1)BANK MANAGER
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(On the left side photo:'Head Office, Canara Bank, Banglore, Karnatak State, India.' While on the right side photo:'The Rural Dairy finance against Cattle.')
By Martanda Tammana
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Here is the Story of a Bank Manager who is just Posted to a Rural Branch of the Bank with no much background on Rural lending and Dairy schemes that are meant for being financed to the Small And poor farmers/agriculturists in the village by name Uppal very near to the City of Hyderabad, in Andhra Pradesh. Our Manager is being posted
there on Promotion from his urban background.

Bank Manager on taking charge of this Branch had Struggled for some time to understand the topography of the village and to explore potentiality and propose schemes for the welfare of the villages that too small farmers by getting subsidy from SFDA (Small Farmers Development Agency) 25% on Loan amount sanctioned for the Dairy Scheme with two milch animals to each farmer to eke their livelihood.

Manager had surveyed the entire village and Noted that the village had hardly 500houses besides another about 1000 huts With a human population of 5000 and animal population of about another 5000 both cattle and bullocks hardly producing about 50 litres of Milk and thus collecting and marketing 100 litres of Milk in the nearby city households by adding about another 50 litres of water and their other profession being raising paddy and Green Grass which is available in plenty on account of the city sewage water that is being flown through this village and the grass being transported in Bullock carts to the Chaddar Ghat in about 8 k.m.to Uppal.

Having seen and witnessing the plight of the poor Farmers, Manager had ventured and organized a Co-operative Milk Society in the village and sanctioned Dairy loans to about 50 Farmers in the initial stages @ Rs.2000/ per farmer for purchase of two High Breed animals Ie.Buffaloes which will yield about 3 to 4 litres of Milk per day (2 times a day) as against hardly available 1 to 1-1/2 litres from Desi local buffaloes. So with all jubilation he had arranged animals for the farmers by buying Cattle from the Cattle market through a Purchase committee vis.,BDO (Block Development Officer/Village Veterinary Hospital Doctor/Bank Manager/Farmers (Loanees).
All is well and everything went on well for the first four to six months period and milk collection in the village started improving from 50 litres to 100 to 150 litres over a period of six months and people started paying his loans back slowly. Subsequent to this first quarter/Half year period his real troubles started on account of his mounting arrears in loan accounts and farmers not conforming to the terms & conditions of loan repayments to the Bank. Bank Manager had become Bechara on account of poor recovery.
When Bank Manager started visiting the houses of the Defaulters of the loans, startling revelations came out during interviews and discussions with the farmers stating: Sir, you had given us Two Milk animals giving Four litres milk a Day and on our getting the animals home we find over a period that Only Two litres of Milk is being collected from these animals thus making us to pay your loan dues from out of our sale proceeds of other Grass and Milk in our houses. one farmer said that he had only 3-1/2 Animals in his house i.e.one Desi / one Dried up/ and one giving hardly one litre and when enquired about the ½ animal it was declared that it was pregnant carrying one calf in the womb which will deliver after a period of six months.
Then Bank Manager became panicky and Started scratching his head to know the reasons for this state of affairs and started visiting the local Veterinary Hospital to investigate into the real reasons and causes for poor Milk Yield and poor recovery of these loans. Over a period of one week of his sitting in the Village Veterinary Hospital
In the evenings after Business Hours, he had several clues eg.
1.Animals/Buffaloes purchased in the Shandy Cattle market in the morning hours giving 4 litres of milk are really Yieling just 2 to 2-1/2 litres and vendors mixes the previous night milk into the fodder that is given to the animals in the earlier night and with the result the real two & half litres milk will come as –4- litres milk in the Cattle market at the time of sale of these animals to the farmers.

2.Secondly, these animals are not fed properly on account of their poor financial conditions in the family and they leave their animals for grazing in to the neigbbors plots/lands and for want of good fodder or grass they either get dried up early giving only Dung and with no milk or die in some of the cases.

3.Thirdly, the vendors in the market bring pregnant animals for sale during which period it is next to impossible for the farmer buying animals to assess milk yield except beliving vendors words.

