Current Events
Press Briefing on January 18th 2008, by Hon’ble Minister for Agriculture and Cooperatives Jenab Abdul Aziz Zargar on working and Revival of Cooperative Banks and other Credit Institutions in J&K, State.
Ladies and Gentleman :
- The J&K State has the nine Cooperative Banks working with focus on promotion of Agriculture and Horticulture and other economically important areas of the State. These Banks are:
1. J&K, State Cooperative Bank.
2. Baramulla CC Bank.
3. Anantnag CC Bank.
4. Jammu CC Bank.
5. J&K SCARDB.
6. Citizens Cooperative Bank Ltd; Jammu.
7. Urban Cooperative Bank Ltd; Anantnag.
8. Kashmir Mercantile Cooperative Bank Ltd; Sopre.
9. Devika Urban Coop Bank Ltd; Udhampur.
- Out of these Banks 4 (S.No. 1-4) are working for providing Short Term Agriculture Credit and allied lending in the State, whereas, other 4 Banks (S.NO. 6-9) are working in the Urban set-up and providing services to their members in the non-farming sector. One Bank (J&K SCARDB) is purely committed to long Term Agriculture lending in the State.
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The Cooperative Banks with a business turnover of Rs. 20 Billion, are operating in the entire State with a network of 203 Branches having 1730 employees. The key financial figures of these banks are summarized in the following table:
(Position as on 31/3/2007) (Amt. In Crores)
|
Deposits |
1496.99 |
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Loans outstanding |
488.49 |
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NPAs |
145.77 |
|
Cost of Management |
33.15 |
- The Cooperative Banks in the State have issued over 52 Lac KCCs valuing Rs. 64.39 Crs, besides being front runners in providing the services under Crop Insurance Scheme.
- In the recent past, Cooperative Banks have extended One Time Settlement (OTS) Scheme for adjusting the chronic NPAs and have recovered in this manner over Rs. 54.00 Crs. from various loanees numbering 2746.
- The deposits in the last 5 years have increased from Rs. 1118 Crs l in 2002-03 to Rs. 1496 Crs. thus registering and increase of Rs. 378 Crs in deposit mobilization.
- The advances from Cooperative Banks have registered growth of Rs. 430 Crs . to Rs. 627 Crs during the last 5 years, Baramulla CC Bank alone has recorded the growth in advances by over 25% during 2006-07.
- The CD Ratio on an average is 45-48% and here again one of our Cooperative Banks i.e Baramulla CC Bank has CD Ratio of 64.74 %, which is highest for any Bank in the J&K State.
- The recovery during the last 5 years has gone up significantly by launching of One Time Settlement Scheme , as mentioned above, over Rs. 54.00 Cr was recovered, thus significantly reducing percentage of chronic NPAs.
- The Primary Agricultural Cooperative Societies, (PACS) are the grass root level institutions and form the base of the Cooperative Credit Structure in the State. The total number of PACS in the State is 766 which includes 236 from Kashmir, 159 from Ladakh and, 371 Jammu Division.
- 210 number of PACS, are involved in Micro Credit Business to their farmer members. The Volume of this credit through PACS was Rs. 4. 35 Crs in 2003 which has touched 12.71 Cr during 2006-07. It is expected that all the PACS shall be providing the Micro Credit to the Farmers in the coming years.
- One of the success stories in Micro Credit has been the excellent work of MPCS Payeen Brengh of Kokernag, which has done a Micro Credit Business of Rs. 53.00 lacs during the current financial year. MICROSOFT has selected this Pry. Agriculture Credit Society as the success story on its official website, as the total working of this Cooperative has been fully automated using modern computers in day to day work.
- I would like to share the individual working parameters of the Banks and PACS of the last 5 years in this august Press Briefing.
Women Credit Cooperatives:
- Two Women Credit Cooperatives have been established at Jammu and Srinagar with a membership of over 1100 (700 in Kashmir and 400 in Jammu). The paid up share capital of both these institutions is Rs. 11.00 lac. Both the credit Cooperatives have started their business and it is expected that with the increase in their share capital, the two institutions shall take the shape of two exclusive Women Cooperative Banks of the State.
