A signboard of Nagaland Rural Bank wishing travellers ‘safe journey’ at the outskirt of Mokokchung town in Nagaland. As per the recent NABARD’s State Focus Paper 2022-2023, out of 188 bank branches in Nagaland, 11 were Regional Rural Bank. (Morung Photo)
Our Correspondent
Kohima | February 4
As of June 30, 2021, there were 188 bank branches in Nagaland indicating a total of 10524 persons per branch, while there were 348 ATMs in the state.
This, among others were some of the key highlights of the ‘State Focus Paper (SFP) 2022-2023 for Nagaland’ released recently by the National Bank for Agriculture and Rural Development (NABARD),Nagaland Regional Office, Dimapur.
Out of 188, there were 22 Commercial Banks (12 public and 10 private sector) operating in Nagaland with 157 branches while 1 State Cooperative Bank (StCB) and 1 Regional Rural Bank (RRB) had 21 and 10 branches respectively.
The State has a 2-tier cooperative credit structure with one StCB at the apex level and Primary Agricultural Cooperative Credit Societies (PACS) at the base level.
India Posts Payment Bank has started functioning in the state, adding to the financial service network in the state, the SFP noted.
The person per bank branch is much higher than the all India average calling for more initiatives towards financial inclusion in Nagaland.
As per Reserve Bank of India data, in quarter ending June 2021, there were 1,57,730 functioning offices of commercial banks across India, denoting around 7,676 people per branch when computed with 2011 census data of 121.08 crore population.
Meanwhile, the SFP, an annual document articulating the input acquired by Potential Linked Plans (PLPs), pointed out the potentials for various priority sectors in the State as well as constraints in various inputs for development.
In doing so, it identifies critical gaps in infrastructure and provides suggestions for improvement, while attempting to present a complete perspective for development planning in Nagaland for the financial year 2022-23.
In her foreword, Tiakala Ao, General Manager/OIC, NABARD, Nagaland Regional Office expressed happiness that the SFP for Nagaland had an assessed credit potential of Rs 956.09 crore under priority sector activities for the year 2022-23.
The focus of banks during current financial year (2022-23) should be in saturating tune potential gap with Kisan Credit Cards (KCCs) with various special focus on Animal Husbandry, Fishery and PM KISAN beneficiaries and operationalising the Agriculture Infrastructure Fund (AIF) in Nagaland, she noted.
Financing of Farmers Producers Organizations (FPO) including those promoted under the central sector scheme for formulation of 10,000 FPOs in the state should also be targeted, she added.
Apart from credit potential and banking profile, the NABARD’s SFP also assessed various aspects of the State economy, particularly credit flows and financial inclusion, for progressive and inclusive development. Some are highlighted hereafter.
Ground Level Credit Flow (GLC)
The GLC flow under Priority Sector increased from Rs 482.72 crore during 2019-20 to Rs 617.30 crore in 2020-21, indicating a 27.88% increase.
The total agricultural advances during 2020-21 was Rs 193.70 crore, while the disbursements under MSME and other priority sectors were Rs 391.55 crore and Rs 32.05 crore respectively.
When compared with previous year, the MSME sector has registered a growth of 99% but there was a -18% negative growth under other priority sectors.
The share of Agriculture Credit (Crop Loan + Term Loan) during 2020-21 was 31.37% of the total private sector lending.
Financial Inclusion
Meanwhile, the SFP informed that as on March 31, 2021, a total of 59,637 people have been enrolled under PM Jeevan Jyoti Bina Yojana. Similarly, 1,23,80 persons have been covered under the PM Suraksha Bima Yojana while 10,160 have been covered under Atal Pension Yojana.
The accounts holders under the PM Jan Dhan Yojana stood at 3,24,321 during the same period.
A total of 11 banks have 217 Banking Correspondents/Customer Service Points in rural areas of Nagaland as of June 30, 2021 but still there were some unbanked blocks in the State.
Direct Benefit Transfer (DBT) has been successfully rolled out Nagaland with Aadhaar seeding und authentication, the SFP noted.
Farm Credit
Agriculture is the largest employer with more than 60% of the State’s workforce engaged in the sector.
Accordingly, the SFP assessed potential for credit support for Farm credit (both crop loan & term loans) for 2022-23 at Rs 58.82 crore.
Issue of Kisan Credit Cards (KCCS) for crop loans, Animal Husbandry and Fishery activities will further boost farm credit, it noted.
The SFP also called for increasing investment in the sector, especially keeping in view the GoI aim of doubling farmers' income, considering the importance of agriculture and allied sector in increasing income, employment and achieving inclusive growth.
Storage go downs and Market yards
The SFP also noted scope for development of godowns, cold storages and ripening chambers in private sector through bank loan.
The potential for credit support assessed for Storage Godowns Market Yards for 2022-23 is 10.64 crore, it said, adding that availability of scientific storage facilities is one of the critical requirements to ensure remunerative prices to farmers and reduce losses on account of improper storage.
Implementation of the Agriculture Infrastructure Fund (AIF) is expected to give a boost to this subsector under Agriculture, it added.
Land Development
The potential available for the Land development, Soil Conservation and Watershed development sector for 2022-23 has been estimated at Rs 5.11 crore, the SFP said.
Natural resources management is a basic requirement for improving productivity, it noted, further pointing out that NABARD too supports treatment of arable land for enhancing its productive capacities under its watershed development programmes.
The treated area offers opportunities for watershed plus activities, it added.
Food and Agro Processing
The NABARD’s paper also underscored the significant role played by the Food and Agro processing sector.
Among others, it helps increase value addition in agriculture and horticultural produce, diversification and commercialisation of agriculture, reduction in waste of farm produce, generating employment opportunities and enhancing export earnings, it said. Variety and quantity of crops produced in the state offer vast potentials for specific agro processing activity in the State, it maintained, while assessing the potential lending to agro processing units at Rs 15.01 crore for 2022-23.
The implementation of the PM Scheme for Formalization of Micro Food Processing Enterprises (PMFME) through State’s Directorate of Industries & Commerce (DIC) would further increase this sunrise sector, it added.
Investment in Agri Sector critical
Empirical evidence shows that higher government spending on capital investments has a crowding-in effect on private investments by raising the marginal productivity of private capital, the SFP said.
Given that the agriculture sector as critical for sustainability to the majority of the state's population, it is imperative that the focus of development should be on increasing capital formation in the agriculture and allied sector through public and private sector investment, NABARD stressed.
In the private sector, investment credit or long-term agriculture loans have been identified as the major driver of private sector capital formation, and therefore an immediate thrust is required by banks to raise its share in the total agricultural credit in the state, it said.
Refinance is provided by NABARD for Short Term-Seasonal Agricultural Operations (ST-SAO) or Crop Loans as well as Long Term/Medium Term under Automatic Refinance Facility, it added.
