Chapter 5. Role of Central Bank of India. in the Development of Ahmednagar District

Transcription

1 Chapter 5 Role of Central Bank of India in the Development of Ahmednagar District 5.1 Introduction 5.2 Agricultural Sector Central Bank of India And Agriculture Sector Central Bank of India's Scheme for Agriculture Govt. Sponsored Programs, Implemented by Central Bank of India as Lead Bank to Agriculture Sector Agriculture Promotional and Development Program of NABARD District Credit Plan of Agriculture Sector in Ahmednagar District (Annual Credit Plan) Increase / Decrease in District Credit Plan of Agriculture Sector in Ahmednagar District Achievement of District Credit Plan of Agriculture Sector in Ahmednagar Central Bank of India's contribution in District Credit Plan of Ahmednagar District Central Bank of India's Credit Plan to Agriculture Sector Loan Distributed by Central Bank of India in Agriculture Sector in Ahmednagar Classification of CBI's Agriculture Sector Credit Plan Classification of CBI's Finance to Allied Activities Recovery Performance of CBI in Agriculture Sector Agriculture Sector Cropping Pattern of Ahmednagar District

2 Changes in Cropping Pattern of Ahmednagar District Reasons behind Changes in Cropping Pattern in Ahmednagar District Production of Major Crops in Ahmednagar District Production of Major Crops in Ahmednagar District in Year Activities Allied to Agriculture Dairy Activity in Ahmednagar District Role of CBI in Agriculture Development Development of Ahmednagar District 5.3. Business Sector Central Bank of India and Business Sector Central Bank of India's Schemes for Business Sector Government Sponsored Schemes implemented by Central Bank of India : District Credit Plan of Business Sector in Ahmednagar District Increase / Decrease in District Credit Plan of Business Sector in Ahmednagar District : Achievement of District Credit Plan Central Bank of India's Credit Plan to Business Sector Classification of CBI's Credit Plan to 'SSI' (NFS) Classification of CBI's Credit Plan to 'Trade & Other Priority' Loan Distributed by Central Bank of India in Business Sector Recovery Performance of Central Bank of India in Business Sector

3 Registered Factories and Employment in Ahmednagar District Large, Medium and Small Scale Industrial Units in Ahmednagar District Large Scale Industries and Employment MIDC wise Industrial Units Co-operative Industrial Estates and Employment Major Business Groups and Regular Workers Average no. of Workers per day in Different Factories Trading, Shops, Mercantile Institutes and Employment Employment in Hotels, Entertainment and Other Services Co-operative Sugar Industry and Employment Role of CBI in Business Sector Development Development of Ahmednagar District (Business Sector)

4 Chapter 5 Role of Central Bank of India in the Development of Ahmednagar District 5.1 Introduction : On July 19, 1969 the Indian Government has nationalized 14 large bank in the country with an aim to extend banks to reach the rural areas of the country and unorganized sector of the urban poor. Bank credit thereafter was to be channeled to various sectors of the economy through innovative credit schemes. The role of banks in the economic development of a country assumes significance due to the fact that they provide one of the essential inputs, namely, finance for the growth of various segments of the economy. Central Bank of India was established in 1911 and Ahmednagar district was allotted to Central Bank of India in Since 1969, Central Bank of India was working as 'Lead Bank' of the district. As a 'Lead Bank' and as 'Commercial Bank', Central Bank of India is performing important role in different segments of the district. Central Bank of India was financing to different sectors of economy. In this chapter, the role of Central Bank of India in development of agriculture sector and business sector of Ahmednagar district is studied.

5 As a 'Lead Bank', Central Bank of India is providing finance to agriculture and business sector. In agriculture sector, finance is given to agriculturists for crops, vehicles, agriculture activities (projects) and to agriculture allied activities. Business is an economic activity which includes production of goods and services and also distribution of those goods and services with the purpose of earning profit. Hence, in business activity, industry, trading and services activities are covered, which are financed by bank. 5.2 Agricultural Sector (Ahmednagar district) : Ahmednagar district is the largest district of Maharashtra. The district is basically village oriented with a powerful agrarian economy, it is but natural that the financial institutions set up for rural needs have a rural inclination. The commercial banks operating in the district have wide network of branches catering to the rural needs of district. "Geographical area of the district is sq. km. Agriculture geographical area is hector and net sown area is about hectors." 1 Out of which, more than 25 percent land is under canal and well irrigation and 75 percent land area is under rain area. Land not available for cultivation is hectors. " In Ahmednagar district, there are 6.8 lakh farming families, out of which percent farmers are having less than 2 ha land holding, percent farmers are having land-holding between 2-10 ha and 9.66 percent farmers have a land holding with more than 10 ha." 2 It means that maximum farmers have less land holding.

