Action plan
KALBURGI & YADGIR DISTRICT CENTRAL COOPERATIVE BANK LTD., KALBURGI (KARNATAKA State)
DRAFT ACTION PLAN OF THE BANK FOR 3 YEARS i.e., FOR 31-03-2019, 31-03-2020 &
31-03-2021
(A) Area Of Operation:
Kalburgi & Yadgir District Cooperative Central Bank started operation in the year 1917, completed centenary of the bank last year; bank is operating in two districts i.e Kalburgi and Yadgir.
Operating Branches:
Kalburgi District is Operating with 8 Branches along with 184 Primary Agriculture Cooperative Societies.
Yadgir District is Operating with 03 Branches along with 89 Primary Agriculture Cooperative Societies.
Deposits/Advances:
- · Total Deposits of Rs 169.95 Crore as on 31/3/2018, (CASA Deposits 63.42) as on 31/3/2018.
- · Total Advances of Rs 552 Crore (Crop loan 432.48 Crore).
- · CRAR 9.83% as on 31/3/2018.
- · Gross NPA 16.09%, Net NPA 14.86% as on 31/3/2018.
- · NABARD Statutory inspection rating was “c” with 46.78 marks with reference to 31 March 2017.
Provision made during the year 2017/2018 : Rs 10662543.
- Group gratuity Insurance provision : Rs 1528710.
- CBS software rent to TCS : RS 2652063.
- Exgratia/Bonus : Rs 6481770.
(B) About District:
Gulbarga, now officially known as Kalaburagi, is a city in the Indian state of Karnataka, India. Gulbarga city is called one of the Sufi cities having famous religious places, like Khwaja Banda Nawaz Dargah, Sharana Basaveshwara Temple, Ladle Mashak and Buddha Vihar. It also has a fort built during Bahmani rule. The predominant soil type is black soil. The main crops are TOOR Dall, groundnuts, rice, Jowar, and Pulses. Gulbarga is the largest producer of toor dal, and pigeon peas in Karnataka.
Climate: The climate of the district is generally dry, with temperatures ranging from 8 °C to 45 °C and an annual rainfall of about 750 mm. The year in Gulbarga is divided into three main seasons. The summer lasts from late February to mid-June. It is followed by the southwest monsoon, which lasts from late June to late September. This is then followed by dry winter weather until mid-January.
Irrigation Potential: the general elevation ranges from 300 to 750 meters above mean sea level. Two main rivers, Krishna and Bhīma, flow in the district. Black soil is predominant soil type in the district. The district has a large number of tanks which, in addition to the rivers, irrigate the land. The Upper Krishna Project is major irrigation venture in the district. Bajra, toor, sugarcane, groundnut, sunflower, sesame, castor bean, black gram, jowar, wheat, cotton, ragi, Bengal gram, and linseed are grown in this district.
Yadgir, historically known as Yetagiri, it is dotted with many historical monuments and has a hill fort with three rounds of fortifications. There are three ancient temples, medieval
mosques, tanks and wells on top of the hill. It is also the administrative headquarters of Yadgir Taluku, one of the three talukas of the district.
Yadgir was announced As 30th District on dated 10 April 2010 by Government of Karnataka.
Climate: Yadgir is known as a local steppe climate. During the year, there is little rainfall in Yadgir. This climate is considered to be BSh according to the Köppen-Geiger climate classification. In Yadgir, the average annual temperature is 27.8 °C. The average annual rainfall is 711 mm.
Irrigation Potential: Agriculture in the district mainly depends upon the rainfall and the net area irrigated to net area sown is 38%, which is above the state average of 24%. Krishna, Bhima and Dhoni rivers flow in the district. The medium irrigation projects in the district are Hattikuni and Soudha ghar. There are 36 lift irrigation schemes and 445 minor irrigation tanks in the district.
Services Facilities Provided by Government:
- · Interest Subsidy for crop loans.
- · Yeshashwini cooperative health scheme
- · Financial assistance for SC/ST/OBC Minorities Cooperative services.
- · Loan Waiver.
- · Computerization of PACS and SHG.
- · Interest Waivers for Defaulters Loans.
