Agriculture, Rural Banking and Priority Sector Lending in India- New opportunities and Horizons
-
Upload
manoj-rawat -
Category
Documents
-
view
69 -
download
4
description
Transcript of Agriculture, Rural Banking and Priority Sector Lending in India- New opportunities and Horizons
-
10 ISSUE-5 MAY 2015AGRICULTURE WORLD www.krishijagran.com
RBL aims to be big in Bank
Rural & Agriculture Banking Sector
RBL Bank is one of India's
fastest growing banks serving
over 14 lakh customers
through its 183 branches; and
h a s d e l i v e r e d a s t o n g g r o w t h
performance in FY 1415. One of the
notable factors responsible for the
Bank's growth has been signicant
growth in Priority Sector Lending
Business. The Bank has achieved all its
Priority Sector Lending as well as all sub
sector targets for three years in a row
including FY15. During FY 1415 the
Bank's priority sector lending was seen
at 47.86% as against mandated 40%.
The bank has been honored as Best
Bank Priority Sector Lending (Private
Sector) at Dun & Bradstreet Banking
Awards and as a Global Growth
Company by the World Economic
Forum in 2014. RBL Bank has also been
recognised as India's Fastest Growing
MidSized Bank for three years in a row
by Business Today KPMG India's Best
Bank Study.
Speaking to Agriculture World,
Manoj Rawat, Head of Agribusiness at
RBL Bank says, Agriculture, Rural
Banking and Financial Inclusion will be
next driver of growth for Indian banking
Industry. An inclusive banking system
has become a top priority to drive
growth in the country and also to
address the two key areas of concern
namely, Financial Inclusion and Food
S e c u r i t y. T h e s e t w o a re a s a re
'intertwined' and are set to drive the
next phase of economic growth of the
country which will be alot more
parcipave, broad based & inclusive.
1. What are the emerging opportuni
es for banks in Rural India?
A quiet yet sound revoluon is
taking place in rural India where
economic growth is not just about
creang wealth but also oering huge
opportunies for banks to service the
nancially excluded. Today Rural
Banking is being seen as a huge
opportunity,with rural nancial services
being one of the fastest growing
segments.
It is being increasingly recognized
that Rural Business, Agriculture
Business, Food Security, Financial
Inclusion and MSME are serious
business opportunies which can help
develop a robust Rural Business model.
The basket of products that Rural India
requires will be far more wholesome
than of Urban India. The various
segments which are going to see the
next big growth opportunity include
Agribusiness, MSME, Rural Housing,
Renewable Energy and Services.
2 . W h at i s t h e s i g n i ca n c e o f
Agriculture in the Indian economy?
Agriculture sector remains the
mainstay of the Indian economy
(although it contributes about 14% of
Riding on strong growth trajectory, Ratnakar Bank
Limited (RBL) aims to provide holistic services to farmers and
rural customers with Value Chain approach.
AEFI RBL Bank Rural & Agriculture Banking Sector aims to be big in
2015 MAY ISSUE-5 AGRICULTURE WORLD 11www.krishijagran.com
the naonal Gross Domesc Product
(GDP) as 60% of Indian families are sll
dependent on agricultural income for
livelihood. India today is the largest
producer of milk, pulses and spices. The
country alsomaintains the largest cale
herd and covers the largest area under
w h e a t , r i c e a n d c o o n . W h i l e
agriculture share in India's economy has
connued to decline due to the high
growth rates of the industrial and
services sectors, the agriculture sector's
importance in India's economic and
social wellbeing goes well beyond this
indicator.
3. What is the approach of RBL Bank
towards Agr icu l ture and Rura l
Banking?
Agribusiness credit is the most
crical nonland input in agriculture and
has played a pivotal role in increasing
agricultural producon in India.
Although Agricredit has its own
statutory signicance and generates a
strong goodwill with the Regulator and
Government, at RBL Bank we approach
this as a huge business opportunity
rather than an obligaon. We believe
Rural & Agriculture business oers huge
business potenal and can generate
sustainable economic value to the Bank,
farmers, customers and our other
stakeholders. At RBL Bank we have
idened Agribusiness and Rural
banking as one of the key areas for
growth, and a driver for expansion of
branch networks in SemiUrban and
Rural India.
The Bank adopts a vepronged
approach to increase its relevance in
Rural India
Focus on direct farmer banking requirements,
Develop innovave products and market specic schemes for
farmers and rural customers,
Tap the enre value chainincluding farmers, arsans and other players
in the dierent catchments,
I n c r e a s e o u t r e a c h t h ro u g h expansion of instuonal network
and use of technology and
Work with farmers and corporates t o fo rg e b o t h fo r w a rd a n d
backward linkages .