4.Fourthly, the Gestation in the case of Buffaloes is about 3 to 4 years for pregnancy unlike in Cows which will come into heat within one to one and half years and become pregnant & give calves.

With this background and analyzing matters with his Own wisdom and wit, Bank Manager had become wise over a period through experience and improved milk yield to 500 litres to Society.

1.This is a Live Story that had taken place during the years 1973-74.

2.Secondly, when Bank Manager went for recovery of loan instalments, the wise
Borrower reacted sharply as under: Quote:
"Your Buffaloe is not at all giving milk now a days.Hence you may take back your -
Buffaloe anytime, since it is not required for me any longer. This was his Buffaloe as long as it was in Milk and bacame the Buffloe of Bank Manager when it dried up on account of his poor maintenance and with poor feeding giving only a tumbler of Feed to it which is called a (TAVVA) in the villages.

3.With this, Bank Manager had become wise and developed inquisitiveness
to read some books which resulted into his articles and released papers on this subject.
eg:SELECTION OF HIGH BREED ANIMALS
ECONOMICS OF MILK PRODUCTION AND
IMPROVEMENTS TO BE BROUGHT IN THE
SCALES OF FINANCE (ADDING COST OF
TRANSPORTATION & FEED AND FODDER
FOR FIRST COUPLE OF MONTHS AFTER
DELIVERY & MEDICINES FOR ANIMALS -
ALL TO BE INCLUDED IN COST OF ANIMAL)
INCLUDING PREMIA FOR CATTLE INSURANCE.
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2)INDIAN BAKING
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Composition of Banking System
• SCHEDULED COMMERCIAL BANKS (SCBs)
– APP.80. BOTH INDIAN & FOREIGN
• REGIONAL RURAL BANKS (RRBs)
– APP.200. SPONSORED BY PUBLIC SECTOR BANKS
• CENTRAL CO-OPERATIVE BANKS
• PUBLIC SECTOR BANKS:
• -------------------
– RESERVE BANK OF INDIA (R.B.I- MUMBAI)
– STATE BANK OF INDIA & ITS 7 ASSOCIATE BANKS
– NATIONALISED BANKS ( 20- TWENTY ONLY)
– REGIONAL RURAL BANKS (RRBs) SPONSORED BY PSBs.

• PRIVATE SECTOR BANKS
• --------------------
– OLD GENERATION PRIVATE BANKS
– NEW GENERATION PRIVATE BANKS
– FOREIGN BANKS IN INDIA
– SCHEDULED CO-OPERATIVE BANKS
– NON-SCHEDULE BANKS.

• CO-OPERATIVE SECTOR BANK
• ------------------------
– STATE CO-OPERATIVE BANKS
– CENTRAL CO-OPERATIVE BANKS
– PRIMARY AGRL. CREDIT SOCIETIES
– LAND DEVELOPMENT BANKS
– URBAN CO-OPERATIVE BANKS
• STATE LAND DEVELOPMENT BANKS /LAND MORTGAGE/DEVT., BANKS

(APP.20. MOSTLY IN DIST. HEAD QUARTERS)
• NO.OF PRIMARY AGRL.CREDIT SOCIETIES
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– SPONSORED BY SCBs
– NATIONALISED BANKS ( 20- TWENTY ONLY)
– REGIONAL RURAL BANKS (RRBs) SPONSORED BY PSBs.


RESERVE BANK
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– Established on April 1, 1935 in accordance with the Provisions of the Reserve Bank of India Act, 1934 (Fully owned by Govt. of India since 1949)

• Preamble & Basic Functions of Reserve Bank of India:
“To regulate issue of Bank Notes and keeping
Of Reserves with a view to securing Monetary
Stability in India and to operate Currency and
Credit System of the country to its advantage.”

• Official Directors: Governor & not more than Four Deputy Governors.
• Non-Officials Directors:
– Nominated by Government: Ten Directors from Various Fields and one Government Official
• Others: Four Directors-One each from Local Boards.