6 Two major projects viz. Mula and Bhandardara are main sources of irrigation in Ahmednagar district. Large part of the district is irrigated by canal water from above two and other three adjacent districts projects viz. Gangapur, Nasik, Ghod and Kukadi of Pune. The main cash crops of the district are sugarcane (Adsali, Suru, Rotten) and Cotton. There are three cropping seasons viz. kharip, rabbi and summer. In kharip season, mainly rain fed crops like Bajara, Hybrid Jowar, Cotton, Sunflower, Groundnuts, Soybean, Paddy, Moong etc. are grown. In Rabbi season crops like Jowar, Wheat, Gram, Vegetables etc. are grown. In summer season irrigated crops like Groundnut, Sunflower, Fodder crops are grown. But now-a-days, due to advanced irrigation techniques, fruit crops like Grapes, Sweet Lime, Pomegranate, Bor and Mango etc. are grown in Ahmednagar district. Dairy farming is an allied activity of agricultural sector. Ahmednagar district is one of the top district in respect of dairy farming and milk production. There are various milk processing plants in the district and packaged milk and milk products are sold all over the Maharashtra. Co-operative sector is the backbone of the agriculture sector of Ahmednagar district. As the district is village oriented and its agrarian economy was developed because of co-operative sector. Ahmednagar is a pioneer district in co-operative movement and in upliftment of sugarcane cultivators. Late Padmashree Dr. Vitthalrao Vikhe Patil has started the first co-operative sugar factory in the district at Pravaranagar during the year 1949, which was the first of

7 its kind in the Asian Continent. There are 18 co-operative sugar factories, 9310 co-operative societies, 1281 co-operative dairies societies and 4 fruit and vegetable co-operative societies providing impetus to rural economy. The co-operative sector in the Ahmednagar district is dealing with all types of needs of farming community, village prosperity and all round socio-economic development of the district. In Ahmednagar district, nationalized banks has a wide network all over the district. Banks are providing large amount of finance to agricultural sector, in the forms of loans. Central Bank of India has been entrusted with lead bank responsibility of Ahmednagar district. Central Bank of India has to prepare credit plan of the district every year, and implement the same with the help of other banks and institutions. Since its establishment in the district, Central Bank of India is providing finance to agriculture sector in Ahmednagar district. Bank is performing dual role in the district, i.e. as a commercial bank and a lead bank of Ahmednagar district. Various program and schemes has been implemented by Central Bank of India in Ahmednagar district Central Bank of India And Agriculture Sector : The nationalization of banks since July 1969, was an important landmark in the banking sector of Ahmednagar district. Since nationalization of 14 banks, there has been tremendous progress in the branch banking in rural and semi-urban areas of the district.

8 Central Bank of India was established in in Ahmednagar district. The Shrigonda branch of Central Bank of India is the first rural branch of nationalized bank all over the India which was established in The Ahmednagar branch was established on 15 th May, Since 1969, Central Bank of India is catering all financial needs of Ahmednagar district. In 1972, Central Bank of India have established ten branches in Ahmednagar district, namely Ahmednagar, Ganeshnagar, Jamkhed, Kolhar, Newasa, Rahuri, Shevgaon, Shirdi, Shrigonda and Vambori. After nationalization and lead bank scheme, Central Bank of India have adopted progressive measures for expansion of credit facilities for development of agriculture sector. The agrarian sector which was formerly deprived of banking credit in the past was hereby immensely benefited by expansion of credit. Afterwards, systematic efforts are being made for making credit available for digging and construction of wells for irrigation. The lead bank survey report of Ahmednagar district, which was prepared by Central Bank of India in 1970, estimated the financial needs of agricultural sector and also estimated a large amount of funds for fast development of agricultural sector. Central Bank of India is implementing various programs and scheme for agricultural sector of Ahmednagar district. As lead bank, maximum weightage of Annual Credit Plan has been given to agricultural sector every year, since its establishment. "In 1972, there were ten branches of Central Bank of India in Ahmednagar district" 3 which in , expanded to 61 branches

9 (44 rural, 16 semi-urban and 1 urban) all over the district, which are serving the financial needs of agriculturists Central Bank of India's schemes for agriculture sector : In Ahmednagar district, bank has started and expanded its business after nationalization in Bank has started and implemented various programs and schemes for agricultural sector. Central Bank of India is having wide branch network and more than 95% branches are located at rural and semi-urban area. It means that, bank is catering problems of rural area customers, i.e. agriculturists. The four squares in the symbol of Central Bank of India represents four points namely man, finance, industry and nation. Central Bank of India is using pre-fix of 'Cent' with the name of its schemes and programs. Various schemes implemented by Central Bank of India for agriculture sector are as follows - 1. Cent Kisan Credit Card (CKCC) : Central Kisan Credit Card scheme was introduced during the year ( ). In which, bank issue credit card to farmers. It is an innovative credit delivery tool to meet the farmers need in a timely and hassle free manner. It is a simple card cum-passbook incorporation name, address, borrowing limit of borrower. CKCC limit is to be considered according to usual annual cropping pattern. This was for 3 years but now extended upto 5 years. A personal insurance package is available to the CKCC holders to cover them against accidental death of Rs. 50,000/- or permanent disability Rs. 25,000/- R(ate of 7 percent p.a.) 2. Cent Kisan Gold Card : The scheme is aimed at satisfying all sorts of investment and consumptions credit needs of the