Part II Performance Appraisal Report (PAR) as on 31.03.2018
A. Asset quality |
| Status of the Weak Area | Reasons for Weakness | Where We Want to Be | Intervention by Whom and What Method |
|---|---|---|---|
|
A. Asset Quality a. Gross NPA to Gross Advance The ratio increased from 5% to 16.12% as on 31.03.2018. The ratio remained high. |
- Natural Calamities - Loan Waiver & Interest Waiver Scheme - Severe Drought - Less effort from bank staff - No proper recovery measures |
31/03/2018 Gross NPA: 16.12% Net NPA: 14.86% 31/03/2019 Gross NPA: 14.00% Net NPA: 12.86% 31/09/2019 Gross NPA: 12.50% Net NPA: 10.00% 31/03/2020 Gross NPA: 11.00% Net NPA: 9.00% 31/09/2020 Gross NPA: 9.00% Net NPA: 8.00% 31/03/2021 Gross NPA: 7.00% Net NPA: 6.00% |
- Address natural calamities - Loan Waiver & Interest Waiver Scheme |
4 Steps to be taken for achieving the desired goals indicated in col. 3
- Nodal Officer from Head Office and DCO of each district have been made for follow up of
recovery of existing NPA and probable NPA on day today basis. - OTS scheme for settlement of loans under NFS will be formulated and launched shortly with
approval of Board and RCS.& HO staff are deputed for monitoring of recovery by branches.
Announced incentives to the societies and staff who reaches the target.
Broad guidelines issued to branches for recovery of sub standard, doubtful and loss asset in
each sector enclosed.
Probable NPA accounts by Mar 2019 are also generated in system and branches have been
advised to regularize these accounts on top priority with bare minimum addition by March
2019.
Instructions given to the CEO’s of the PACs, Bank Supervisor and concerned Managers
suitably cover all overdue cases under legal action. Civil cases are also filed against term loan
over Dues.
B. Cost Margin |
| Status of the Weak Area | Reasons for Weakness | Where We Want to Be | Intervention by Whom and What Method |
|---|---|---|---|
|
A. Cost of Management (COM) COM has increased from 1.08% to 2.09% as on 31.03.2018 over the last year. |
- COM has increased due to 6th pay arrears for the period 1/1/2017. |
As on 31/03/2019: COM: 2.00% As on 31/09/2019: COM: 1.95% As on 31/03/2020: COM: 1.90% As on 31/09/2020: COM: 1.85% As on 31/03/2021: COM: 1.80% |
- Measures to control expenses. - Efficient cost management strategies. - Monitoring and reducing unnecessary expenditure. |
4 Steps to be taken for achieving the desired goals indicated in col. 3
- Improvement of business to targeted level (W.F) and control over operational expenditure
projected cost of management will be achieved. In this regard branch wise business target
have been allocated and their achievement on monthly basis will be reviewed.
C. Growth |
| Status of the Weak Area | Reasons for Weakness | Where We Want to Be | Intervention by Whom and What Method |
|---|---|---|---|
|
A. Deposits As on 31/03/2018: 16995.00 |
- Not approaching the customer in a disciplined and proper way. - Not showing interest in deposit mobilization. - Not able to convince the customer about the deposits. - Lack of proper communication with the depositors. |
As on 31/03/2018 Deposits: 16995.00 31/03/2019: 22500.00 31/09/2019: 25253.00 31/03/2020: 28004.00 31/09/2020: 30802.00 31/03/2021: 33600.00 |
- Implementing structured customer engagement programs. - Training staff on deposit mobilization techniques. - Strengthening communication with depositors. - Providing incentives for deposit growth. |
4 Steps to be taken for achieving the desired goals indicated in col. 3
- Branch wise target as been allotted to all branches and given target and reviewed on
- monthly basis. HO staff to approach Zilla Panchayat and other Government departments for
mobilization of deposits. - Requested all PACS CEO’s to cooperate for deposit mobilization.
- New deposit and loan products will be introduced to improve the business.
- Branch wise and Staff wise target is given to improve the advance portfolio.
- Campaign for mobilization of deposit and loan sanction will be arranged during the
upcoming days and twice in a year.
