Micro, Small and Medium Enterprises (MSMEs) have been accorded an important role in your Bank’s growth charter. Your Bank has put in place a relationship based organization structure model to better serve the MSME Customers. With an endeavour to reach out to MSM clients, your Bank has set up dedicated City Centres in 19 major cities. MSME desks, mapped to one of these cities, have been established in major business areas in the vicinity of these Centres. With such initiatives, your Bank has increased its presence in the MSME space to more than 62 centres covering most of the MSME sectors/ clusters of prominence.
Your Bank has also been continuously striving towards meeting different requirements of the MSME sectors. Your Bank has signed three MoUs in the past year with a view to enrich the offering of its MSME loan basket. Your Bank has signed MoU with Srei Sahaj E-Village Ltd. to facilitate financial inclusion of micro Enterprises under the Government of India’s National e-Governance Plan (NEGP). Your Bank has also tied-up with Bharat Earth Movers Limited (BEML) as a preferred bank to enable end-users for procurement of products manufactured by BEML. In addition, your Bank has entered into an agreement with Mahindra First Choice Limited (MFCL) for providing working capital finance to their authorised dealers. Your Bank is also working closely with World Resource Institute (WRI), one of the top international research institutes in encouraging energy saving projects.
Your Bank appreciates the importance of MSME sector in the significant role in the development of the nation and its economic growth. In this background, your Bank took the initiative and launched major awareness campaign for MSMEs to bridge the knowledge gap. Your Bank came up with customer education series, viz., SME Business Guide, SME Small Business School, SME Forum, etc. covering many relevant and important issues on MSMEs and global business at large in both print and electronic media respectively. Your Bank has also conducted awareness building initiatives in the important MSME clusters of Pune and Ludhiana.
With a view to promote MSME building initiatives taken up by various for and non-profit organizations, your Bank has actively participated in various trade fairs, MSME promotional events throughout the past year.
Agriculture and Microfinance
For your Bank, financing agriculture is not just financing an economic activity/agri-rural infrastructure, but a creative act that has larger dimension of the well being of the entire farming community (supporting India’s major population that is occupied in agriculture sector), ensuring food security of the country and creation of an enabling and a sustainable environment for future cycle of agriculture production.
Towards achieving that goal, your Bank has set up a separate vertical for catering to the Agri Business. In an endeavour to reach out to the rural populace, branch network is continuously being expanded. Already, 240 branches are in operation for agri-business and these branches are grouped in 16 clusters under six regions pan India. Branches are also equipped with requisite manpower. The officers have been imparted necessary skill sets in the field of marketing, credit appraisal, legal issues, etc.
In order to reduce turnaround time and to have a uniform credit appraisal system, your Bank has set up 14 Agri Processing Centres (APCs) at the cluster Level. Further, additional APCs are purposed in the current year commensurate with the expansion in branch network.
Agri-business of your Bank consists of a mix of retail agri lending, corporate agri lending and funding farmers through corporates. Special focus on the cooperative sector has been given to improve their access to formal lending, thereby enabling the benefits to trickle down to the ultimate stakeholders, i.e., the member farmers.
To ensure credit flow among its members and forge better banker-borrower relationship, your Bank has already formed 170 Farmer’s Clubs, which are grassroot level informal fora for mutual benefit to the Bank and rural people.
Your Bank actively participated in SHG-Bank Credit Linkage Programme and for delivering financial services to the poor in a sustainable manner and has linked 1069 SHGs and emphasis is being given to provide credit to each SHG to increase their sustainability.
Your Bank is using technology to a great extent for generation of MIS reports as well as data required for statutory requirement. All our branches, including those in semi urban and rural areas, are on core banking platform and offer all basic banking products and services. This has
helped the field functionaries to concentrate on field visits to the farmers, monitoring and recovery of agricultural advances, etc., thereby ensuring productive assets under agriculture credit.
Your Bank is participating in the Financial Inclusion mission as initiated by RBI through its rural and semi urban branches and has been implementing various decisions taken by RBI, through Lead Bank District Consultative Committee of respective districts. Savings bank account “Sabka” and “mobile cash van” are some of the flagship products, which are receiving outstanding response from the desired strata of the economy.
In order to facilitate financial inclusion of micro enterprises under the Government of India’s National e-Governance Plan (NEGP), your Bank has signed on MoU with a leading company. Your Bank is in the process of appointing Business Correspondents and Business Facilitators to extend the basic banking services to rural population. Further, in the second phase of network expansion, your Bank proposes to open more branches in rural areas to cover more number of villages for rendering all types of banking products to the needy villagers.