10 borrowers inclusive of the production credit requirements for undertaking various farm and non-farm activities being taken up by the farming community. The overall limits permitted under the card will have separate sub-limit for taking care of all short-term needs of the farmers towards raising crops, working capital requirement for allied activities etc and consumption needs which shall be allowed in the form of cash credit limit. (Rate of 7 percent p.a.) 3. Cent Gold Loan Scheme (Priority Sector) : The scheme is for all types of agriculturists, who are carrying out production oriented activities, irrespective of size of holding, agricultural labour, rural artisans etc. The scheme is to meet agricultural expenses for crop production, purchase of milk animals, sheep, poultry and other allied activities including recurring expenses incurred on minor irrigation, land development, farm mechanization etc. and also to meet consumption needs of family. The maximum limit of loan per borrower is Rs. 5 lakhs. Interest rate is 7 percent for loan upto 3 lakhs for agricultural purpose. 4. Cent Tractor Scheme : Tractor financing is one of the main activities under agriculture sector. An individual (agriculturist)/ company / partnership firm engaged in agriculture and allied activities, FSS, PACS are eligible for the scheme. The total unit cost contains, cost of tractor, trailer, accessories and agricultural equipments. The scheme aimed at satisfying the needs of

11 agriculturist and to equip him with tractor and advanced technology equipments which are useful in farming. 5. DRI Scheme (Differential Rate of Interest Scheme) : The scheme was introduced in 1972, to provide bank finance at a concessional rate of interest of 4 percent p.a. to the weaker sections of the community for engaging in productive and gainful activities so that they could improve their economic conditions. The maximum amount of assistance is Rs. 15,000/-. Repayment within 5 yrs, extendable to 7 yrs. 6. Cent Warehouse Receipt Scheme (for Financing against Warehouse Receipt) : Under this scheme, finance has been given against warehouse / cold storage receipts issued by State / Central Warehousing Corporation, Private Warehouses and warehouses having tie up with collateral manager against warehouse receipts. Farmers / processors / well established traders with licenses and also having approval from Sales Tax Authorities, are eligible for this scheme. 7. "Scheme for Financing Procurement of Sugarcane Harvesters to Individual Cultivators / Group of Farmers in the Maharashtra State Under Rashtriya Krishi Vikas Yojana" : Under the scheme, financial assistance is provided to acquire mechanical sugarcane harvesters, under capital linked subsidy scheme. The scheme is aimed at minimization of cost of cultivation to overcome acute labour problems, to ensure maximum yield and sugar recovery % by timely harvesting to improve soil structure.

12 Individual cultivators of agriculturists or group of farmers are eligible under the scheme. 8. "Scheme for Financing to Joint Liability Group under Contract Farming Arrangement with Corporate" : The Scheme is aimed at to augment with flow of credit to farmers, (small, marginal, tenant farmers, oral lessees etc.) and to built mutual trust and confidence between bank and target group. Eligibility criteria is farmers or JLG, who have cultivable fertile land and are supplying the produce to corporate / agent and have also been recommended by corporate. Repayment depends on the duration of the crop and realization of sale proceeds. By implementing above various schemes Central Bank of India is financing to agricultural sector and agriculturists Govt. Sponsored Programs, Implemented by Central Bank of India as Lead Bank to Agriculture Sector : As a Lead Bank of Ahmednagar district, Central Bank of India has to implement various Govt. sponsored schemes every year with the co-ordination of supporting agencies. Under priority sector advances, finance is given to agriculture sector. Horticulture Dept., Agriculture Dept., Rural Development Dept., KVIB are the supporting agencies which helps the bank in implementation of the schemes. 1. Drip and Sprinkler Irrigation : Under this scheme, the use of drip / sprinkler is being envisaged by state/central govt. with a view to utilize more effectively the available water resources. The scheme will cover all farmers irrespective to the size of holding. Maximum subsidy permissible for one hectare will be

13 50% of the actual cost of the system or Rs. 15,000/- per hectare which ever is less. Agriculture Department is implementing this scheme. 2. Crop Insurance Scheme (Rashtriya Krishi Bima Yojana) : Hon'ble P.M. Shri. Atal Bihari Vajpayee had dedicated this scheme on 22/06/1999 to the nation. It has been implemented in Maharashtra for Rabbi Crop in and Dept. of Agriculture and Co-operation has continued the same during 2006 for Kharif. Paddy, jowar, ragi, moong, udid, tur, groundnut, sunflower, cotton and sugarcane etc. crops are covered under this scheme. The maximum insured sum will be 150 percent of the yield. This scheme is compulsory for loanee farmers and optional for non-loanee farmers. 3. Agri Clinic and Agri Business: In , Union Finance Minister in his budget speech announced 'Agri Clinics' scheme, assistance from banks and refinance support from NABARD, The scheme aims at supplementing the existing extension network to accelerate the process of technology transfer to agriculture and providing supplementary sources of input supply and services, for which, by and large, farmers presently depends upon Govt. agencies. Agri clinics are providing expert services advice to farmers on cropping practices, technology dissemination, crop protection from pests and diseases, market trends and prices, clinical services for animal health etc.

