Chizokho Vero
Kohima | July 29
Chief Minister Neiphiu Rio today said the state government is adopting measures to ensure wider coverage of banking networks by requiring all salary payments of government servants in all districts to be made only through bank accounts by the end of October 2010.
“Slowly, we will like to extend this to all stations where there are banks. We are also aware that the Government of India desires to extend banking coverage to all un-banked blocks in the country, and cover all villages having a population of 2000 and above. Nagaland has about 200 villages that have a population of 2000 and above. Thus our point of reference and the goals we have to achieve are clearly defined and before us to pursue,” Rio said.
Inaugurating the new premises of the SBI Kohima Bazar branch here at the PHQ junction this morning, Neiphiu Rio said Nagaland is one among ‘the last frontiers of banking in the country’ stated to have the highest number of “un-banked” blocks.
“This is not a handicap. It is an opportunity to perform and achieve,” Rio said and requested the cooperation of the SBI in upgrading its branches to currency chests where Sub-Treasuries are located (the RBI has banned functioning of non-banking treasuries).
Nagaland still has 21 “un-banked” blocks. After a gap of many years, the state has now received ‘approval in principle’ for opening of banks in 6 “un-banked” blocks in the state, he said. “We are now waiting for RBI to set the ball rolling by starting the bidding process.”
In many blocks, banks cannot set up branches physically due to lack of adequate infrastructure, security, connectivity and low scale of financial transactions, he said.
However, since there are other options such as banking correspondents and financial intermediaries, he requested the banks to “actively examine these options and come forward with practical and workable alternatives.” He said the state government has been extending assistance in delivering of remittances through the state helicopter wherever the need rises.
Also, the chief minister said banks will have to realize that their job is not only lending and recovering loans. They also have the responsibility of bringing about financial literacy to the people of the state, and to inculcate in them financial prudence and discipline, as well as knowledge of profitable savings and sound investments.
An important area of concern is the need for people to learn to live within their means, and borrow responsibly, he said.
“For a state like Nagaland that has transited to money culture barely a century ago, these are still new and unknown things for the majority of the people of the state, Rio said. Unless banks accept these responsibilities seriously, ‘we will all fail to have a visible impact in the lives of the people who live in the interior areas.’
“The state government will do its best in providing support in whatever way possible,” he said adding together with the intervention and support of the RBI, ‘we are hopeful that substantive progress can be made.’ Rio also placed on record the appreciation of the state government to the RBI Regional Office Guwahati, for their renewed interest and initiative in the banking sector in Nagaland in the last two years. For the first time, RBI has appointed a Nodal Officer for the state to help process things faster.
Rio also was appreciative that the RBI has reported improvement in the CD ratio of the state from 32.12 during March 2009 to 36.70 during December 2009. But this is still far below the national ratio which is above 70%. We all know that poor credit flow in the state is largely because of banks who take deposits without lending.
He informed the gathering that the government set a target of assisting at least 1000 entrepreneurs for which Rs. 10 crore has been set aside as seed money during the current fiscal. Rio said the government will expect the banking fraternity to participate in this initiative by providing financial linkage.
Also speaking at the occasion, Chief General Manager RK Garg announced 3 more SBI branches at Dimapur and Kohima and at least one at an “un-banked” block during the financial year. SBI has already 38 ATMs in Nagaland and plans to add 12 more.
SBI has 56 Farmers’ Clubs and intending to add another 100 more during the financial year. SBI has credit linkages with many Self Help Groups (SHGs) in Nagaland and plans to link another 500 SHGs during the financial year provided eligible SHGs come forward.
It has target to finance horticulture projects as well. At present, Credit portfolio of SBI stands at Rs.950 crores, covering 70% credit of all the Banks in Nagaland and plans to increase to Rs.1000 crores soon. Under Corporate Social Responsibility programme, SBI has adopted 111 Girl Children in Nagaland and support them in their education.
As part of support to state government’s declaration of the year 2010-11 as “Year of Entrepreneur”, he said that SBI plans to set up six Rural Self Employment Training Institute (RSETI) in different centers in Nagaland to train and educate the youth for self employment.