Main Functions:
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• Formulates, implements and monitors the policies.
• Regulator and Supervisor of Financial System:
• Prescribes broad parameters of Banking operations within which country’s Banking system functions.
• Manager of the Foreign Exchange (FEAct 1999)
• Issuer of Currency in adequate quantity & coins.
• Developmental Role: Wide range of promotional functions including granting of licenses to Banks (DBOD)
• Banker to the Govt. of India: Performs Merchant banking functions through SEBI for the Central and State Governments & acts as their Banker.
• Banker’s Bank: Maintains Banker’s Accounts
• Governing body

• RBI Subsidiary
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– INDUSTRIAL DEVELOPMENT INDUSTRIAL FIANCE CORPORATION OF INDIA (IFCI)
– BANK OF INDIA (IDBI)
– INDUSTRIAL CREDIT & INVESTMENT CORPN.OF INDIA(ICICI)
– INDUSTRIAL INVESTMENT BANK OF INDIA (IIBI)
– SMALL INDUSTRIES DEVT. BANK OF INDIA (SIDBI)
– NATIONAL BANK FOR AGRICULTURE & RURAL DEVT.(NABARD)
– EXPORT IMPORT BANK OF INDIA (EXIM BANK)
– INDUSTRIAL RECONSTRUCTION BANK OF INDIA (IRBI)CALCUTTA
• SUBSIDIARIES:
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– NATIONAL HOUSING BANK (NHB)MUMBAI
– DEPOSIT INSURANCE & CREDIT GUARANTEE CORPORATION (DICGC)
– NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT ( NABARD) MUMBAI
• PROVIDES REFINANCE FOR ALL BANK LOANS
– EXPORT CREDIT & GUARANTEE CORPN(ECGC)
– SEBI (SECURITIES EXCHANGE BOARD OF INDIA
• TO REGULATE & MANAGE ALL PUBLIC ISSUES
• ALL PUBLIC ISSUES SHOULD GET APPROVAL OF SEBI –BEFORE GOING TO THE PUBLIC.
– INDUSTRIAL RECONSTRUCTION BANK (IRBI) OF INDIA (PROVIDE REFINANCE TO SICKUNITS
• RBI –functions through 22 of their Regional Offices spread to all-important State Capitals.