Details of Non-performing Assets for the year 2017-18 and Projections for 31-03-2019, 31-03-2020 & 31-03-2021
| Particular | Actuals (2017-18) | Projection | ||||
|---|---|---|---|---|---|---|
| 31.03.19 | 31.09.19 | 31.03.20 | 30.09.20 | 31.03.21 | ||
| Total Loans & Advances o/s | 5,513,146,267.54 | 5731466860 | 3092699518 | 3092699518 | 3215170418 | 3215170418 |
| Standard Assets | 4,624,160,047 | 4807267829 | 2594001720 | 2594001720 | 2696724188 | 2696724188 |
| Sub Standard Assets | 672,853,177 | 699468216 | 377433049 | 377433049 | 392379398 | 392379398 |
| Doubtful Assets | ||||||
| D1 | 107,433,535 | 111740679 | 60295270 | 60295270 | 62682962 | 62682962 |
| D2 | 75,644,143 | 78578411 | 42400911 | 42400911 | 44079987 | 44079987 |
| D3 | 32,477,575 | 33815654 | 18246927 | 18246927 | 18969506 | 18969506 |
| Unsecured Loss | 577790 | 596073 | 321641 | 321641 | 334378 | 334378 |
| NPA Details | ||||||
| Total NPA | 888,986,220 | 802405360 | 386587440 | 278342957 | 257213633 | 192910225 |
| % of Gross NPA | 14.86% | 14 | 12.5 | 11 | 9.5 | 7 |
| Net NPA | 888,986,220 | 737066638 | 309269952 | 278342957 | 257213633 | 192910225 |
| % of Net NPA | 16.12% | 12.86 | 10 | 9 | 8 | 6 |
The Position of deposits of the Bank and projection upto 31-03- 2021 is as follows:
| Particular | Actuals (31-03-2018) | Projection (31-03-2019) | Projection (30-09-2019) | Projection (31-03-2020) | Projection (30-09-2020) | Projection (31-03-2021) |
|---|---|---|---|---|---|---|
| Total Deposit | 1,699,507,436 | 2,039,408,923 | 2,379,310,410 | 2,719,211,897 | 3,059,113,384 | 3,399,014,871 |
| Growth Rate (%) | 22.68 | 20 | 20 | 20 | 20 | 20 |
| CASA Deposit | 621,712,185 | 683,883,404 | 752,271,744 | 827,498,918 | 910,248,810 | 1,001,273,691 |
| % of CASA Deposit | 7.26 | 10 | 10 | 10 | 10 | 10 |
II. Non financial Parameters
A. Management-
Observation:
a) We are going to form all the required committees and its functioning.
b) Bank has not introduced ALM. – Now the ALM reports are generated and first such report
will be placed during first week of Jan 2019 before ALCO committee.
c) Risk management committee meeting not held – will be held regularly on quarterly basis.
The meeting will be held during first week of Jan 2019.
d) Fraud management committee not held – will be held regularly on quarterly basis. The
meeting will be held during first week of Jan 2019.
e) Improvement in the functioning of the Board takes place.
B. System and control-
Observation:
a) Introduction of branch inspection and concurrent audit will take place on regular basis.
b) Proper accounting procedure without any manual intervention will be in place.
c) Improvement in Housekeeping procedures will be taken.
d) Introduction of Grievance Redressal system will be adopted and looking over its function on
regular basis.
e) KYC and AML not updated – Circular issued to all branches with regard to KYC and KYC
compliance for old accounts is being done at branches. Branch wise progress is reviewed at
H.O. level.
f) Vigilance cell not functioning. – Vigilance cell formed. Steps will be initiated for effective
functioning of the same.
g) No fraud monitoring cell- Fraud monitoring cell will be formed and make it function
effectively.
h) Poor documentation of loan records – Steps will initiated for rectification of said deficiency
and concerned Dept have been advised to submit confirmation in this regard after branch visit.
C. Compliance –
Observation:
a) We are going to give improved compliance on NABARD inspection observations to the
NABARD.
b) Compliance officer was not appointed – Nominated compliance Officer is appointed.
c) Satisfactory compliance for audit observations will be given at regular intervals within time
frame.
d) Delay in submission of compliance- Hence forth compliance will be submitted within
stipulated time
e) Improvement will be taken place under AML-CFT.
Rating improvement
- Bank rating given by NABARD at the end of 31.03.2017 was “C” with 46.78%.
- In future we are going to take improvement actions in the field of management, systems
and controls and compliance which will provide additional marks to some extent. - By the above, the Bank will be upgraded by Grade “C” to “B” by adopting all the
improvement measures.