14 Agri Business Centers are providing input supply, farm equipments on hire and other services. Individual borrower will get maximum Rs. 10 lakh loan amount while for group of 5 persons, it is Rs. 50 lakh. 4. Schemes for Activities Allied to Agriculture : Various programs were implemented in the Ahmednagar district as per the potential and requirements of the borrowers. The schemes are as follows - a) Dairy Development : Scheme has encouraged the farmers to established dairy farms individually. b) Fisheries : Establishment of fish seed farms (portable hatcheries), to stock the fish seeds. c) Goat / Sheep Rearing : Scheme provide assistance to goat / sheep rearing farms to develop the number of farms. It also provide veterinary aid and also marketing facility for sale of wool, lamb, mutton etc. d) Poultry : To encourage the farmers to establish poultry farm. e) Bio Gas Plant : Installation of Gobar Gas plants, technical supervision and services etc are provided by zilla parishad agencies. f) Sericulture Development : It is economically promising scheme implemented by the banks. g) Horticulture and Plantation : In , State Govt. has implemented this scheme for the first time. It is for small

15 and marginal farmers at 100 percent subsidy and to medium farmers at 75 percent subsidy. h) Special component Plan : It is the scheme implemented by the agricultural department of Zilla Parishad. 5. Assistance for Scientific Onion Shed Construction: Under this scheme, financial assistance is given to the farmers to construct onion shed construction. The scheme is implemented by Panan Maha Mandal or market committees. 6. Scheme for Medicinal Plants : Under this scheme, financial assistance is given to farmers to cultivate medicinal plants. This scheme is implemented by Agricultural Department of Zilla Parishad. 7. Kisan Credit Card : It is a credit card for farmers. The Government of India, Reserve Bank of India and NABARD have been focusing of the need to streamline the credit delivery mechanism to simplify the existing systems so as to provide timely, adequate and hassle-free credit to farmers. Kisan Credit Card scheme is under implementation by the banks through out the country since

16 Table Progress of Kisan Credit Card in Maharashtra as on 31/03/2011 Amount Sr. No. of Cards Types of Banks Sanctioned No. Issued (000') (crores) 1. Co-operative Banks 118 1, Regional Rural Banks Commercial Banks 600 3, Total 726 4,362 Source : Report on trends and progress of Banking in India It is clear from the above table that - 1. Out of total Kisan Credit Card issued in Maharashtra, percent cards are issued by commercial banks and percent by co-operative banks. 2. Roles of Regional Rural banks is very negligible in KCC. 3. The commercial banks had sanctioned percent loan amount under KCC, out of total which is 3 times as compared to co-operative banks Agriculture Promotional and Development Program of NABARD : NABARD is the most important organization, which is implementing various schemes for agriculture sector. These schemes are as follows-

17 1. Capital Investment Subsidy Scheme (CISS) : Under this scheme finance is given to farmers to construct and renovate or expansion of rural godown. It provides term loan and minimum capacity of 100 MT construction can be permitted. 2. CSS for Development Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization : Under this scheme, finance is provided to farmers, to provide additional infrastructure, agri marketing infrastructure. Loan amount may be 50 percent of project cost. (Term Loan) 3. CISS National Project on Organic Farming : To promote organic farming finance is given to farmers to develop biofertilisers units, vermi culture hatcheries, fruit and vegetable waste compost unit etc. Estimated cost for unit with capacity of 150 T p.a. is Rs lakh (25 percent subsidy is given i.e. approx. Rs. 20 lakh per unit). 4. Venture Capital Fund for Dairy and Poultry : Under this scheme, financial assistance is given to dairy and poultry activities. 5. Scheme of Artificial Recharge of Ground Water through Dug wells in Hard Rock Areas : Under this scheme, finance is given to farmers to encourage artificial recharge of ground water (100 percent subsidy is available for small and marginal farmers, 50 percent for other farmers) unit cost is Rs per structure. 6. Agri Clinic and Agri Business : It is to provide a package of input facilities, consultancy and other services and also

18 provide self employment opportunity to technically trained persons. 7. Farmers Club Program : It is for development of farmers through credit, technology transfer, awareness creation and capacity building. It grant financial assistance of Rs. 10,000/- per club per year is given for initial period of 3 years. 8. Crop Loan : Under this scheme, crop loan is given to farmers upto Rs. 3 7% p.a. interest rate. Above are different schemes organized by NABARD for agriculture sector. Central Bank of India, Govt. sponsored schemes and NABARD programs etc. are the different sources for agricultural sector to develop and improve the agricultural activities District Credit Plan of Agriculture Sector in Ahmednagar District (Annual Credit Plan): Central Bank of India as a lead bank of Ahmednagar is preparing Annual Credit Plan, every year for the district, in which the budget and annual plan of the district is published. As Ahmednagar district is a agriculture oriented district, hence every banking and financial institute is focusing on the agriculture sector. In every annual plan, maximum weightage is given to agriculture. The picture of agriculture sector credit plan of 10 yrs ( to ) is as follows -

