejOeejkeâ keâes Gmekesâ efveJesMe Hej Deefleefjkeäle
cetuÙe HeÇoeve keâjvee nw~ Fme efJeMues<eCe cesb Skeâ FkeâeF&
keâer Gme ÙeesiÙelee keâe Helee ueieeÙee peelee nw peneb
Fmekeâer GHeepe&ve #ecelee kegâue Hetbpeer kesâ ueeiele mes DeefOekeâ
nesleer nw~ Fme lejn, DeeefLe&keâ JeefOe&le cetuÙe efJeMues<eCe
Éeje Skeâ Ssmes {ebÛes keâe Helee ueieeÙee pee mekeâlee nw
efpememes MesÙejOeejkeâesb kesâ cetuÙe cesb Je=efæ keâer pee mekesâ~
meeLe ner, keâeÙe&Heeuekeâesb keâes Hetbpeer keâer ueeiele kesâ yeejs cesb
peeie¤keâ yeveeves kesâ DeueeJee, Fme efJeMues<eCe mes Ssmeer
HeefjÙeespeveeDeeW ceW efveJesMe keâjves keâer mebmlegefle keâer pee
mekeâleer nw pees MesÙejOeejkeâeW kesâ efnle cesb nes~ meeLe ner,
HeÇyebOekeâeW keâes DeeefmleÙeesb kesâ yesnlej HeÇÙeesie Deewj DeuHe
HeÇÙeesie keâer efmLeefle cesb megOeej ueeves kesâ efueS HeÇeslmeeefnle
Yeer keâjlee nes~
DeeefLe&keâ JeefOe&le cetuÙe mes ueeYe
keâcHeefveÙeeW keâes GlHeeo yeepeej ceW HeÇJesMe keâjves
Deewj Gvekeâer efye›eâer leLee ueeYe ceW ceeie&oMe&ve
keâjlee nw~
Ùen FefkeäJešer efJeMues<eCe keâe Skeâ DeeoMe&
meeOeve nw Deewj meeLe ner MesÙejOeejkeâ cetuÙe
yeÌ{eves kesâ efueS efJeefYevve jCeveerefleÙeesb kesâ cetuÙeebkeâve
cesb meneÙekeâ nesleer nw~
DeeefLe&keâ JeefOe&le cetuÙe kesâ ceeOÙece mes ner efveJesMekeâ
Hetbpeer keâer ueeiele kesâ meeHes#e efkeâmeer keâcHeveer kesâ
YeefJe<Ùe ceW nesves Jeeues ueeYeHeÇolee kesâ yeejs ceW
peevekeâejer HeÇeHle keâjles nQ~
DeeefLe&keâ JeefOe&le cetuÙe keâe keâeÙee&vJeÙeve
DeeefLe&keâ JeefOe&le cetuÙe keâe keâeÙee&vJeÙeve Ûeej ÛejCeeW cesW efkeâÙee
peelee nw~ Fme HeÇef›eâÙee keâes mšve&-mšsJeš& ves megPeeÙee nw :
i. ceeHe : pees Yeer keâcHeveer Fmes ueeiet keâjvee
Ûeenleer nw Gmes efveÙeefcele ¤He mes Fme HeÇef›eâÙee
keâe DevegmejCe keâjvee ÛeeefnS~ efveOee&efjle uesKee
meceeÙeespeve kesâ yeeo ner Fmekeâe efJeMues<eCe
efkeâÙee peevee ÛeeefnS~
ii. HeÇyebOeve HeÇCeeueer : DeeefLe&keâ JeefOe&le cetuÙe
Skeâ HeÇyevOe oMe&ve nw Deewj Fmekeâes ueeiet keâjves
kesâ efueS keâcHeveer keâes DeHeves HeÇyevOe leb$e keâes
Fmeer kesâ Deveg¤He yeveevee ÛeeefnS~ DeeefLe&keâ
JeefOe&le cetuÙe HeÇyevOeve HeÇCeeueer kesâ DeeOeej Hej
ner jCeveerefleÙeesb keâe ÛegveeJe, Hetbpeer efJeefveÙeespeve,
JÙeeHeej cesb ÛegveeJe Deewj ue#Ùe efveOee&jCe Deeefo
efveCe&Ùe uesves ÛeeefnS~
iii. DeefYeHeÇsjCee : efkeâmeer keâcHeveer keâes DeeefLe&keâ
JeefOe&le cetuÙe ueeiet keâjves kesâ Henues HeÇeslmeenve
Ùeespevee keâer ¤HejsKee lewÙeej keâj uesvee ÛeeefnS~
Fme Ùeespevee mes Ùen megefveefMÛele neslee nw efkeâ
MesÙejOeejkeâ cetuÙe cesb Je=efæ mes ner HeÇyevOekeâesb keâes
Yeer DeefOekeâ yeesveme efceue mekeâlee nw~ efye›eâer
DeeOeeefjle HeÇeslmeenve cesb HeÇyebOekeâesb keâes hegjmkeâej
efyevee ueeiele Deewj ueeYe DeeOeeefjle HeefjJeleer& Hej
efceuelee nw~ DeeefLe&keâ JeefOe&le cetuÙe DeeOeeefjle
HeÇeslmeenve HeÇCeeueer cesb HeÇyebOekeâeW keâes Flevee HeÇeslmeenve
efceuelee nw efkeâ Jes DeHeves keâejesyeej ceW
Fleves o#e nes peeles nQ efkeâ DeeefLe&keâ
JeefOe&le cetuÙe DeHeves DeeHe yeÌ{
peelee nw Deewj keâcHeveer keâe
yengcegKeer efJekeâeme Yeer neslee
nw~ DeleSJe DeeefLe&keâ
JeefOe&le cetuÙe keâe
GodosMÙe HeÇlÙeskeâ
keâce&Ûeejer keâes Skeâ
GÅeceer keâer lejn
lewÙeej keâjvee nw
e f p ememe s J en
DeHeves keâeÙe& keâe
efve<Heeove megÛee®
¤He me s k e âj
mekesâ~
iv. cevee s J e = e f l le :
DeeefLe&keâ JeefOe&le cetuÙe
Skeâ Ssmeer ¤HeevlejCe
leke âve e r k e â n w e fpeme s
ßeer efmebn FefC[Ùeve DeesJejmeer]pe yeQkeâ ceW cegKÙe DeefOekeâejer
nQ~ ßeer efmebn yeer.Sme.meer. (Dee@veme&), S«eerkeâuÛej SJeb
S.SÛe.Sce.Smemeer. (ke=âef<e) ef[«eerOeejkeâ nQ~ efheÚues oes
oMekeâ ceW yeQefkebâie mebyebOeer efJe<eÙeeW hej Deehekesâ 270 mes Yeer
DeefOekeâ uesKe efJeefYevve he$e-heef$ekeâeDeeW ceW ØekeâeefMele nes
Ûegkesâ nQ~ Deehekeâes je°^erÙe yeQkeâ, YeejleerÙe efjpeJe& yeQkeâ,
Fbef[Ùeve FbefmššdÙetš Dee@heâ yeQefkebâie Sb[ heâeFveQme leLee
DevÙe keâF& yeQkeâeW Éeje DeeÙeesefpele efveyebOe ØeefleÙeesefieleeDeeW ceW
keâF& hegjmkeâej Øeehle ngS nQ~
51
”
”Skeâ keâcHeveer keâe DeeefLe&keâ JeefOe&le cetuÙe Gmekesâ
efveJesMe Hej yeepeej oj mes DeefOekeâ efceueves Jeeueer
Je=efæMeerue jeefMe nw~ FefkeäJešer efveJesMekeâ DeHeves
