AIBOC CIRCULAR NO. 105 DATED 16.12.2011

AIBOC issued its circular No. 105 dated 16.12.2011 on Govt. of India directive: rapid action plan special credit campaign 01.12.2011 to 15.12.2011. We are placing the same here for our readers.

CIRCULAR NO.105                                                                         DATE: 16.12.2011

TO ALL AFFILIATES/MEMBERS:

GOVERNMENT OF INDIA DIRECTIVE: RAPID ACTION PLAN SPECIAL CREDIT CAMPAIGN 01.12.2011 TO 15.12.2011

Ministry of Finance Government of India, during September, 2011, has advised all the Public Sector Banks to implement the captioned programme. The objective of the programme is that all the PSBs in their service area should cover all the uncovered labourers /farmers for extending credit facilities. Further, deadlines of 30.09.2011 and 15.12.2011 to complete the tasks have been set and Banks have been instructed to certify that they achieved the task allotted them, within the deadline etc.,

It is apparent that a task as huge as covering more than 50% of population for extending credits in few months when less than 50% population has been covered in the past 40 years after bank nationalised, is next to impossible.

We have therefore, addressed a communication to The Secretary, Financial Services, Government of India on 15.12.2011, copy of which is enclosed for your information. We have also endorsed a copy of the said letter to the Chairman, IBA for appropriate action. There in, we have brought out Bank officers’ constraints to complete the task entrusted to Banks, although they want to join hands with government in implementing inclusive growth.

Affiliates may please advise their members to exercise caution in implementing the said schemes. They should not to give wrong /false certificates to their controllers /Government Agencies as regards implementation of the scheme and completing the task within a deadline etc., They should guard against facing Disciplinary cases likely to result from out of lapses in implementing the said schemes  in a hasty manner.

Please treat the matter as urgent.

With greetings

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

No. 1454/375 /11                                                            Date: 16.12.2011

Shri. D.K. Mittal

Secretary, Department of Financial Services

Ministry of Finance, Government of India

3^rd Floor, Jeevan Deep Building, Parliament Street

New Delhi -110001

Dear Sir,

GOVERNMENT OF INDIA DIRECTIVE: RAPID ACTION PLAN SPECIAL CREDIT CAMPAIGN 01.12.2011 TO 15.12.2011

Please refer to your D.O. Letter No.1(14)2011-CP dated 21^st November, 2011 advising the Banks to start a special campaign from 1^st December to 15^th December, 2011 regarding lending in rural areas. The communication also contains the check list of action programmes. To achieve these tasks, dead lines like 30^th September, 2011 and 15^th December 2011 were imposed. In this connection we place here under our observations.

Ø  It is very pertinent to note that in the past 40 years after nationalization of banks more than 50% of the population has not been covered i.e. they do not have Banking facility.

Ø  To cover the remaining persons in few months  for their credit needs calls for a robust infrastructure and adequate man power. It is very much in your knowledge that due to the ill conceived idea of curtailing recruitment, in the past 15 years in the Banking Industry  till as recently as the year 2009. There is huge void between the new recruits and the senior staff. Even when Banks are trying to fast track the promotions there are no eligible candidates available. It is well known fact that all the Public Sector Banks are suffering from acute manpower shortage. When this being the position at branches, thrusting on them with huge  work targets with  unrealistic deadlines generate pressure leading to procedural lapses and irregularities, consequences of which will have to be shouldered by the Bank officers.

Ø  Many of the rural branches of the Banks are still single officer branches with an average of 6/7 branches in the service area. Therefore, it is totally impractical for the Branch Managers to visit every village in a week. Apart from this state government agencies are not cooperating and not complying with action plan laid down for them.  You will very kindly agree that under these circumstances the ambitious targets set in special campaign seem impossible.  However, branch managers are being pressurized in all the Banks to submit certificates as per action (iii) of your above cited communication so that Zonal Offices in turn can issue a certificate as per action (iV)

Ø  We strongly feel that, if branches are pressurized and false certificates are submitted by the Branch Managers under duress, the real purpose of special campaign for priority sector lending will be lost. Therefore, we suggest that the time limit for the campaign be suitably moderated after considering the circumstances, particularly shortage of staff in Banking Industry.  We also urge upon you to take necessary steps for compliance of action points meant for Government Agencies which will facilitate achieving the desired purpose.

Ø  Under the circumstances, it may not be possible for the Banks to meet the deadlines set for the tasks explained above. We, as representatives of officers in Public Sector Banks have been extending every support to the financial inclusion specially for uplifting of the poor and the downtrodden.

We look forward to you to moderate the task by implementing the same in stages keeping in view of the difficulties of Banks explained here-in above, and also to ensure that the benefits of the GOI initiatives reach the right beneficiaries, which is the objective of the scheme.

With greetings

Yours faithfully

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

Copy to:

The Chairman,

The Indian Banks’ Association,

World Trade Centre Complex,

Centre 1, 6^th Floor, Cuffe Parade,

MUMBAI – 400 005.

For information and necessary action please .