July - September 2015

Driven on the Path of Progress

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42-43The Gujarat State Cooperative Bank Ltd, Ahmedabad, is the apex bank in the structure of rural cooperative banking in the State, District Central Cooperative Banks (DCCBs) at the district level and Primary Agricultural Credit Societies (PACS) at the village level. A sneak peek into how the Bank has managed to survive amid the wave of reforms and neck-and-neck competition

The Gujarat State Cooperative Bank Ltd, Ahmedabad, is the scheduled apex bank for the three tier cooperative credit structure in the State of Gujarat. The Bank was established on May 1, 1960 and has successfully completed 56 years of its existence. It plays a leading role in the agricultural and rural development through its cooperative structure, providing agricultural credit to the farmers for the farm related activities as well as its allied activities in short and medium term period.

There are 18 district central cooperative banks (DCCBs) in Gujarat working with nearly 1200 branches and are affiliated to the GSC Bank Ltd. Further, there are nearly 8,100 primary agricultural credit societies (PACS) affiliated to the DCCBs. The flow of the agricultural credit is from the apex level through the DCCBs and PACS to the borrowers – the farmers.

Board of Directors

The Bank has a 28-member elected Board of Directors. The Board consists of representatives from affiliated DCCBs, Urban Cooperative Banks (UCBs), Land Development Bank, Marketing Federation, Industrial Cooperative Societies, Professional Directors and representatives from the State Government and NABARD.

The Bank has made great progress in cementing its financial base. It has achieved enormous growth in the last five years. The deposits have touched an all time high of ₹ 6,900cr, which speaks of the trust and confidence of the depositors. The ₹ 5,029cr advances of the Bank, as on 31-03-2014, has increased to ₹ 5,921.99cr as on 31-03-2015  of which nearly 74 per cent was provided as refinance for agricultural and allied activities under the short and medium-term period to the affiliated DCCBs for on-lending to the farmers. The major portion of the investment of ₹ 4,921.92cr of the Bank is invested in Government securities and Fixed Deposits with the nationalised banks. The Bank maintained its Capital to Risk-weighted Assets Ratio (CRAR) above the criteria fixed by RBI, which speaks of the financial strength and soundness of the bank. The bank has been earning net profits and has been paying regular dividend to its shareholders.

Agricultural Loans

The Bank provides refinance to its affiliated DCCBs obtained either from the refinancing agency NABARD or from its own funds. The farmers are provided short-term agricultural crop loan facilities through Kisan Credit Card (KCC) by the DCCBs/PACS. These crop loans are gen – erally for a period of 12 months. There are more than 28 lakh farmers of Gujarat availing agricultural crop loans at an interest rate of seven per cent.

Besides, agricultural term loans are provided to the farmers for digging wells, deepening of wells, bore wells, irrigation facilities, drip irrigation, tractor purchasing, horticulture, floriculture, dairy development for buying cows/buffaloes, construction of go down for storage facilities, marketing yard, cold storage, green house, poultry farm, etc.

The GSC Bank Ltd also grants loans and advances for the non-agricultural activities. It granted loans and advances for working capital requirements as well as for term loans to FCI, Gujarat Narmada Valley Fertilizers Ltd, sugar industries, marketing yards etc.

Branch & Retail Banking

RBI has adopted a policy of extending banking services to every nook and corner of the country and is now permitting establishment of new private sector banks as well as existing banks to open new branches. This will create greater competition and better services for the customers. The Board of Directors of the Bank with its foresight and vision has always been inclined to think that to face aggressive competition from other banks, the GSC Bank Ltd has to change its strategy and enter into retail banking by opening branches. So, it has opened nine ultra-modern branches in the first phase in Ahmedabad. All the branches are work – ing on Core Banking Solution (CBS) platform offering wide range of services like RTGS, NEFT, CTS, RuPay ATM cum Debit Card, Internet Banking, IMPS payment services, SMS alerts, CSGL, safe deposit lockers and ATM services. It will also introduce Mobile Banking soon.

Besides this, the Bank also offers various retails loans to the individuals like vehicle loans, housing loans, education loans, consumer loans, mortgage loans, loans against NSC/KVP/LIC, working capital for business etc. on very liberal terms and at a competitive rate of interest.

Information Technology

In order to face the challenges posed due to the adoption of technology-led services by the commercial banks, it became imperative on the part of GSC Bank Ltd and its affiliated 18 DCCBs to transform its working and migrate to CBS platform, and offer new age services.

The Bank has been conferred with special awards from National Federation of State Cooperative Banks Ltd., Mumbai, from 2007-08 till 2012-13 for the best overall performance, corporate governance, resources development and profitability. It has also received award from the National Cooperative Union, New Delhi, for the Best Performing Cooperative organisation.

The bank initiated a leading role to facilitate the implementation of CBS platform for the Bank as well as for its affiliated district banks. IT has invested heavily in building up the basic infrastructure like computers, servers and other related machinery for the CBS platform. The Bank has also established a computer lab with a view to train and upgrade employees’ IT awareness and skill.

Support to DCCBs

The GSC Bank Ltd being the central financing agency acts as a lender of last resort for the DCCBs of Gujarat. The development roles played by the Bank are:

• It has obtained a sum of ₹ 4,500cr as refinance from NABARD and provided the same to the DCCBs during 2014-15 in order to meet their lending programme needs.

• It has also sanctioned an amount of ₹990cr from its own funds to the DCCBs during the year 2014-15.

• It has played an important role in obtaining the banking licences for all the DCCBs of Gujarat as per the instructions of RBI.

• Panchmahal District Cooperative Bank Ltd, Godhra, resumed its normal banking business after RBI withdrew its restrictions imposed under Section 35(A) following vigorous follow-up by the GSC Bank Ltd.

• The Bank had executed an MoU with Tata Consultancy Services and NABARD for the CBS programme, which has been successfully implemented, bringing all the DCCBs to the CBS platform.

• In order to enable the DCCBs to recover their over dues and stagnated dues and reduce their non performing assets (NPA), the Bank had introduced ‘One Time Settlement’ scheme. The OTS scheme has immensely helped the DCCBs in improving their financial position.

• The Bank had played a vital role in implementing the Rural Go down Scheme with the active support of the Government of Gujarat and NABARD for construction of 1,022 rural go downs by PACS in Gujarat in order to enable the farmers for storage of their agriculture produce and helping them from distress selling.

• It has been helping the DCCBs in the implementation of the various schemes of the Government of India/ Gujarat/NABARD for boosting agricultural activities like dairy, poultry, horticulture, floriculture, green house, farm mechanisation, irrigation facilities, etc.

• Savings accounts opened under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) by all DCCBs working on CBS programme.

• The Bank regularly conducts training programmes for the employees of the DCCBs with a view to increase the knowledge and efficiency. Similarly, Khedut Shibirs are held in association with the DCCBs for the benefit of the farming community, where they are given useful information.

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