Environment Protection Schemes
Your Bank has undertaken the pioneering role in the Indian banking sector in the area of environmental banking. Besides offering various banking services, your Bank has been providing services in the area of Clean Development Mechanism (CDM)/Carbon Credits under Kyoto Protocol and Voluntary Emission Reductions (VERs). Your Bank has also been acting as financial intermediary for World Bank funding under Ozone Depleting Substance (ODS) phase out schemes since 1991 and India Chiller Energy Efficiency Project (ICEEP), a unique project aimed at mitigating global warming, is being implemented from current year by your Bank.
Carbon Credit Services
Your Bank has set up a team for providing specialized carbon credits/emission trading advisory on Clean Development Mechanism (CDM). The Bank is facilitating all the services related to CDM projects and carbon credit market, Viz., Funding of the CDM projects; Providing Advisory Services for Trading of CERs and VERs; Upfront Financing Against the Carbon Credits/Carbon Credits Receivables, Services for Programmatic CDM.
During the year, your Bank has completed nine technical advisory/trading assignments and more than a dozen assignments are in progress. Five projects have been assisted under the scheme for upfront financing against carbon credit receivables.
Ozone Depleting Substances (ODS) Phase-out projects
Your Bank is acting as Financial Agent (FA) for the World Bank (WB) administered Ozone Depleting Substances (ODS) Phase-out projects (ODS III & IV) of Ozone Trust Fund (OTF) for implementation of the projects aimed at phasing out production and use of Chlorofluoro Carbon (CFC) and Carbon Tetrachloride (CTC) in India as required under Montreal Protocol. During the year your Bank earned USD 0.13 million (Rs.0.63 crore) as fee based income for disbursement of grant funds aggregating USD 8.14 million (Rs.38.26 crore) to the beneficiaries under the two projects. Cumulatively, upto March 31, 2010, grant funds aggregating USD 116.13 million have been released through your Bank under ODS III & IV projects.
India Chiller Energy Efficiency Project (ICEEP)
Your Bank has signed Project Agreement on August 26, 2009 with the World Bank for acting as financial intermediary and project implementing entity for implementing India Chiller Energy Efficiency Project (ICEEP), aimed at accelerated replacement of energy inefficient centrifugal CFC based chillers with more energy efficient non-CFC based chillers as a programmatic activity. This is a unique programme launched on September 16, 2009. The project is financed out of grant funds of USD 6.3 million under Global Environment Facility (GEF) and USD 1 million under Multilateral Fund (MLF) and CDM benefits. The project is being developed as small CDM Programme of activity with UNFCCC which will overcome high cost of registration of 370 small sub-projects of individual beneficiaries.
The eligible beneficiaries in India would receive financial incentives under two options. Under Option 1, up-front grant subsidy of 20% of the cost of new efficient centrifugal chillers would be available, based on a normative price of USD 400 per TR. Under Option 2, the Chiller owners would be eligible to receive around 60% of the CDM revenues to be generated from actual energy savings achieved by the new chillers. During the year, your Bank has registered 11 projects for replacement of 45 chillers for aggregate grant subsidy of USD 1.78 million under the project. Your Bank has so far received grant funds aggregating USD 1.25 million for grant of subsidy and meeting project expenses.
-- Pg 47 - 48 of Annual Report
Corporate Social Responsibility Initiatives
Corporate Social Responsibility refers to the responsibility of the organisation not only towards its stakeholders but also towards the society at large. It refers to undertaking of activities by organisations with an objective of rendering services for the benefit of the society with a non-profit motive.
Historically, your Bank and its earlier form, the Industrial Development Bank of India, had always gone beyond immediate business objectives to work for the betterment of the society. Your Bank continues this endeavour for the betterment of the society in general and the less-fortunate in particular. Supportworthy projects were chosen keeping the paramount objective of catering to every section of the society. Accordingly, your Bank has supported many such activities like sponsoring cooking equipment for underprivileged school children, providing funds for repairs / maintenance of school building, sponsoring of an event for the visually and hearing impaired, purchase of Colour Doppler ultrasound machine for charitable diagnostic center, helping the children of Spastic Society, etc. Going forward, your Bank will continue to play this vital role by supporting such noble causes.
-- Pg 57 of Annual Report