GOING BY statistics, this year could well be considered as one of growth and achievements for banking sector in Madhya Pradesh. However, a series of frauds - some quite unique - almost overshadowed the achievements.
With the opening of a large number of branches and ATMs across the State, the banking sector has witnessed 6.8 per cent growth. The total deposits till date tentatively stand at Rs 65,000 crore, whereas advances are at Rs 42,327 crore. The sector has registered a growth of 48.5 per cent in investments. The Vaidyanathan Committee recommended Rs 2,750 crore grant to MP for revival of cooperative banks.
Following the Union Finance Minister’s directives to double agricultural credit, the sector’s achievement is Rs 4,582 crore against the target of Rs 7,595 crore (FY-2006-07), with 60.34 per cent growth rate. Commercial banks, RRBs and cooperative banks have jointly disbursed Rs 1,043 crore under new finance to 230227 farmers in MP, whereas 14,363 new investment projects have been financed.
Registering 7 per cent growth in agricultural advances, 251855 Kisan Credit Cards (KCC) have been distributed. The State also has a unique achievement to its credit - Jhabua and Ratlam districts achieved 100 per cent coverage under KCC. The small-scale industry (SSI) sector advances have been to the tune of 8.1 per cent, whereas advances to schemes related to weaker section stand at 1.1 per cent.
Under the annual credit plan, whose target was Rs 10,548 crore, the achievement as on date stands at Rs 5,947 crore, which is 56 per cent of the set target. The target set for PMRY cases was 32,000 against which disbursement of Rs 3.41 crore has been made to 576 cases. The year’s achievement for the State Level Banker’s Committee (SLBC) was its special report on PMRY status, which covers the entire gamut of issues – right from prospects, problems to default rates and suggestions to make financing better for the beneficiaries of government-sponsored schemes.
However, the series of high-level frauds in both public sector and private new generation banks have raised doubts on banks’ functioning and credibility. On one hand frauds have pointed fingers at bank officials and on the other they have exposed the lacunae in the system and hi-tech modus operandi of the fraudsters.
Several cases of bank officials accepting bribes from PMRY beneficiaries were exposed and siphoning of huge amounts through Internet banking and ATMs stunned customers. Investigating agencies and police have admitted that officials were hand-in-glove with criminals in some cases. The December 6 incident, when Rs 8.75 lakh was reported to have been withdrawn unnoticed from State Bank of Indore ATM at Piplani, shocked Bhopal citizens. The fraud was perpetrated in the most sophisticated manner by unlocking series of keys and breaking the combination code.
At the fag end of the year, taking advantage of lacunae in Internet banking system of ICICI Bank, a whopping Rs 7 lakh was transferred from the savings accounts of five customers in Jabalpur on December 28.
Earlier, in September, following a City court’s directive, a case of criminal breach of trust of Rs 30 lakh was filed against the regional manager and branch manager of Punjab National Bank. Also, the City police while investigating murder cases expressed unhappiness over banks not following the regulations related to ATMs, as either there was no camera at ATMs or they usually remained dysfunctional.
The variety of frauds committed in the year reminds of the previous year, when the banking industry was shocked as police busted a racket of blackmailers in October where banks were swindled by luring its managers to sex. The nabbed culprits had blackmailed bank officials into clearing forged cheques and disbursing loans under pressure.
During the year, the special court of CBI sentenced several bank managers (both PSBs and cooperative banks) to imprisonment and imposed penalty in various districts. A PNB manager from Ratlam was sentenced to three years of rigorous imprisonment and Rs 7,000 penalty for accepting a bribe from a PMRY beneficiary.
The year also witnessed a series of bank strikes, including a week-long strike of State Bank of India. Out of six strikes, the All India Bank Employees Association called for three on the issues of outsourcing, dilution of government’s equity in PSBs, the proposed amendments in banking regulation and demanding recruitment. The strike in October called by United Forum of Bank Unions received overwhelming response with almost all banks remaining shut.
MP Banking: Bouquets & Brickbats
1 Overall growth – 6.8 per cent.
2 Total Business – Rs 1,08,000 crore.
3 Agricultural credit – Rs 4582 crore (65.34%).
4 Kisan Credit Cards (KCC) disbursed – 251855.
5 Jhabua & Ratlam – 100% coverage under KCC.
6 SLBC publishes PMRY status report – 1st time in banking history.
7 ATM fraud – Rs 8.75 lakh withdrawn from Indore Bank ATM.
8 Internet Banking fraud – Rs 7 lakh siphoned from ICICI Bank’s customers’ accounts.
9 Several bank managers sentenced imprisonment for accepting bribes.
10 Large number of complaints registered with Banking Ombudsman.