4. How have you modelled your
Agriculture business?
The Agribusiness for our bank has
been modelled to address the dierent
target markets in a focussed manner
across the value chain.
AEFIRBL Bank Rural & Agriculture Banking Sector aims to be big in
-
10 ISSUE-5 MAY 2015AGRICULTURE WORLD www.krishijagran.com
RBL aims to be big in Bank
Rural & Agriculture Banking Sector
RBL Bank is one of India's
fastest growing banks serving
over 14 lakh customers
through its 183 branches; and
h a s d e l i v e r e d a s t o n g g r o w t h
performance in FY 1415. One of the
notable factors responsible for the
Bank's growth has been signicant
growth in Priority Sector Lending
Business. The Bank has achieved all its
Priority Sector Lending as well as all sub
sector targets for three years in a row
including FY15. During FY 1415 the
Bank's priority sector lending was seen
at 47.86% as against mandated 40%.
The bank has been honored as Best
Bank Priority Sector Lending (Private
Sector) at Dun & Bradstreet Banking
Awards and as a Global Growth
Company by the World Economic
Forum in 2014. RBL Bank has also been
recognised as India's Fastest Growing
MidSized Bank for three years in a row
by Business Today KPMG India's Best
Bank Study.
Speaking to Agriculture World,
Manoj Rawat, Head of Agribusiness at
RBL Bank says, Agriculture, Rural
Banking and Financial Inclusion will be
next driver of growth for Indian banking
Industry. An inclusive banking system
has become a top priority to drive
growth in the country and also to
address the two key areas of concern
namely, Financial Inclusion and Food
S e c u r i t y. T h e s e t w o a re a s a re
'intertwined' and are set to drive the
next phase of economic growth of the
country which will be alot more
parcipave, broad based & inclusive.
1. What are the emerging opportuni
es for banks in Rural India?
A quiet yet sound revoluon is
taking place in rural India where
economic growth is not just about
creang wealth but also oering huge
opportunies for banks to service the
nancially excluded. Today Rural
Banking is being seen as a huge
opportunity,with rural nancial services
being one of the fastest growing
segments.
It is being increasingly recognized
that Rural Business, Agriculture
Business, Food Security, Financial
Inclusion and MSME are serious
business opportunies which can help
develop a robust Rural Business model.
The basket of products that Rural India
requires will be far more wholesome
than of Urban India. The various
segments which are going to see the
next big growth opportunity include
Agribusiness, MSME, Rural Housing,
Renewable Energy and Services.
2 . W h at i s t h e s i g n i ca n c e o f
Agriculture in the Indian economy?
Agriculture sector remains the
mainstay of the Indian economy
(although it contributes about 14% of
Riding on strong growth trajectory, Ratnakar Bank
Limited (RBL) aims to provide holistic services to farmers and
rural customers with Value Chain approach.
AEFI RBL Bank Rural & Agriculture Banking Sector aims to be big in
2015 MAY ISSUE-5 AGRICULTURE WORLD 11www.krishijagran.com
the naonal Gross Domesc Product
(GDP) as 60% of Indian families are sll
dependent on agricultural income for
livelihood. India today is the largest
producer of milk, pulses and spices. The
country alsomaintains the largest cale
herd and covers the largest area under
w h e a t , r i c e a n d c o o n . W h i l e
agriculture share in India's economy has
connued to decline due to the high
growth rates of the industrial and
services sectors, the agriculture sector's
importance in India's economic and
social wellbeing goes well beyond this
indicator.
3. What is the approach of RBL Bank
towards Agr icu l ture and Rura l
Banking?
Agribusiness credit is the most
crical nonland input in agriculture and
has played a pivotal role in increasing
agricultural producon in India.
Although Agricredit has its own
statutory signicance and generates a
strong goodwill with the Regulator and
Government, at RBL Bank we approach
this as a huge business opportunity
rather than an obligaon. We believe
Rural & Agriculture business oers huge
business potenal and can generate
sustainable economic value to the Bank,
farmers, customers and our other
stakeholders. At RBL Bank we have
idened Agribusiness and Rural
banking as one of the key areas for
growth, and a driver for expansion of
branch networks in SemiUrban and
Rural India.
The Bank adopts a vepronged
approach to increase its relevance in
Rural India
Focus on direct farmer banking requirements,
Develop innovave products and market specic schemes for
farmers and rural customers,
Tap the enre value chainincluding farmers, arsans and other players
in the dierent catchments,
I n c r e a s e o u t r e a c h t h ro u g h expansion of instuonal network
and use of technology and
Work with farmers and corporates t o fo rg e b o t h fo r w a rd a n d
backward linkages .