19 Table Agriculture Sector District Credit Plan and it's Percentage to total in Ahmednagar District for 10 Years ( to ) Fig. in Crore Agriculture Sector Total Annual Sr. Agricultur Total Year Crop Credit No. e Term Agricultur Loan Plan Loan e figures (44.56%) (34.26%) (78.83%) (100%) (46.54%) (29.28%) (75.82%) (100%) (46.03%) (26.69%) (72.73%) (100%) (53.69%) (20.73%) (74.42%) (100%) (32.84%) (16.93%) (49.77%) (100%) (31.07%) (16.63%) (47.71%) (100%) (50.83%) (27.37%) (78.21%) (100%) (32.69%) (16.71%) (49.41%) (100%) (32.67%) (16.70%) (49.38%) (100%) (28.34%) (25.09%) (53.43%) (100%) Source : Annual Credit Plan ( ) to ( ), Central Bank of India, Ahmednagar

20 Table indicates that - 1. As a Lead Bank every year District Credit Plan is prepared by CBI for all the banking institutions in the district. Out of total Credit Plan, maximum weightage was given to agriculture sector than the other sectors. 2. Total Agriculture is divided into Crop Loan and Agriculture Term Loan. In which Crop Loan have maximum weightage than Agriculture Term Loan. 3. Crop Loan shows continuous increase and as an average, the rate of increase is percent. Agriculture Term Loan shows fluctuations in the figures, however in the figure is just double as compared to year Increase / Decrease in District Credit Plan of Agriculture Sector in Ahmednagar District : Generally while planning for the next year, last years figures are considered as base to estimate the plan. If the performance is good then next year figures are increased to widen the scope. Central Bank of India is also considering last years figures of credit plan to estimate next years plan figures. The figures of 10 years i.e to 2011 are given in table -

21 Sr. Year Table Increase / Decrease in District Credit Plan of Agriculture Sector for 10 Yrs ( to ) Base Year (Considering Last Year as Base Year) Agriculture Sector Crop Loan A.T.L. Total Agri (Fig. in Crores) Percent wise Increase/Decrease in Plan Figures Crop Total A.T.L. Loan Agri Source : Annual Credit Plan ( ), Central Bank of India, Ahmednagar (A.T.L. - Agriculture Term Loan) Table indicates that, 1. District Credit Plan for agriculture sector was increased continuously. Maximum increase was in and minimum was in out of total agriculture, Crop loan is also showing continuous increase particularly in ATL shows decrease in

22 subsequent 2 years i.e & However, in the year increase is percent. As an average, the rate of increase in total agriculture is percent. It means, it is need of district to increase the agriculture finance year by year Achievement of District Credit Plan of Agriculture Sector in Ahmednagar : In District Credit Plan, annual target was given and at the end of the year amount of loan distributed are considered to evaluate the achievement. In case of agriculture sector, crop loan and agriculture term loan are the two heads of finance. Table shows the figures of target, achievement and percentage of achievement of crop loan. Table Achievement of District Credit Plan (Crop Loan) (Fig. in crores) Crop Loan Sr. Achievement Year Percent of No. Target (Loan Achievement Distributed) Source: District Credit Plan, Central Bank of India, Ahmednagar

23 Table indicates that, 1. DCP was prepared by CBI for Ahmednagar district and accordingly implemented by all banking institutions including CBI. However, the actual crop loan distributed in 10 years was always less than the targeted amount. 2. Maximum distribution of crop loan was in and minimum crop loan distributed in In , the targeted amount shows percent increase as compared to , which is highest increase. But, the actual loan distributed show lowest percentage of achievement. Sr. No. Table Achievement of District Credit Plan (Agri. Term Loan) Year Target (Fig. in Crores) A. T. L. Percent of Achieveme Achievemen Percent of nt of Total t (Loan Achievem Agri. (Crop Distributed) ent Loan + A.T.L.) Source: Annual Credit Plan, Central Bank of India, Ahmednagar ( )

24 Table denotes that, 1. In Agriculture Term Loan Sector, the estimated target was not achieved by banking institutions. The loan distributed was always less than the targeted amount. 2. In total Agriculture sector, the loan distributed was always less than targeted amount. Highest loan was distributed in & lowest was in It means target as per DCP for agriculture sector was not achieved by the banking institutions upto mark Central Bank of India's contribution in District Credit Plan of Ahmednagar District : Central Bank of India, as a lead bank of Ahmednagar district, preparing district credit plan every year. In total credit plan, Central Bank of India is contributing its role with the other banking institutions. The Central Bank of India's contribution, percentage is shown in following table, given below,