efveJesMe Hej Gleves ner HeÇefleHeâue keâer DeHes#ee jKelee
nw pees Gmes yeepeej cesb efveJesMe keâjves mes efceuelee nw~
52 DeeFyeerS yeguesefšve
Deiemle 2005
HeÇYeeJeMeeueer {bie mes ueeiet keâjves kesâ efueS
keâeÙe&-mebmke=âefle Deewj ceveesJe=eflle ceW ÙeLeesefÛele
HeefjJele&ve keâer DeeJeMÙekeâlee nw~ JeemleJe ceW,
DeeefLe&keâ JeefOe&le cetuÙe Skeâ Ssmee DeeoMe& meeOeve
nw efpememes Fme HeefjJele&ve keâes megefveefMÛele efkeâÙee
pee mekeâlee nw~
DeeefLe&keâ JeefOe&le cetuÙe kesâ Ieškeâ
ÙeÅeefHe, DeeefLe&keâ JeefOe&le cetuÙe Skeâ uesKee HeÇCeeueer
DeeOeeefjle GHeeÙe nw, Ùen HeejcHeefjkeâ GHeepe&ve ceeHeoC[eW
mes efYevve nw~ Ùen Deblej Fve oes efyevogDeeW Hej
DeeOeeefjle nw :
HejcHejeiele uesKee HeÇCeeueer (efveJeue DeeÙe) keâes
meceeÙeesefpele keâj JÙeJemeeÙe keâer Jele&ceeve efmLeefle
keâe Helee ueieeÙee peelee nw~
MesÙejOeejkeâesb keâes Gvekesâ FefkeäJešer efveJesMe Hej
nesves Jeeues peesefKece kesâ yeejs cesb #eefleHetefle& osvee~
meYeer $e+Ce Deewj FefkeäJešer Hej HeÇYeej efveJeue
HeefjÛeeueve ueeYe (keâj meceeÙeesefpele keâjkesâ) mes
Ieše efoÙee peelee nw~
e f veJeue Hee fjÛeeueve ueeYe (keâj
meceeÙeespeve kesâ yeeo) : Ùen Jen ceeHeoC[
nw pees Hetjs ueeYe keâe mecetn nw efpememes meYeer
efveJesMekeâesb Deewj GOeejkeâlee&Deesb keâes Gvekesâ Ùeesieoeve
kesâ cegleeefyekeâ Yegieleeve efkeâÙee peelee nw~
efveJesefMele Hetbpeer : efveJesefMele Hetbpeer Jen mecemle
Hetbpeer nw pees Skeâ keâcHeveer cesb Gmekesâ Hetjs keâeÙe&keâeue
cesb ueieeÙeer peeleer nw~ Jeneb Gmekesâ meÇesle mes keâesF&
DeLe& veneR neslee~ Hetbpeer $e+Ce kesâ ¤He cesb, FefkeäJešer
kesâ ¤He ceW, keâeÙe&Meerue Hetbpeer kesâ ¤He cesb Ùee
mLeeÙeer DeeefmleÙeesb kesâ ¤He ceW nes mekeâleer nw~
efveJesefMele Hetbpeer Hej HeÇefleHeâue : Skeâ keâcHeveer
keâe DeeefLe&keâ JeefOe&le cetuÙe Gmekesâ efveJesMe Hej
yeepeej oj mes DeefOekeâ efceueves Jeeueer Je=efæMeerue
jeefMe nw~ FefkeäJešer efveJesMekeâ DeHeves efveJesMe Hej
Gleves ner HeÇefleHeâue keâer DeHes#ee jKelee nw pees
Gmes yeepeej cesb efveJesMe keâjves mes efceuelee nw,
ÙeÅeefHe Ùen meye keâcHeveer kesâ peesefKece keâer
¤HejsKee Hej efveYe&j keâjlee nw~ Fmeer lejn,
mebmLeeiele (HeÇesHeâeFue) Deewj efvepeer efveJesMekeâ
keâce mes keâce yeQkeâ keâer cetue GOeej oj Hej lees
HeÇefleHeâue keâer Gcceero keâjlee ner nw~
efveJeue HeefjÛeeueve ueeYe
efveJesefMele hetbpeer (meceeÙeesefpele keâj Iešekeâj)
hej Øeefleheâue
Deewmele efveJesefMele Hetbpeer
Hetbpeer ueeiele keâe Yeeefjle Deewmele : Hetbpeer
ueeiele keâe Yeeefjle Deewmele Skeâ DeJemej ueeiele
nw pees Gme oj kesâ mecekeâ#e nw efpemes efveJesMekeâ
DevÙe legueveerÙe peesefKece Jeeueer keâcHeefveÙeesb kesâ
mšekeâ cesb ueieekeâj HeÇeHle keâj mekeâlee nw~ Skeâ
keâcHeveer keâes Ssmeer HeefjÙeespeveeDeesb kesâ yeejs cesb
mebYeeJeveeDeesb keâer leueeMe keâjveer ÛeeefnS peneb
efveJeue HeefjÛeeueve ueeYe Hebtpeer ueeiele kesâ Yeeefjle
Deewmele mes DeefOekeâ nes efpememes Fmekeâer Hebtpeer
keâer GHeepe&ve #ecelee ceW Je=efæ nes mekesâ pees
Fmekesâ efveJesMekeâesb cesb efJeleefjle keâer pee mekesâ~
Fmeer lejn, keâcHeefveÙeesb keâes Ssmeer HeefjÙeespeveeDeesb
cesb Yeeie veneR uesvee ÛeeefnS peneb efveJeue HeefjÛeeueve
ueeYe (keâj meceeÙeespeve kesâ yeeo) Hetbpeer ueeiele
kesâ Yeeefjle Deewmele mes keâce nes~ Hetbpeer ueeiele
keâe Yeeefjle Deewmele JeemleJe cesb $e+Ce Deewj
FefkeäJešer keâe Deewmele Yeeefjle ueeiele nw~
DeeefLe&keâ JeefOe&le cetuÙe kesâ ceeHe
DeeefLe&keâ JeefOe&le cetuÙe Je=efæMeerue HeÇefleHeâue keâe Skeâ
ceeHe nw Ùee Skeâ keâcHeveer keâer Jen ÙeesiÙelee nw peneb
Fmekeâe HeÇefleHeâue Hebtpeer keâer ueeiele mes DeefOekeâ nw~
Ssmes DeeefLe&keâ JeefOe&le cetuÙe keâes mekeâejelcekeâ keânles
nwb~ peneb HeÇefleHeâue Hetbpeer keâer ueeiele mes keâce nw Jeneb
Fmes vekeâejelcekeâ keâne peeÙesiee~
DeeefLe&keâ JeefOe&le cetuÙe keâe Heâecet&uee
DeeefLe&keâ JeefOe&le cetuÙe · efveJeue HeefjÛeeueve ueeYe
(keâj meceeÙeespeve kesâ yeeo) - Hetbpeer HeÇYeej
Ùee
efveJesefMele Hetbpeer Hej HeÇefleHeâue - Hetbpeer ueeiele keâe
Yeeefjle Deewmele
yeQkeâeW ceW DeeefLe&keâ JeefOe&le cetuÙe %eele keâjves keâer HeÇCeeueer
efveJeue HeefjÛeeueve ueeYe (keâj meceeÙeespeve kesâ yeeo)
(keâ) kegâue DeeÙe.....