• RBI Has six Training Establishments:
– College of Agricultural Banking (CAB), Pune
– Banker’s Training College (BTC), Mumbai
– Reserve Bank Staff college (STC), Mumbai
– National Institute for Bank Management (NIBM)
– Indira Gandhi Institute for Devt. Research
• Institute for Research in Banking Technology
• Self regulatory organization
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• INDIAN BANKS ASSOCIATION (IBA) MUMBAI (ESTD.1946)
• FOREIGN EXCHANGE DEALERS ASSOCIATION OF INDIA (ESTABLISHED 1958) (BANKS TO ABIDE BY F.E.D.A. RULES
• List of Banks
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NATIONALIZED BANKS IN INDIA
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• ALLAHABAD BANK (Oldest Public Sector Bank in India)
• ANDHRA BANK (Estd. 20TH NOVEMBER, 1923)
• BANK OF BARODA (Estd. IN THE YEAR – 1908)
• BANK OF INDIA (Estd. 7TH SEPTEMBER, 1906)
• BANK OF MAHARASTRA (Estd. MUMBAI)
• CANARA BANK (Estd. IN THE YEAR 1906)
• CENTRAL BANK OF INDIA (Estd.IN YEAR 1911)
• CORPORATION BANK (Estd. IN SOUTH CANARA)
• DENA BANK (Estd. IN THE YEAR JULY,1969)
• INDIAN BANK (Estd. ON 15TH AUGUST, 1907)
• ORIENTAL BANK OF COMMERCE (Estd.1943) LAHORE
• PUNJAB & SIND BANK (Estd. IN THE YEAR 1908) PUNJAB
• PUNJAB NATIONAL BANK (Estd.IN THE YEAR 1908)
• SYNDICATE BANK (Estd. IN THE YEAR 1923) MANIPAL
• UNITED COMMERCIAL BANK (UCO)Estd.1936)CALCUTTA
• UNION BANK OF INDIA (UBI) (Estd. IN MUMBAI)
• UNITED BANK OF INDIA (UBI) (Estd. IN 1936)MUMBAI
• VIJAYA BANK (Estd. IN THE YEAR 1936) MANGALORE
SCHEDULED BANKS IN INDIA (PRIVATE SECTOR)
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• VYSYA BANK LTD., (NOW VYSYA ING BANK LTD)
• INDUSIND BANK LTD.,
• ICICI BANKING CORPON.LTD.,
• GLOBAL TRUST BANK LTD.,
• CENTURIAL BANK LTD.,
• BANK OF PUNJAB LIMITED (taken over by Centurian and then by HFDC)
• IDBI BANK LIMITED
• UTI Bank Ltd.
• HDFC Bank Ltd.
SCHEDULED FOREIGN BANKS IN INDIA
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• AMERICAN EXPRESS BANK LIMITED
• ANZ – GRINDLAYS BANK Plc
• BANK OF AMERICA NT & SA
• BANK OF TOKYO LIMITED
• BANQUC NATIONALE DE PARIS
• BARCLAYS BANK Plc
• CITI BANK N.C.
• DEUTSCHE BANK A.G.
• HONGKONG & SHANGHAI BANKING CORPN (HSBC)
• STANDARD CHARTERED BANK
• CHASE MANHATTAN BANK LTD.,
• DRESDNER BANK A.G
• Indian 5 year plan goal
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1st PLAN (1951-56)
• AGRICULTURE, COMMUNITY DEVT., COMMUNICATIONS & LAND REHABILITATION
• OUR LATE PRIME MINISTER SRI JAWAHARLAL NEHRU PRESENTED YEAR PLAN FIRST 5.

2NDPLAN (1956-61)
• HYDRO ELECTRIC PROJECTS, STEEL MILLS, PRODUCTION OF COAL & RAILWAY TRACK

3RD PLAN (1961-66)
• DEFENCE, PRICE STABILIZATION,BUILDING DAMS, CEMENT & FERTILIZER PLANTS,EDUCATION

4TH PLAN (1969-74)
• THIS TIME SMT.INDIRA GANDHI BECAME PRIME MINISTER & SHE NATIONALISED 19 BANKS.
• FUNDS RAISED FOR THE INDUSTRIALISATION WERE SPENT FOR INDO-PAK WAR IN 1971.

5TH PLAN (1974-79)
• EMPLOYMENT, POVERTY ALLEVIATION & JUSTICE FOR PEOPLE BELOW THE POVERTY LINE.
6TH PLAN (1980-85)
• INFORMATION TECHNOLOGY,NATIONAL HIGH WAY SYSTEM, TOURISM, ECONOMIC LIBERALIZATION, PRICE CONTROL, FAMILY PLANNING Etc
7TH PLAN (1985-89)
• IMPROVING PRODUCTIVITY IN INDUSTRY AGRICULTURE etc. BY UPGRADING TECHNOLOGY
8TH PLAN (1992-97)
• MODERNIZATION OF INDUSTRIES IS THE MAIN AND PRIME TARGET OF EIGHTH 5YEAR PLAN
9TH PLAN (1997-2002)
• AGRICULTURE, RURAL DEVELOPMENT, FOOD & NUTRITIONAL SECURITY, EMPOWERMENT OF WOMEN, ACCELERATING GROWTH RATES, AND PROVIDING BASIC REQUIREMENTS (e.g) HEALTH DRINKING WATER, SANITATION Etc.Etc.
10TH PLAN (2002-2007)
• REDUCTION OF POVERTY RATIO, AND INCREASE IN LITERACY RATES, REDUCTION IN INFANT MORTALITY RATE, ECONOMIC GROWTH INCREASE IN FOREST AND TREE COVER Etc.,
11TH PLAN (2007-2008)
• INCOME GENERATION, POVERTY ALLEVIATION, EDUCATION, HEALTH, AS WELL AS INFRASTRUCTURE, ENVIRONMENT Etc.,-
• Deposits
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• CURRENT ACCOUNT DEPOSITS
– Individual/Joint Accounts/Partnership, Private Limited Co, Public Limited Co)