25 Table Central Bank of India's Contribution in District Credit Plan and its Percentage in Ahmednagar District ( to ) (Fig. in Thousand) % of Central District Central Sr. Bank of Year Credit Plan Bank of No. India's Plan (Amount) India's (Amount) Plan ,15,083 4,45, ,92,642 4,86, ,00,338 4,80, ,91,721 6,30, ,48,59,923 9,89, ,62,34,230 12,51, ,84,47,639 13,14, ,21,95,905 15,45, ,45,09,890 16,39, ,24,24,308 24,40, Source: Central Bank of India, District Credit Plan, Ahmednagar Table denotes that, 1. District Credit Plan, prepared by CBI, implemented by various banking institutions. CBI is one of the institute. 2. CBI's Credit Plan was increased continuously except Percentage of CBI's contribution in DCP was more than 10 upto , afterwards it was fluctuating. Average percentage of CBI's contribution is 8.27%. As an individual bank and as compared to number of branches percentage of CBI's contribution is satisfactory. 4. Increase in number of banks and branches is one of the reason decrease in CBI's contribution percentage in DCP.

26 Central Bank of India's Credit Plan to Agriculture Sector : As lead bank of Ahmednagar district, bank is planning for the district and also implementing credit plan and Government. As per the district credit plan, a target is given to Central Bank of India for implementation in every sector. For agriculture sector, Central Bank of India is implementing the plan in two sections viz. crop loan and agriculture term loan. Table shows the credit plan allocated to Central Bank of India. Sr. No. Table Central Bank of India's Credit Plan of Agriculture sector in Ahmednagar District ( to ) (Fig. in Thousand) Agriculture Sector (Credit Plan) Year Total Crop Loan A. T. L. Agriculture ,814 1,59,402 2,02, ,985 1,66,651 2,13, ,104 1,44,345 2,10, ,508 1,80,298 2,66, ,11,823 3,84,784 5,96, ,84,943 4,02,533 5,87, ,94,194 4,22,694 6,16, ,31,343 4,62,922 6,94, ,52,736 5,06,149 7,58, ,89,173 10,38,557 13,27,730 Source: Annual Credit Plan, Central Bank of India, Ahmednagar

27 Table indicates that, 1. In Crop Loan section, amount of CBI's Credit Plan is continuously increasing except In ATL also, Credit Plan is increasing except However in ATL Credit Plan was 2 times as compared to In total agriculture sector, CBI's Credit Plan is continuously increasing except & In , Credit Plan increased by percent as compared to Loan distributed by CBI to Agriculture Sector In agriculture sector, Central Bank of India is financing under crop loan and agriculture term loan section. The plan, its performance and its percentage of crop loan is presented below- Table Crop Loan distributed by CBI ( to ) Crop Loan Sr. Performance Year No. Plan (Loan Distributed) (Fig. in thousands) Percent of Loan Distributed ,814 28, ,985 55, ,104 66, ,508 45, ,11,823 90, ,84,943 1,45, ,94,194 1,68, ,31,343 2,24, ,52,736 1,85, ,89,173 1,83, Source: Central Bank of India, District Credit Plan

28 Table reveals that, 1. Credit Plan prepared by CBI for Ahmednagar district and accordingly loans are sanctioned by CBI. However, actual disbursement of loan was always less than targeted amount excluding and In the year , actual loan distributed was only percent as compared with plan. 3. In & CBI's loan distribution was more than 100% which is satisfactory. The Central Bank of India's performance in agriculture term loan sector is presented below, Sr No Year Table Agriculture Term Loan Distributed by CBI Plan ( to ) Agriculture Term Loan Percent of Loan Loan Distributed Distributed (Fig. in thousands) Percent of Performance of Total Agriculture (Crop Loan+ A.T.L.) ,59,402 60, ,66,651 99, ,44,345 72, ,80,422 1,00, ,84,784 1,27, ,02,533 1,91, ,22,694 2,27, ,62,922 2,27, ,06,149 1,70, ,38,557 1,26, Source: Central Bank of India, District Credit Plan, Ahmednagar

29 Table denotes that, 1. CBI has prepared & implemented Credit Plan for Agriculture Term Loan and accordingly loans were sanctioned. The actual disbursement of loan was always less than the planned target. In percentage of loan distributed was just percent which is lowest percentage of loan distributed. 2. In total agriculture sector, the percentage of actual disbursement of loan was always less than the target. In , actual loan distributed was percent and year shows lowest percentage of loan distribution Classification of CBI's Agriculture Sector Credit Plan: Under Agriculture sector, finance is given under different heads like crop loan, minor irrigation, land development, farm mechanization, plants and horticulture. The classification of CBI's Credit Plan is as follows-

30 Table Classification of CBI's Agriculture Sector Credit Plan, ( to ) Ahmednagar (Fig. in Thousand) Year Total Agriculture Allied Agriculture (1) Activities (2) (1+2) N. A. N. A. N. A Source : CBI, Credit Plan, Ahmednagar Note : Information for is not available Table shows that, total agriculture is divided into two sectors viz. agriculture and allied activities. Under allied activities loan are given to various activities other than agriculture. 1. Credit Plan only for Agriculture Sector is increased continuously. As an average the rate of increase in agriculture finance is percent. 2. There is fluctuations in Credit Plan for allied activities. However, in the year allied activities plan was near about 3.5 times as compare to the year