(Ke) HeefjÛeeueve ueeiele.....
(ie) DeeÙe (yÙeepe Deewj keâj Iešekeâj)......
(Ie) keâj keâe HeÇeJeOeeve.....
(*) DeemLeefiele keâj ceW HeefjJele&ve
(Ûe) efveJeue HeefjÛeeueve ueeYe (keâj meceeÙeesefpele
keâjkesâ)
· { (ie) - (Ie) - (keâ) }
efveJesefMele Hetbpeer
(1) HeefjÛeeueve Ûeeuet DeeefmleÙeeb { (keâ) ± (Ke) ±
(ie) }
(i) vekeâoer SJeb YeejleerÙe efjpeJe& yeQkeâ
ceW pecee jeefMe
(ii) yeQkeâeW SJeb ceebie cegoÇe yeepeej
cesb pecee jeefMe
(iii) DeefieÇce (3 Je<e& keâer HeefjHekeäJelee Jeeues)
(2) yÙeepejefnle osÙeleeÙeW { (keâ) ± (Ke) ± (ie)
± (Ie) }
(i) osÙe efyeue
(ii) GHeefÛele yÙeepe
(iii) Devle: DeeefHeâme meceeÙeespeve (efveJeue)
(iv) DevÙe (HeÇeJeOeeve keâes Meeefceue keâjkesâ)
(3) HeefjÛeeueveerÙe keâeÙe&Meerue Hetbpeer {(1) - (2)}
(4) mLeeÙeer DeeefmleÙeeb (Hegvecet&uÙeve Deejef#ele
efveefOe Iešekeâj
(5) DevÙe HeefjÛeeueveerÙe DeeefmleÙeeb { (keâ) ± (Ke) } :
(i) DeefieÇÇce (3 Je<e& mes DeefOekeâ HeefjHekeäJelee
Jeeues) - efveJeue Devepe&keâ DeeefmleÙeeb
(ii) efveJesMe
(6) DevÙe HeefjÛeeueveerÙe osÙeleeÙeW ({ (keâ) ± (Ke)
± (ie) } :
(i) Hetbpeer
(ii) Deejef#ele efveefOe (Hegvecet&uÙeve Deejef#ele
efveefOe Deueie keâjkesâ)
(iii) DeOeervemLe $e+Ce Deewj DevÙe yÙeepe
Oeeefjle yeeC[
(7) DevÙe HeefjÛeeueveerÙe DeeefmleÙeeb (HeefjÛeeueveerÙe
osÙeleeDeesb keâes Iešekeâj) { (5)-(6) }
(8) HeefjÛeeueveerÙe efveJesefMele Hetbpeer { (3) ±
(4) ± (7) }
(9) iewj-HeefjÛeeueveerÙe Hetbpeer {(keâ) ± (Ke)} :
(i) efveJeue Devepe&keâ DeeefmleÙeeb
(ii) DevÙe DeeefmleÙeeb
(10) kegâue efveJesefMele Hetbpeer { (8) ± (9)}
Hetbpeer ueeiele keâe Yeeefjle Deewmele
[e@. yeer. meeceue (2003) ves Hetbpeer ueeiele keâe
Deewmele %eele keâjves kesâ efueS 2000-01 kesâ
efueÙes FefkeäJešer keâer ueeiele 10.5 HeÇefleMele
Deewj 2001-02 kesâ efueS 10 HeÇefleMele keâer
oj mes efveOee&efjle efkeâÙee nw~ Ùen HetJee&vegceeve
Jele&ceeve yÙeepe ojeW SJeb yeepeej Heefjo=MÙe Hej
DeeOeeefjle nw~
[e@. yeer. meeceue (2003) ves Je<e& 2001-02 kesâ
DeeOeej Hej efveJesefMele Hetbpeer Hej HeÇefleHeâue keâes efveJeue
HeefjÛeeueve ueeYe (keâj meceeÙeesefpele keâjkesâ) Deewj Deewmele
efveJesefMele Hetbpeer kesâ DevegHeele mes efvekeâeuee nw~ je<š̂erÙeke=âle
yewbkeâeW keâe efveJesefMele Hetbpeer Hej HeÇefleHeâue 7.82 HeÇefleMele
(efmebef[kesâš yeQkeâ) Deewj 10.13 HeÇefleMele (DeesefjSbšue
yeQkeâ DeeHeâ keâe@ceme&) kesâ yeerÛe jne~ Fmeer lejn, Hetbpeer
ueeiele keâe Yeeefjle Deewmele 6.53 HeÇefleMele (yeQkeâ DeeHeâ
FefC[Ùee) Deewj 22.27 HeÇefleMele (Fbef[Ùeve yeQkeâ) kesâ
yeerÛe jne~ Fmekeâe efJeJejCe Deeies meeefjCeer ceW efoÙee ieÙee
nw~
² 100·
53DeeFyeerS yeguesefšve
Deiemle 2005
meeefjCeer
je<š^erÙeke=âle yewbkeâesb kesâ DeeefLe&keâ JeefOe&le cetuÙe
yeQkeâ keâe veece
efveJesefMele Hetbpeer Hej
hetbpeer ueeiele keâe
2-4
3-5
DeeefLe&keâ JeefIe&le cetuÙe
heejcheefjkeâ efJeefOeÙeeB
Øeefleheâue
Yeeefjle Deewmele
(keâjesÌ[ ®heÙes ceW)
mebÙegkeäle jQkeâ
12
34
56
78
910
11
12
13
2000-01
2001-02
2000-01
2001-02
2000-01
2001-02
2000-01
jQkeâ
2001-02
jQkeâ
2000-01
2001-02
1.
Fueeneyeeo yeQkeâ
8.60
8.82
7.35
7.19
1.25
1.63
252.92
10
370.69
10
11
14
2.
DeevOeÇe yeQkeâ
9.62
9.67
8.32
7.81
1.30
1.86
240.19
11
347.86
11
54
@3.
yeQkeâ DeeHeâ yeÌ[ewoe
8.77
8.75
7.22
6.99
1.54
1.76
848.54
31098.62
46
10
4.
yeQkeâ DeeHeâ Fbef[Ùee
8.47
8.58
7.17
6.53
1.30
2.04
694.66
41288.33
38
9
5.
yeQkeâ DeeHeâ ceneje<š^
8.66
9.39
7.38
7.62
1.28
1.77
222.84
12
386.44
12
10
8
6.
kesâveje yeQkeâ
8.61
9.50
6.96
7.34
1.65
2.16
985.02
11389.33
14
@4
@7.
mesvš^ue yeQkeâ DeeHeâ Fbef[Ùee
8.41
8.52
8.92
6.98
-0.51
1.54
-214.30
15
725.89
612
13
8.
keâejHeesjsMeve yeQkeâ
10.21
9.58
7.91
7.29
2.30
2.29
394.85
7466.40
91
@1
9.
osvee yeQkeâ
7.84
10.07
9.92
10.48
-2.08
-0.41
-311.64
16
-64.24
16
16
@16
10.
FefC[Ùeve yeQkeâ
8.11
8.95
24.60
22.27
-16.50
-13.33
-3605.26
19
-3253.73
19
16
@17
11.