• SAVINGS BANK DEPOSITS(Int.3.5%)
– Individual/Joint Accounts with Special instructions –Payable to Either or Survivor
– Savings accounts in names of Regd. Trusts
– Savings accounts for Registered Societies
– Savings accounts for Registered Unions

• MONTHLY RECURRING DEPOSIT
– For periods ranging from 12 mts/60 months
– carrying Fixed Deposit Rate of Interest from 4 percent to 10 percent as per scheme)
• NITYA NIDHI DEPOSITS/PIGMY TYPE)
– Daily collection deposits like Chit Funds-in select banks e.g. Canara/Syndicate Bank)

• FIXED TERM DEPOSIT SCHEMES
– From short term 45days/to 6Mths/1Year
– up to maximum 60 months period) with Interest rates ranging from 4% to 10%
– Including Senior Citizens (60+ years)

• KAMADHENU DEPOSIT SCHEMES
– From minimum 1 year to max. 5 years
– offering Higher Maturity value if interest
– not withdrawn on Qrly/H.Y.basis
• =========================================
• In some Banks like ICICI Bank and a few others, Interest is paid/credited on current account deposit
• Account also treating as a Term deposit by Automatic transfer of funds in C/A beyond Rs.10,000/ into another term deposit To attract and add Interest on such sums held with Banks.

• In any Long Term Deposit accounts opened in the Joint Names i.e. 2 or 2+1 Terms of payment should be specially and specifically mentioned in the application itself
• Example: Options
• Payable to Either or Survivor if the Deposit is held in the Joint Names
• Payable to No.1 only on Maturity or to the survivor in case of death of original depositor named One
• Special instructions in the case of Automatic Renewal Scheme with the then prevailing rates of interest.
• Specific standing instructions to the Bank for Transfer of interest on the
• Deposit in Monthly/Quarterly/Half Yearly basis
• Specific standing instructions for the Remittance of Monthly Pensions direct to the Depositor to his specific account Abroad in Dollar Currency/Pounds with Special request/authorization to Banks.
• Specific standing instructions for ECS (Electronic Clearing System –for Bills/ATMs
• New millennium
• Banks in the new millennium made rapid strides, widening their Net Work and develop new products as well As Services that would meet the emerging customer Needs –Through its various subsidiaries in most of the PSBanks viz:
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• CAN BANK FINANCIAL SERVICES LTD
• CAN BANK MUTUAL FUNDS
• CANFIN HOMES LIMITED
• CANBANK FACTORS LIMITED
• CANBANK VENTURE CAPITAL LTD.
• CANBANK COMPUTER SERVICES LTD
• GILT SECURITY TRADING LIMITED
• CANBANK INVESTMENT MANAGEMENT SERVICES LTD.,

• In addition to the above, a few Banks like Canara Bank have opened specialized Branches to cater to the specialized Trade & Industries including NRIs & Professionals & Agriculturists.
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• INDUSTRIAL FINANCE BRANCHES (For Corporate clients High Value Loans)
• HI-TECH AGRICULTURAL FIN.BRANCH (For Specialized High Value Loans)
• NON-RESIDENTS INDIANS SERVICES BR. (To cater to the NRI community outside India)
• PROFESSIONALS/PERSONAL BRANCHES (To cater to the Individual Professionals)
• FOREIGN EXCHANGE SERVICES BRANCH (Exclusively to deal with FE services)
• INSTALLATION OF HUNDRED ATMs IN ALL CAPITAL CITIES
(WRITER IS A FORMER DY GENERAL MANAGER OF CANARA BANK, WHICH IS ONE OF THE BIGEST GOVERNMENT OWNED BANKS IN INDIA)
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