31 Sector wise classification of CBI's Agriculture Credit Plan is given below : Ahmednagar Year Table Sector wise Classification of CBI's Agriculture Finance Plan Agriculture Sector CL MI LD FM PH OTH (Fig. in Thousand) Total Agriculture N.A. N.A. N.A. N.A. N.A. N.A. N.A Source: CBI, Annual Credit Plan, Ahmednagar CL - Crop Loan MI - Minor Irrigation LD - Land Development Table reveals that, FM - Farm Mechanization PH - Plant & Horticulture OTH - Others 1. CBI's Credit Plan for Agriculture is divided into six sectors. The amount of Credit Plan of all sectors are fluctuating. 2. In Crop Loan Sector, amount of Credit Plan is increasing except and In , Credit Plan amount was 6.75 times as compared to

32 3. Minor Irrigation, Credit Plan is increased continuously except In Credit Plan was decreased by percent as compared to Out of total Agriculture, always minimum weightage was given to Land development. In Land development plan was 15 times as compared to In Farm Mechanization Sector, Credit Plan is fluctuating. In , Credit Plan decreased by percent in plant and horticulture sector, Credit Plan is fluctuating. However, in it increased by percent. 6. Credit Plan of 'Other' sector, was 9.19 times as compared to Classification of CBI's Finance to Allied Activities : The activities which are directly and indirectly related to and depend on the agriculture but not involved any agriculture activity is called as allied activities. Sector wise classification of CBI's Credit Plan is as follows : Table Sector wise Classification of CBI's Finance Plan to Allied Activities Ahmednagar (Fig. in Thousand) Allied Activities Year Total DD PF SGP Fishery Forestry Storage N.A. N.A N.A. N.A N.A. N.A N.A. N.A N.A. N.A. N.A. N.A. N.A. N.A. N.A.

33 Source: CBI, Annual Credit Plan, Ahmednagar DD - Dairy Development SGP - Sheep-Goat-Pigs (rearing) PF - Poultry Farms In Dairy Development, Credit Plan is always fluctuating. In , Credit Plan amount is 6.84 times as compared to Poultry farming sector also shows fluctuations but, Credit Plan amount in is 9.85 times as compared to In sheep-goat-pig rearing sector, Credit Plan of is 2.57 times as compared to In Ahmednagar district, due to less potential in fishery & forestry minimum weightage has been given in Credit Plan to fishery and forestry sector In storage sector, Year shows the highest increase in Credit Plan. It is 2.67 times as compared to Recovery Performance of Central Bank of India : Recovery of loan by any banking institution is the prerequisite for its sound financial condition. The bank provides loan to agriculture sector with twin objectives i.e. to improve the living standard of farmer and productivity of farms and to increase the financial soundness of the banks. It is a responsibility of the

34 borrowers to repay the loan amount with certain interest as laid down by banking institution. The level of recovery of the loan affects the quality of the bank and low recovery means increase in non-performing assets. Table shows the recovery of Central Bank of India in agriculture sector in Ahmednagar district. Table Recovery Performance of Central Bank of India in Agriculture Sector in Ahmednagar District ( , , ) Sr. Year No. (Figures in thousands) Agri. Sector Credit Percent of Recovery Demand Recovery Overdue (%) Overdues to Demand Source: Central Bank of India, credit plan of Ahmednagar, , , It may be understood from the above table that, 1. Credit recovery percent of CBI for 3 years are percent, percent and 49 percent, which is good but not satisfactory, because increase in low recovery may leads to non-performing assets. Percentage of overdue to demand for 3 years are percent, percent and percent respectively. 2. In case of year , bank position is good where recovery percent is more than 60 percent and overdue percentage is less

35 than 40 percent but, in case of , the proportion of credit recovery to overdue is 1:1 approximately which leads to think over the financial condition of the bank. Bank has to implement recovery programs in agriculture sector Agriculture Sector Cropping Pattern of Ahmednagar District : The Ahmednagar district is the biggest district of Maharashtra in terms of area. The total geographical area of the district is lakh ha. The net cropped area is 12,56,500 ha, out of which an area of 3,30,000 ha (26.27 percent) is under canal (84,000 ha) and well irrigation. About 9,26,500 ha (73.73 percent) area is rain fed. The area under kharif crops is 4,60,000 ha (36.60 percent) while 7,58,000 ha (60.32 percent) area is under rabbi crops in The present farming system which is adopted by majority of farmers in rain fed area of the district are food grain crops like bajara, jowar as cereals, moog, udid, tur as pulse crops and in combination with dairy and animal husbandry. The dairy, animal husbandry, poultry and various allied activities of farming are major pillars of agriculture today. The analysis of farming of the district indicates the dominance of sugarcane as a cash crop with dairy as inseparable combination and it is being supplemented by either vegetables and horticulture crops like pomegranate, sweet lime, grapes etc. The cropping pattern of Ahmednagar district from to is given in the following table ,