FefC[Ùeve DeesJejmeer]pe yeQkeâ
8.48
9.40
7.41
7.47
1.07
1.93
294.98
8617.53
87
7
12.
DeesefjSbšue yewbkeâ DeeHeâ keâe@ceme&
10.20
10.13
8.41
7.76
1.79
2.37
444.97
6690.29
73
2@
13.
Hebpeeye vewMeveue yeQkeâ
8.88
9.26
7.30
7.18
1.58
2.08
897.79
21347.80
22
2@
14.
Hebpeeye SC[ efmebOe yeQkeâ
8.77
9.06
7.82
7.64
0.95
1.42
114.14
14
178.10
15
14
15
15.
efmebef[kesâš yeQkeâ
8.04
7.82
6.98
6.66
1.06
1.16
269.16
9331.87
13
1@
3
16.
Ùetkeâes yeQkeâ
8.92
9.28
15.94
14.09
-7.03
-4.81
-1541.70
18
-1310.16
18
13
11
17.
ÙetefveÙeve yeQkeâ DeeHeâ Fbef[Ùee
8.84
9.08
7.53
7.11
1.31
1.96
461.36
5782.80
54
@5
18.
ÙegveeFšs[ yeQkeâ DeeHeâ Fbef[Ùee
8.75
8.66
15.10
13.52
-6.35
-4.86
-1182.75
17
-956.89
17
15
12
19.
efJepeÙee yeQkeâ
8.83
9.42
7.33
7.63
1.51
1.79
192.77
13
264.75
14
96
je<š^erÙeke=âle yeQkeâ
8.78
9.09
8.92
8.40
-0.14
0.69
-760.46
4306.65
meÇesle : DeeFyeerS yeguesefšve ceeÛe&, 2003
@ yejeyejer keâe jwbkeâ
Fmemes Skeâ yeele mHe<š nes peeleer nw efkeâ je<š^erÙeke=âle yeQkeâeW keâe DeeefLe&keâ JeefOe&le cetuÙe Glmeenpevekeâ nw~ 19 je<š^erÙeke=âle yewbkeâesb cesb, 15 yeQkeâeW keâe DeeefLe&keâ JeefOe&le cetuÙe mekeâejelcekeâ jne nw
peyeefkeâ 4 yeQkeâeW keâe vekeâejelcekeâ jne nw~ Fmemes Ùen Helee Ûeuelee nw efkeâ Fve 15 yeQkeâeW ceW efveefOe keâe HeÇyebOeve keâce yÙeepe ojesb kesâ JeeleeJejCe cesb HeÇYeeJeMeeueer jne nw~
HeejcHeefjkeâ ceeHeoC[eW - efveJeue yÙeepe ceeefpe&ve, DeeefmleÙeeW Hej HeÇefleHeâue, FefkeäJešer Hej HeÇefleHeâue Deewj HeÇefle MesÙej GHeepe&ve #ecelee Deewj mebÙegkeäle jQkeâ kesâ DeeOeej Hej yeQkeâeW keâes ßesCeeriele efkeâÙee
ieÙee nw~ Fme lejn HeejcHeefjkeâ ceeHeoC[eW SJeb DeeefLe&keâ JeefOe&le cetuÙe kesâ DeeOeej Hej yeQkeâeW keâer ßesefCeÙeeW ceW meceevelee veneR nw~ Deepe peye ueieYeie meYeer je<š^erÙeke=âle yeQkeâ yeepeej mes Hetbpeer keâer
Gieener keâj jns nQ lees Ùen GHeÙegkeäle meceÙe nw efkeâ yeQkeâ DeHeves efve<Heeove kesâ HeejcHeefjkeâ ceeHeoC[eW mes yeenj Deekeâj DeeefLe&keâ JeefOe&le cetuÙe DeHeveeÙesb efpememes MesÙejOeejkeâesb kesâ cetuÙe cesb Je=efæ
nes mekesâ~
uesKe
ceevekeâ Je Devepe&keâ DeeefmleÙeeb :
yesnlej ØeyebOeve
mejpeerle efmebn
Deepe kesâ yeoueles heefjÂMÙe ceW GoejerkeâjCe,
efvepeerkeâjCe Deewj Yetceb[ueerkeâjCe kesâ oewj ves
efpeme ØeeflemheOee&lcekeâ yeepeej keâe efvecee&Ce
efkeâÙee nw GmeceW efkeâmeer Yeer yeQkeâ Éeje Dehevee
DeefmlelJe yeveeÙes jKeves kesâ efueS Deheveer
keâeÙe&ØeCeeueer SJeb JÙeJemLee heefjJele&ve ceW
Deewj yesnlej ØeyebOeve keâer DeeJeMÙekeâlee nesieer~
$e+Ce osves keâer JÙeJemLee ceW
heefjJele&ve keâjkesâ mšeheâ
keâer menYeeefielee yeÌ{eveer
ÛeeefnS keäÙeeWefkeâ mšeheâ keâer
efmeheâeefjMe hej efoÙee ieÙee
$e+Ce keâYeer Yeer SveheerS
veneR nes mekeâlee~ $e+Ce
osles meceÙe meYeer mšeheâ
keâes ceeuetce jns efkeâ
DecegKe JÙeefkeäle keâes Decegkeâ
$e+Ce efoÙee pee jne nw~
Fmemes Deiej $e+Ceer ceW
keâesF& keâceer nesleer nw lees
Gmes menpe hekeâÌ[e pee
mekeâlee nw~ otmeje, mšeheâ
keâes Jemetueer kesâ efueS Yeer
Øesefjle efkeâÙee pee mekeâlee nw
Deewj $e+Ce keâes mšeheâ keâer
menYeeefielee mes SveheerS
nesves mes yeÛeeÙee pee
mekeâlee nw~
54 DeeFyeerS yeguesefšve
Deiemle 2005
Dele:, Deepe kesâ «eenkeâesvcegKeer yeepeej ceW «eenkeâ keâer Dehes#eeDeeW
keâes hetje keâjles ngS Deewj $e+Ce GlheeoeW keâer iegCeJeòee keâes yeÌ{eles
ngS ceevekeâ DeeefmleÙeeW keâes yesnlej ØeyebOeve Éeje Devepe&keâ DeeefmleÙeeW
ceW peeves mes jeskeâe pee mekeâlee nw~
ceevekeâ DeeefmleÙeeW keâes ceevekeâ DeeefmleÙeeb yeveeÙes jKevee efveleeble
DeeJeMÙekeâ nw, DevÙeLee Ùes Devepe&keâ DeeefmleÙeeW ceW yeouekeâj iebYeerj
¤he ues uesleer nQ~ Fmemes yeÛeves kesâ efueS yesnlej ØeyebOeve Éeje
Devepe&keâ DeeefmleÙeeW keâer Fme iebYeerj Ûegveewleer mes menpe Je meheâueleehetJe&keâ
efveheše pee mekeâlee nw~
ceevekeâ DeeefmleÙeeW keâes Devepe&keâ DeeefmleÙeeW ceW peeves mes jeskeâves kesâ
efvecveefueefKele oes efJekeâuhe nes mekeâles nQ :
(keâ) JÙeJemLee ceW heefjJele&ve Deewj
(Ke) mebØes<eCe ceW JÙeeJeneefjkeâlee
(keâ) JÙeJemLee ceW heefjJele&ve : ceevekeâ DeeefmleÙeeW keâer
Jemetueer yesnlej ØeyebOeve mes leLee JÙeJemLee ceW heefjJele&ve
keâjkesâ menpe SJeb efveÙeefcele yeveeÙeer pee mekeâleer nw
Deewj $e+Ce keâes Devepe&keâ nesves mes yeÛeeÙee pee
mekeâlee nw~
Ùes heefjJele&ve efvecveefueefKele nes mekeâles nQ :
$e+Ce osves ceW osjer ve keâjvee
omleeJes]peerkeâjCe keâe mejue nesvee
$e+Ce osves ceW mšeheâ keâer menYeeefielee yeÌ{evee
$e+Ce osves ceW osjer ve keâjvee : Ssmee osKee ieÙee nw efkeâ
$e+Ce osves Jeeuee (yeQkeâj) $e+Ceer keâes yeQkeâ kesâ Fleves DeveeJeMÙekeâ