- Important Announcement for Revival of Cooperative Banks and the Primary Cooperative Societies:
- It gives me immense pleasure in announcing that the J&K Govt. has accepted the Prof. Vaidaynathan Committee Report for Recaptalization of Cooperative Credit Institutions. The State Cabinet in its last meeting presided over by Jenab Ghulam Nabi Azad , Hon’ble Chief Minister of J&K has approved its implementation.
- The impact of this package shall be that our 4 Cooperative Banks involved in Short Term Credit and the Primary Agricultural Credit Cooperative Societies (PACS) shall be receiving approximately Rs. 248 Cr. under this Recaptalization Package. However, the exact figures for individual Banks/PACS shall be worked out through a Special Audit which has to be conducted by the NABARD as prescribed by the Govt. of India.
Areas of Eligibility Purposes for recapitalization (Financial Assistance) CCIs:
- Non repayment of Agriculture loans and other allied business.
- Non repayment of loans from individuals for other purposes like consumer, housing etc.
- Losses on account of Non Credit business like public distribution system, procurement of food grains undertaken on behalf of Govt., sale of fertilizers and other agricultural inputs.
- Non repayment of loans issued under Govt. guarantee, where the State Govt. has not paid as yet, although guarantee invoked or un invoked. Non payment of dues from Govt. on account of waivers or subsidies announced.
- All tiers in Short Term Cooperative Banking are eligible for Recaptalization without any condition.
- All PACS with a recovery level of 30% of the demand as on 30th June 2004 will qualify for being covered under the Revival Package (Recapitalization) and to receive financial assistance.
- PACS with recovery levels of less than 30%, the State Govt.’s to determine the future of such PACS.
- Re- capitalization will be full in one go for the PACS with recovery levels of 50% and above.
- PACS with recovery levels between 30% to 50% will receive financial assistance in three annual back ended installments at the beginning of each succeeding year.
- PACS achieving 50% recovery target the entire recapitalization assistance will be released without waiting for the year to year recovery bench marks.
- The sharing pattern of this package shall be 68% (Rs. 149 Cr.) by Govt. of India, 28% (Rs. 61.69 Cr.) by State Govt. and 4 % (Rs. 8.81 Cr.) to be borne by respective Institutions.
- Ladies and Gentleman, this is a historical decision when the Cooperative Banks and the PACS shall be compensated for their lost capital assets since their inception through this Recaptalization package. But this is not a waiver for any defaulted loans, instead, the institutions are bound to initiate an intense recovery drive against the defaulters. Henceforth, our Cooperative Banks shall be in the finest state of health and shall be competing with other public sector and commercial Banks.
- The Jammu CC Bank and the Anantnag CC Bank shall come out of the present watchlist under Section 11 of the Banking Regulations Act 1949 (AACS).
- All the Cooperative Banks shall be eligible for low cost refinance from NABARD, for further loaning in the agriculture and allied sectors.
- The NABARD has been designated as the implementation Agency by the Govt. of India we shall be shortly signing MOU with the NABARD in this behalf.
- This package also includes total computerization of all the branches of Cooperative Banks, including PACS. The advanced training of Human Resource working in the Cooperative Banks is also part of this package. 100% expenditure on this shall be borne by the Govt. of India.
- Apart from above financial dispositions , the State Govt. has also accepted to implement the package in totality including the amendments in our Cooperative Societies Act and Rules thereof.
- It is important to mention that my self and the Hon’ble Chief Minister has requested the Union Finance Minister Mr. P. Chidambaram to relax the eligibility criteria for PACS of the J&K State , so that the PACS having the recovery percentage of less than 30% are also brought under the Recaptalization package. 146 PACS from Kashmir and 289 PACS from Jammu have been left out of the package because of the eligibility criteria.
- We are also preparing to implement a similar package for Long Term Credit Structure which shall involve J&K SCARDB which requires Recaptalization of Rs. 43 Crs
I thank you for participating in this press briefing and welcome the queries if any on the issues highlighted above.
Abdul Aziz Zargar
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