36 Table Statement showing Area Under Major Crops in Ahmednagar District ( to ) 00' Hector Sr. No. Major Crops Grains Pulses Oil seeds SugarCane Cotton Net Area Under Crops Soruce: District Social and Economic Abstract, March 2005, P.No. 44, March 2010, P.No. 4 Table indicates that, 1. Area under major crops in Ahmednagar district is shown in the table. Grains includes bajara, jowar, pulses includes gram, moong, udid. The area under grains and pulses is decreased from and 1102 in to and 1004 in respectively. The fluctuating rainfall is the major reason behind decline in grain and pulses. 2. Due to canals and irrigation facilities like well, bore well (Tube well), drip and sprinkler irrigation area under cash crops is increased. In case of sugarcane, in , 360 land area

37 which was increased to 791 in In case of cotton, in land area, which was decreased to 45 in The reason behind these changes in cropping pattern is irrigation facilities and finance available from banking institutions. Since 1969, banking industry was developed with a tremendous speed due to nationalization and after due to banking sector reforms. Hence banks have played important role in agricultural finance Changes in Cropping Pattern of Ahmednagar District : In Ahmednagar district, agricultural finance is available in a large scale from various sources like, commercial banks, cooperative banks, RRB's Since establishment in 1969 in Ahmednagar, Central Bank of India was financing to agriculture sector as a 'Lead Bank'. Various schemes, programs, Govt's schemes, NABARD programs which were implemented by the Central Bank of India, for last 43 years result in various changes of society. In case of Ahmednagar district, the area is of 'rain shadow' characteristic, which had always problem of rainwater. Hence in the district irrigation was always problem for farmers. But due to construction of dam, canals and wells, near about 25% problem was solved and remaining problem was solved by technology like drip irrigation, sprinkler irrigation and change in cropping pattern and adoption of allied activities like dairy, poultry and development of sugar industry. Grains, pulses and oil seeds were the traditional crops in Ahmednagar districts but which was changed in last 3-4 decades. Farmers moved to cash crops like sugarcane, cotton and horticulture

38 crops. Table shows position of major crops of Ahmednagar district for last 10 years given below, Table Changes in Cropping Pattern of Ahmednagar District ( to ) (00' Hector) Sr. No. Major Crops Grains Pulses Oil seeds Sugar Cane Cotton Net Area Under Crops Source: District Social and Economic Abstract March 2010, P. 2,4 Table indicates that, 1. Area under traditional crops like grain and pulses is decreasing year by year. In , grains and 1004 pulses decreased to ha grains and 816 ha pulses in in Ahmednagar District. 2. Area under cash crops like sugarcane and cotton is increasing. In area under sugarcane and cotton was 791 and 45 hector, which increased to 822 and 63 hectors in respectively. 3. In case of area under oilseeds is also decreased in last 10 years from 773 in to 432 in But in last 5 years,

39 the cultivation of oilseed like soya bean is increasing in Ahmednagar district Reasons behind Changes in Cropping Pattern in Ahmednagar District : Following are the reasons behind change in cropping pattern in Ahmednagar district. a) Irrigation of land : Before irrigation farmers were depend on the rain for cultivation but, due to construction of small and medium dam, wells, tube wells, canals, near about percent of area of Ahmednagar district is well-irrigated. Hence farmers have changed the cropping pattern. Instead of traditional crops now, farmers are moved to cash crops. b) New Technology in Irrigation : Drip irrigation and sprinkler irrigation, pipeline are new technologies available for irrigation. Which is not so much costly and banks are providing finance to such technique and equipments. c) Scientific Research : In agriculture sector, scientific research of water, soil proves that various new crops are suitable for stony land e.g. in the area of drought prone tahsils, it is proved that, instead of traditional crops, horticultural crops like pomegranate is suitable. It gives high yield. Hence, in drought prone area farmers are moving to oilseeds and fruits like pomegranate.

40 d) Availability of Export Facility for Horticulture Products : Farmers can export the Horticulture products like grapes, pomegranate, sweet lime farmers are developing vinery farms because vinery plants are available. Hence cropping pattern is changed. e) Co-operative Movement : Ahmednagar district is pioneer of co-operative movement in Maharashtra. Today near about 18 co-operative sugar factories are in working condition. Due to irrigation, irrigated land was increased and farmers moved to sugarcane as a beneficial product. f) Bank's Finance : After nationalization of banks in 1969, banks were expanded to rural area. They provide finance to crop loan, construction of well, bore well, pipelines, expensive crops, vehicles, tractors which are basic needs of farmers hence, with the help of this finance, farming pattern is completely changed in Ahmednagar district Production of Major Crops in Ahmednagar District : Traditional crops of Ahmednagar district were grains and cereals like jowar, bajara, maize, wheat, oilseeds and cash crops like sugarcane, cotton But in last few years, due to change in cropping pattern, farmers were moved to cash crops and towards horticulture crops like sugarcane, grapes, pomegranate, sweet lime, vegetables like onion, brinjal and production of pulses is decreased in a large scale. The production of major crops in Ahmednagar district is given below.