Ûekeäkeâj keâšJeelee nw efkeâ $e+Ce uesves Jeeuee hejsMeeve nes peelee
nw Deewj Fmekeâe ØeYeeJe efveefMÛele ¤he mes $e+Ce Jemetueer hej
heÌ[lee nw~ Deepe kesâ heefjÂMÙe ceW $e+Ce osves ceW osjer veneR
keâjveer ÛeeefnS, efpememes $e+Ceer KegMeer ceve mes $e+Ce keâer
Ûegkeâewleer keâjlee jns~ Dele: yeQkeâjeW keâes Fme JÙeJemLee ceW
menÙeesie keâjvee ÛeeefnS~
omleeJes]peerkeâjCe keâe mejue ¤he ceW nesvee : yeQkeâeW ceW
$e+Ce keâe omleeJes]peerkeâjCe Skeâ peefšue Øeef›eâÙee nw efpevnW
hetje keâjves ceW yengle-meer hejsMeeveer Deeleer nw Deewj meceÙe keâer
yeyee&oer nesleer nw~ Dele: yeQkeâeW keâes $e+Ce osves kesâ omleeJes]pe Yeer
mejue Je mešerkeâ ¤he ceW yeveeves ÛeeefnS~ otmeje, Devepe&keâ
DeeefmleÙeeW keâer Jemetueer kesâ keâevetveer omleeJes]pe Yeer mejue Je
mešerkeâ neW, efpememes SveheerS Jemetueer keâe MeerIeÇ GheeÙe nes
mekesâ Deewj keâevetve keâer uebyeer Øeef›eâÙee mes yeÛee pee mekesâ~
$e+Ce osves ceW mšeheâ keâer menYeeefielee : JÙeJemLee ceW
heefjJele&ve keâe Ùen cegKÙe Debie nw efpemekesâ Éeje Devepe&keâ
Deeefmle keâes jeskeâe pee mekeâlee nw~ yeQkeâeW keâer MeeKeeDeeW ceW
Dekeämej osKeves keâes efceuelee nw efkeâ MeeKee ceW $e+Ce osves Jeeuee
›esâef[š ØeyebOekeâ Deheves Deehekeâes Denced mecePelee nw Ùeeefve
$e+Ce mebyebefOele efveCe&Ùe Gmekesâ mJeÙeb kesâ nesles nQ Deewj DevÙe
mšeheâ keâer menYeeefielee veieCÙe nesleer nw~ menÙeesie uesves keâer
pe¤jle ner veneR mecePeer peeleer~ Devepe&keâ nesves hej DevÙe
”
”ßeer efmebn yeQkeâ Dee@heâ yeÌ[ewoe, meerkeâjer Kego& MeeKee,
ieeef]peÙeeyeeo (G.Øe.) ceW keâeÙe&jle nQ~ efJe%eeve ceW
mveelekeâ ßeer efmebn ves meerSDeeF&DeeF&yeer keâer hejer#ee
Yeer GòeerCe& keâer nw~ Deeheves yeQkeâ keâer keâF& MeeKeeDeeW
ceW efJeefYevve keâeÙe& efkeâÙee nw~ Deeheves yeQefkebâie leLee
meeceeefpekeâ efJe<eÙeeW keâes keWâõ-eEyeog yeveekeâj keâF&
uesKe efueKes nQ~ efheÚues 7-8 Je<eeX ceW Deehekesâ
yeQefkebâie leLee DeeefLe&keâ efJe<eÙeeW hej efJeefYevve uesKe
ØekeâeefMele nes Ûegkesâ nQ~
yeQkeâ MeeKeeDeeW keâes meceÙe-meceÙe hej ieebJeeW ceW
Jemetueer keQâhe keâe DeeÙeespeve keâjvee ÛeeefnS Deewj
Ùen Jemetueer keQâhe leye ueieves ÛeeefnS peye
efkeâmeeveeW keâer heâmeue lewÙeej nes Deewj hewmee
efkeâmeeve kesâ neLe ceW Deeves ueies~ Ssmee keâjves mes
SveheerS Jemetueer keâes efveefMÛele ¤he mes Øeeslmeenve
efceuesiee~
55DeeFyeerS yeguesefšve
Deiemle 2005
mšeheâ keâer Ùeeo Deeleer nw efkeâ Gkeäle $e+Ceer kesâ
mebheke&â ceW efkeâmes Yespee peeS efpememes ØeYeeJeMeeueer
Jemetueer keâer peeÙes~
Dele: $e+Ce osves keâer JÙeJemLee ceW heefjJele&ve keâjkesâ mšeheâ
keâer menYeeefielee yeÌ{eveer ÛeeefnS keäÙeeWefkeâ mšeheâ keâer
efmeheâeefjMe hej efoÙee ieÙee $e+Ce keâYeer Yeer SveheerS veneR
nes mekeâlee~ $e+Ce osles meceÙe meYeer mšeheâ keâes ceeuetce
jns efkeâ DecegKe JÙeefkeäle keâes Decegkeâ $e+Ce efoÙee pee jne
nw~ Fmemes Deiej $e+Ceer ceW keâesF& keâceer nesleer nw lees Gmes
menpe hekeâÌ[e pee mekeâlee nw~ otmeje, mšeheâ keâes Jemetueer
kesâ efueS Yeer Øesefjle efkeâÙee pee mekeâlee nw Deewj $e+Ce keâes
mšeheâ keâer menYeeefielee mes SveheerS nesves mes yeÛeeÙee pee
mekeâlee nw~
(Ke) mebØes<eCe ceW JÙeeJeneefjkeâlee : mebØes<eCe Skeâ
Ssmee #es$e nw efpemekesâ Éeje $e+Ce Jemetueer Deewj SveheerS
Jemetueer keâes mejue Je megiece yeveeves ceW ceoo efceueleer nw~
Dele: mebØes<eCe keâer Yetefcekeâe keâes vekeâeje veneR pee mekeâlee
nw~ mebØes<eCe ceW JÙeeJeneefjkeâlee keâes Yeer leerve ¤heeW ceW
efJeYekeäle efkeâÙee pee mekeâlee nw :
$e+Cekeâlee& keâes Devegmceejkeâ he$e Yespevee :
yeQkeâeW keâes Deheveer MeeKee kesâ mlej hej efoÙes ieÙes
$e+Ce kesâ yeejs ceW $e+Ceer keâes meceÙe-meceÙe hej
Devegmceejkeâ he$e Yespevee ÛeeefnS efpememes $e+Ceer
keâes efkeâmle Ùeeo Deeleer jns Deewj meceÙe hej $e+Ce
Jemetueer nesleer jns~ SveheerS $e+Ce KeeleeW kesâ yeejs
ceW Yeer yeQkeâ MeeKee keâes meceÙe-meceÙe Jemetueer
veesefšme DeJeMÙe efvekeâeueveer ÛeeefnS~ Fmemes $e+Ceer
hej ceveesJew%eeefvekeâ ØeYeeJe heÌ[lee nw Deewj $e+Ce
Jemetueer Deeves keâer p]Ùeeoe Gcceero jnleer nw~ Dele:,
Ssmee he$eeÛeej mebheke&â efvejblej yevee jnvee ÛeeefnS~
JÙeefkeäleiele mebheke&â yeveevee : $e+Ce osves mes
henues SJeced $e+Ce osves kesâ yeeo yeQkeâ mšeheâ keâes
$e+Ceer kesâ mebheke&â ceW yevee jnvee ÛeeefnS~ Ùen yeQkeâ
keâer cegKÙe Øeef›eâÙee nw~ Fmemes JÙeefkeäle keâer henÛeeve
keâe helee Ûeuelee nw~ otmeje, JÙeefkeäleiele ØeYeeJe
mes $e+Ce Jemetueer mejue yeveeÙeer pee mekeâleer nw~
Dele:, yeQkeâ ØeyebOeve keâes $e+Ceer kesâ JÙeefkeäleiele
mebheke&â ceW efvejblej yevee jnvee ÛeeefnS efpememes
$e+Ce Jemetueer keâer yeeOee keâes jeskeâe pee mekeâlee nw~
Ùen Jemetueer keâe meMekeäle ceeOÙece ceevee ieÙee nw~
šsueerheâesve Éeje mebheke&â jKevee : Ùen mebheke&â
keâjves keâe leer›e Je meMekeäle Fueskeäš^e@efvekeâ ceeOÙece
nw~ yeQkeâ keâes $e+Ceer keâe heâesve vebyej jKevee ÛeeefnS
efpememes meceÙe hej legjble mebheke&â efkeâÙee pee mekesâ
Deewj $e+Ce Jemetueer kesâ efueS Øesefjle efkeâÙee pee
mekesâ Fme Øekeâej, $e+Ce keâes SveheerS nesves mes
yeÛeeÙee pee mekeâlee nw~
Deepe kesâ oewj ceW, yeQefkebâie GÅeesie keâer Devepe&keâ
DeeefmleÙeeb Skeâ iebYeerj Ûegveewleer nQ~ SveheerS yeQkeâeW
hej efvecveevegmeej oesnje ØeYeeJe [euelee nw :
(i) ceevekeâ DeeefmleÙeeW hej Øeehle nesves Jeeues Øeefleheâue
keâes keâce keâjlee nw~
(ii) yeQkeâeW keâer ueeYeØeolee keâes ØeYeeefJele keâjlee nw~
SveheerS mes leerve mlej ØeYeeefJele nesles nQ : (i) yeQkeâeW keâe
efJeòeerÙe DeeOeej (ii) ceevekeâ DeeefmleÙeeW keâe Øemeej, Deewj
(iii) osMe keâe DeeefLe&keâ efJekeâeme~
keäÙeeW neslee nw SveheerS?
Ùeneb SveheerS mecemÙee keâe efveoeve {tBÌ{ves mes henues Ùen
peevevee pe¤jer nw efkeâ ceevekeâ DeeefmleÙeeW keâes Devepe&keâ
DeeefmleÙeeW ceW yeoueves Jeeues keâejkeâ keäÙee nes mekeâles nQ~
Fmekesâ efvecveefueefKele keâejCe nes mekeâles nQ :
Yeü° lejerkeâe : mJeÙeb yeQkeâ DeefOekeâejer Éeje Yeü° lejerkeâe
Deheveekeâj Ùee jepeveereflekeâ ØeYeeJe ceW Deekeâj efoÙee ieÙee
$e+Ce SveheerS nesves keâe keâejCe yeve mekeâlee nw~
Øeeke=âeflekeâ keâejCe : Øeeke=âeflekeâ Deeheoe Deeves
hej yeQefkebâie $e+Ce SveheerS nes mekeâles nQ~
mJeÙeb $e+Ceer : $e+Ceer Éeje $e+Ce
jeefMe keâes Deheveer Iejsuet pe¤jleeW
ceW ueiee uesves mes $e+Ce SveheerS
nes mekeâlee nw~
mejkeâejer veere fleÙeeb :
mejkeâej Éeje meceÙe-
meceÙe hej $e+Ce ceeheâer
keâer Iees<eCee Ùee $e+Ce
Jemetueer keâes mLeefiele
keâjevee Deeefo Yeer $e+Ce
Jemetueer keâes ØeYeeefJele
keâjlee r nw pee s $e+Ce
SveheerS nesves keâe keâejCe
yevelee nw~
DeveeJeMÙekeâ osjer : $e+Ce
keâes SveheerS ceW yeoueves keâe
ØecegKe keâejCe DeveeJeMÙekeâ osjer
ceevee ieÙee nw efpemeceW yeQkeâj "erkeâ
meceÙe hej GefÛele $e+Ceer keâe ÛegveeJe veneR keâj heeles nQ,
efpememes «eenkeâ keâes yeQkeâ kesâ DeveeJeMÙekeâ Ûekeäkeâj ueieeves
heÌ[les nQ~ Dele:, yeeo ceW $e+Ce Jemetueer ceW hejsMeeveer keâe
keâejCe yevelee nw~
mebheke&â ve jKevee : ØeeÙe: osKee peelee nw efkeâ ØeyebOekeâ
$e+Ce osves kesâ yeeo $e+Ceer mes mebheke&â veneR jKe heeles nQ
Deewj ve ner meceÙe hej veesefšme Yespeles nQ efpememes $e+Ce
Jemetueer ØeYeeefJele nesleer nw Deewj $e+Ce SveheerS yevelee
nw~
mšeheâ keâer menYeeefielee ve yeveevee : ceevekeâ DeeefmleÙeeW
keâe Devepe&keâ DeeefmleÙeeW ceW yeoueves keâe ØecegKe keâejCe
mšeheâ keâer menYeeefielee ve yeveevee ceevee ieÙee nw~ ›esâef[š
DeefOekeâejer $e+Ce osles meceÙe efkeâmeer Yeer mšeheâ keâes mebheke&â ceW
veneR ueslee nw efpememes $e+Ceer kesâ yeejs ceW peevekeâejer DeOetjer
jnleer nw Ùee mšeheâ $e+Ce Jemetueer ceW efoueÛemheer veneR ueslee
nw Deewj $e+Ce SveheerS nes peelee nw~
Dele: keânvee GefÛele nesiee efkeâ keâneR-ve-keâneR ØeyebOeve ceW
keâceer jnleer nw efpememes ceevekeâ DeeefmleÙeeb neefvekeâejkeâ
DeeefmleÙeeW ceW heefjJeefle&le nes peeleer nQ~ Devepe&keâ DeeefmleÙeeW
keâer Jemetueer kesâ efueS efvecveefueefKele GheeÙe efkeâS pee
mekeâles nQ :
(keâ) MeeKee mlej hej Jemetueer FkeâeF& keâe ie"ve
(Ke) ØeefleYetefleÙeeW kesâ Øeefle mepeielee
(keâ) MeeKee mlej hej Jemetueer FkeâeF& keâe ie"ve :
SveheerS Jemetueer kesâ efueS yeQkeâeW Éeje MeeKee mlej hej
Fme Øekeâej Jemetueer FkeâeF& yeveeÙeer pee mekeâleer nw :
MeeKee mlej hej Jemetueer keâ#e keâe ie"ve : $e+Ce osves
Jeeueer MeeKee kesâ mlej hej oes Ùee leerve mšeheâ keâe
ÛegveeJe keâjkesâ Skeâ mesue keâe ie"ve efkeâÙee peeS Deewj
meceÙe-meceÙe hej FmeceW mšeheâ meomÙeeW keâe heefjJele&ve
nesvee ÛeeefnS~ mesue ceW Skeâ ›esâef[š Dee@heâermej neslee nw
pees mesue keâe ØeYeejer Je mLeeÙeer meomÙe yevelee nw Deewj
otmejs meneÙekeâ keâce&Ûeejer pees DemLeeÙeer meomÙe nesles nQ~
mesue kesâ meomÙe SveheerS keâer Jemetueer kesâ efueS $e+Ceer kesâ
heeme peeSbies~ Fme Øekeâej keâer Øeef›eâÙee mes efveefMÛele ner
SveheerS Jemetueer hej mekeâejelcekeâ ØeYeeJe heÌ[lee nw~
MeeKee mlej hej Jemetueer SpeWš keâer efveÙegefkeäle : osKee
ieÙee nw efkeâ ØeeFJesš efJeòeerÙe mebmLeeSb oyebie ueesieeW Éeje
Deheves $e+CeeW keâer Jemetueer keâjeleer nQ~ FmeceW $e+Ce Jemetueer
100 ØeefleMele nesleer nw~ Fmeer Øekeâej, yeQkeâeW keâes Yeer
Deheves MeeKee kesâ mlej hej efkeâmeer Jemetueer SpeWš keâer
efveÙegefkeäle keâjveer ÛeeefnS~ yeQkeâ Fvekesâ SJepe ceW Jemetueer
keâe oes Ùee leerve ØeefleMele keâceerMeve os mekeâles nQ~
MeeKee mlej hej Jemetueer keQâhe keâe ie"ve : yeQkeâ MeeKeeDeeW
keâes meceÙe-meceÙe hej ieebJeeW ceW Jemetueer keQâhe keâe DeeÙeespeve
keâjvee ÛeeefnS Deewj Ùen Jemetueer keQâhe leye ueieves ÛeeefnS
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57IBA BULLETINAUGUST 2005
COMMUNICATION@IBA
Some of the event highlights were :◆ Shri S.C. Basu, Chairman &
Managing Director - Bank ofMaharashtra; Deputy Chairman -Indian Banks’ Association was thePresiding Host; Shri V. Leeladhar,Deputy Governor - Reserve Bankof India was the Chief Guest andShri Rajiv Vaishnav, RegionalDirector - NASSCOM was Master ofCeremonies.
◆ Keynote Session by Shri A.N. Roy,Commissioner of Police - GreaterMumbai.
◆ Interactive and Educative sessionson IT Security, Anti MoneyLaundering, Financial Crime &Fraud.
◆ Key Speakers presenting were :
IBA-TFCI jointly organized a conference ‘BANKING SECURITY 2005’on June 22, 2005 at Mumbai. The Conference brought together all the facetsof banking security for frank and meaningful discussions, learning andstrategizing to ensure the industry’s Collective Security future.
Shri Dirk Mohrmann, President -WorldCompliance; Shri MatthewSyme, Product Marketing Manager- Nortel Security Solutions;Shri Neeraj Dotel, Industry Manager(Financial Services) - Microsoft India;Shri Sujan Pandit, ProgramManager - CIANT; Shri Vineet Mittal,Practice Head (Enterprise) WebServices & Identity ManagementPractice) - Sun Microsystems, Indiaand Shri Vivek Gupta, SecurityConsultant - IBM Global Services.
◆ Other Industry & Sponsor Speakerswere : Shri D.V.S. Prakash, AVP(Product Manager) - FinancialSoftware and Systems; Shri G.N.Nagaraj, Director (Sales) - OnwardNovell; Shri Hanuman Tripathi,
Chief Guest Shri V. Leeladhar, Dy. Governor, Reserve Bank of India lighting the lamp and inaugurating the Seminar, flanked by (L-R)Shri Balmohan Tarakad, President & ED-TFCI, Shri A.N. Roy, Commissioner of Police, Greater Mumbai, Shri S.C. Basu, Dy. Chairman,
IBA & CMD, Bank of Maharashtra.
Managing Director - InfraSoftTechnologies; Shri John Hele, GlobalProduct Head - BSI ManagementSystems and Shri S. ShankarNarayanan, Head (InformationSecurity Practice) - 3D Networks.
◆ Locknote Panel Discussion on ‘‘CyberCrime, Security & Compliance : It’s issuesand the future for the Banking Industy’’by Shri Nandkumar Saravade,Director (Cyber Security & Compliance)- NASSCOM; Shri Satish Warrier, Head(Information Security) - IDBI Ltd.;Shri Srivalsan Ponnachath, Director(Financial Services) - Sun Microsystemsand Shri Venugopal R. Iyenagar,Practice Director (eSecurityCompetancy and Consulting Services)TCS.
(Links to these events are available at www.iba.org.in)
58 IBA BULLETINAUGUST 2005
58 IBA BULLETINAUGUST 2005
FINANCE MINISTER’S MEETING WITH CEs OFPUBLIC SECTOR BANKS - 3rd June, 2005
Shri P Chidambaram, Hon’ble Union Minister of Finance took a review meeting of the Chief Executives of Public Sector Banks and FIs onthe 3rd June, 2005 at New Delhi. The key issues addressed by the Finance Minister in the meeting relate to performance of the PSBs on theflow of credit to agriculture, Rural Housing, Educational Loan Scheme, Flow of Credit to Small and Medium Enterprises, Performance ofRegional Rural Banks, Debt Recovery Tribunals (DRTs), Convergence in the Banking Industry, NPA Recovery, Human Resources Development,Consolidation of PSBs and Review of Managerial Autonomy.
At the sequel to discussions of the meeting, the Banking Division, Ministry of Finance has sought banks specific action reports on the followingissues:Recovery of NPAs : Banks having net NPA in excess of 5 percent were directed to take measures to reduce the NPA Level within a definitetime frame.Consolidation of PSBs : CEOs were advised that before considering any proposal, the unions might be suitably sensitized on the need andadvantages of consolidation.Review of Managerial Autonomy : The Government would focus its role to the four main areas viz., (i) Nationally important policies;(ii) Uniform Standards of Corporate Governance; (iii) Appointment of CMDs/EDs; (iv) Performance measurement, monitoring and discipline.Banks would be required to sign MOU with the Government for the above purpose.
Shri P. Chidambaram, Hon’ble Finance Minister (2nd from left) chaired the meeting. Shri Vinod Rai, Addl. Secretary,DEA (BD) [to his right] ; [to his left] Shri V. Leeladhar, DG, RBI; Shri A.K. Purwar, Chairman IBA and Chairman SBI;Shri V.P. Shetty, Chairman IDBI Ltd. and Shri S.C. Basu, CMD, Bank of Maharashtra.
Meeting in Progress
59IBA BULLETINAUGUST 2005
FAREWELL TO EX-MANAGING COMMITTEE MEMBERS
Shri A.K. Purwar Chairman, IBA presenting bouquets to Dr. Dalbir Singh (L) and Shri M.Y. Khan (R)
Shri V.P. Shetty, (right) Chairman, IDBI Ltd wishes Shri M.Y. Khan
22nd July, 2005 Mumbai
Shri K.V. Kamath, MD & CEO, ICICI Bank (right), felicitating Dr. Dalbir Singh
Standing ovation to Dr. Dalbir Singh and Shri M.Y. Khan by theManaging Committee Members / Chief Executives
IBA had arranged a felicitation function on July 22, 2005 at Mumbai
for Dr. Dalbir Singh, former CMD, Central Bank of India and
Shri M.Y. Khan, Ex-Chairman & CEO, Jammu and Kashmir Bank Ltd.,
who were also members of the Managing Committee of the
Association Dr. Dalbir Singh was also Chairman, IBA during 2001 to
2003. Many Chief Executives/Top Executives from the Member Banks/
Financial Institutions graced the occasion.
Dr. Dalbir Singh Mr. M. Y. Khan
60 IBA BULLETINAUGUST 2005
As a part of leadership programme, the Association launched the Power Breakfast Series for CEOs/MDs/EDs/DMDs in which variousstrategic issues will be discussed. The first programme of the series was held on July 23, 2005 at Hotel Taj President, Mumbai. The topic ofthe programme was ” The Indian Bank CEO’s Agenda”. The thought speakers were David Rhodes, Senior Vice President & Director, CarlosTrascasa, Senior Vice President & Director and Andrew Dyer, Vice President & Director of The Boston Consulting Group.
Chief Executive/Top Executives from member banks/financial institutions had attended the programme.
23rd July, 2005 Mumbai
Speakers on the dias (L - R) Mr. Andrew Dyer (BCG), Mr. David Rhodes (BCG),
Mr. Janma Jaya Sinha (BCG), Mr. H. N. Sinor (IBA) and Mr. Carlos Trascasa (BCG)
Mr. Andrew DyerMr. Carlos TrascasaMr. David RhodesMr. Janma Jaya Sinha
SR. NO. DATE CENTRE ORGANISERS TOPIC
1. 19/8/05 Mumbai IBA - BCG Power Breakfast Series(Investor Communications andBoard Management)
2. 23/8/05 Mumbai IBA - KPMG Basel-II Norms3. 27/8/05 Mumbai IBA Annual General Meeting4. 30/8/05 Mumbai IBA - Logica CMG ANTI MONEY Laundering
IBA’s Forthcoming Events
Indian Banks’ Association
In Association WithTHE BOSTON CONSULTING GROUP
1. Banking and Money : All Scheduled Commercial Banks
(Rs. in crore)
Outstanding on % Variation over
June 24, June 25, Last Last End
2005 2004 Month Year March
(25-03-2005)
Aggregate Deposit 1789864 1559933 0.65 14.74 4.76
1. Demand 260112 212553 2.84 22.38 2.052. Time 1529751 1347380 0.28 13.54 5.23
Bank Credit 1161387 877408 1.52 32.37 6.35
1. Food 44804 43061 -2.02 4.05 7.82
2. Non-Food 1116583 834347 1.66 33.83 6.30
Cash in Hand 9730 8523 3.19 14.16 11.37Balance with RBI 95986 78388 7.12 22.45 -12.82
Investment 740078 717408 -1.34 3.16 2.49
Money Supply as on
M3 (a+b+c+d) 2359789 2076750 0.57 13.63 4.17
a. Currency with Public 375439 329836 -0.55 13.83 5.03
b. Dem. Dep. with Banks 295417 243425 3.15 21.36 0.08
c. Time Dep. with Banks 1684012 1499949 0.35 12.27 4.77d. Other Dep. with RBI 4920 3541 1373 38.94 -7.48
2. Price % Variation over
2005 2004 Month Year
WPI : 1993-94 =100 (June) 192.9 183.7 0.42 5.01
CPI : 1982 =100 (May) 527 508 -0.38 3.74
3. Bullion As on A year ago
(30-06-2005) (30-06-2004)
Standard Gold (Rs. per 10 gms.)* 6220 5985Silver (Rs. per Kg.)* 10755 9590* Closing price at Mumbai
4. Crude Oil (US $ per Barrel) As on A year ago
(30-06-2005) (30-06-2004)
North Sea Brent 55.80 33.32
5. Forex Reserves As on A year ago
(Including Gold & SDR) (24-06-2005) (25-06-2004)
Rs. in crore 605060 547939
US $ million 138890 119407
6. Bank Rate Per cent Effective
1. Bank Rate 6.00 29-04-2003
2. IDBI Minimum Term Lending Rate 10.25 30-01-2004
7. Deposit Rates
A. Term Deposits w.e.f. 01-11-2004
7 days and above deregulated
B. Saving w.e.f. 01-03-2003 3.5% per annum
8. Lending Rates per annum w.e.f. 29-04-1998
Amount Per cent
i) Upto Rs. 2,00,000/- Not exceeding PLR
ii) Over Rs. 2,00,000/- Banks to fix
9. Ratios Per cent
1. CRR 5.00 02-10-2004 @
2. SLR 25.00 22-10-1997 @
3. Cash Deposit Ratio 5.91 24-06-2005 #
4. Investment Deposit Ratio 41.35 24-06-2005 #
5. Credit Deposit Ratio 64.89 24-06-2005 #
(@) w.e.f.
(#) as on
10. Foreign Exchange Rates as on 24-06-2005
US$ Euro∈ 100¥ Stg‡
Buying 43.5550 52.3925 39.9450 79.1050
Selling 43.5650 52.4225 39.9650 79.1350
FEDAI Indicative Rates (spot) (Rs. per unit of foreign currency)
11. DFHI Rates as on
Discount/Rediscount Per cent p. a.
Rate for
Bid Offer
Treasury Bills – –
Commercial Bills – –
Certificate of Deposit – –
Commercial Paper – –
Call Money Rates as on 24-06-2005 5.70% to 5.90% –
12. Prime Lending Rates as on 26-06-2005 (% p. a.)
US CANADA ECB JAPAN SWISS BRITAIN HONGKONG
6.00 4.250 2.000 1.375 2.590 4.750 6.000
(As lending practices vary widely by location, these rates are not comparable).
Sources: 1, 5, 6, 9 - RBI Weekly Supplement.
2 - RBI Weekly Supplement, CMIE, Mumbai, 3, 4 & 11 The Economic Times.
7, 8, 10 - RBI.
12 - The Asian Wall Street Journal.
StatisticsR
egistered with the R
egistrar of New
spaper under Reg. N
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31661/78, Postal R
eg. No. Tech/47-1345/M
BI/2003-05,
Licenced To P
ost without pre-paym
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TOTAL DEPOSITS OF SCHEDULED COMMERCIAL BANKS -MARCH 2004
0
500000
1000000
1500000
2000000
All-
Ind
ia
Met
ro-
po
litan
Urb
an
Sem
i-U
rban
Rura
l13
8760
1950
81
1206
51
2682
16
9957
1 3302
95
9817
671
7679
4571
58
1511
273
No. of Accounts in Thousands
Amount in Rupees Crore
Source : RBI