4. How have you modelled your
Agriculture business?
The Agribusiness for our bank has
been modelled to address the dierent
target markets in a focussed manner
across the value chain.
AEFIRBL Bank Rural & Agriculture Banking Sector aims to be big in
-
Retail Agribusiness:The Bank is leveraging on the strength of its
exisng branch network and also
some new branchesthat are being
rolled out, to expand and grow its
Agribusiness porolio. Besides
historical branches, which have
rich Agribusiness potenal, many
new branches have been idened
which oer large Agribusiness
potenal in Retail and Commodity
business. Banks oer Smart ATM
cumDebit Card on Rupay Plaorm
to its farmers under Kisan Credit
Card Scheme. Retail Agribusiness
has become one of the major
thrust areas for banks.
Wholesale Agribusiness & Value Chain Finance: The wholesale
Agribusiness and Value Chain
Finance forms an important
segment of Agribusiness which
addresses the key corporate and
instuonal relaonships in
agricultural sector to enable bulk
farmer funding deals. It works with
Sugar factories, Dairies, Plantaon
companies , Agroprocess ing
industries, Agriinput companies
etc.
Commodity Finance and Pledge Finance: Commodity Finance and
Pledge Finance to farmers against
hypothecaon of agricultural
produce (including warehouse
receipts) has been idened as
another segment for growth of
A g r i b u s i n e s s . R B L B a n k h a s
already launched Warehouse
Receipt F inancing program,
wherein credit facilies are being
extended to farmers, processors
and grader sorters, primarily based
on the underlying asset i.e. Agri
commodies. Our Bank oers
commodity nance for both
perishable and nonperishable
commodies.
R B L Bank has been oering
products to its farmers and rural
customers for Renewable Energy,
MicroIrrigaon, Hitech culvaon,
Agriwarehousing and Agrimarkeng
Infrastructure. Ourbank is working with
various innovave projects namely,
M o d e l v i l l a g e s , B e e r W a t e r
Management iniaves, Improved
C a l e M a n a g e m e n t p r o g r a m ,
Livelihood enhancement projects and
Farm mechanizaon.
5. What is key to deliver agriculture
credit to farmers?
The ow of credit to agriculture has
i n c r e a s e d s i g n i c a n t l y i n t h e
recenmes. This year the instuonal
agriculture target is more than Rs. 8
Lakh Crores.Although the amount of
agricultural credit has increased
substanally, during the last few years,
the access to formal sources of credit
has been inadequate for small and
marginal farmers (who constute for
more than 80% of the farming
community). Banks have to come up
with innovave products to address the
credit and banking needs of smaller
farmers. Our bank has a special focus on
small and marginal farmers and has
developed innovave products which
cater to the needs of these smaller
segments. We are using our Bank's
outreach program and technology
frameworks to address the banking
needs of smaller customers. It has been
our endeavor to oer a comprehensive
suite of short term & long term nancial
products to famers inorder to give them
a wholesome, aordable and ecient
banking experience.
6. What kind of framework is needed
to increase banking outreach to the
last mile in the country?
The Financial Inclusion iniaves of
the Government and Regulator to
provide access to banking services at all
villages through Branches, Ultra Small
Branches, Mobile Banking, ATM or
Kiosks or Business Correspondents at an
aordable cost is going to change the
banking landscape in India. Banks are
gearing up by upgrading the technology
infrastructure to include core banking
soluons, mobile and internet banking,
Mobile ATMs, Smart Cards with the
objecve to reduce the cost of
transacons, improve customer
Manoj Rawat
Head, Agribusiness Group, RBL Bank
hp://www.rblbank.com
Manoj Rawat is Head of
Agribusiness at RBL Bank
Limited (Formerly : The
Ratnakar Bank Limited) and
has more than 20 years
e x p e r i e n c e i n R u r a l ,
Agriculture and Financial
Inclusion.
experience and build a compeve
edge for themselves.
However, the sustainable success
of the F inancia l Inc lus ion and
Deepening iniaves will be achieved
by adopng an approach wherein all
s t a k e h o l d e r s w o r k o n t h i s
Commercially viable proposion &
Value Creaon opportunity rather
than only a Government or Regulator
driven mandate.
For banks the challenges do remain
but the willingness to move from an
o b l i ga t o r y t o o p p o r t u n i t y
approach, from Class to Mass
banking and from Exclusive to
Inclusive strategy will remain key.
Bankswill need to work High Volume
b u s i n e s s w i t h t e c h n o l o g y a n d
innovaonasthe key drivers. The
various iniaves of the policy makers,
regulator and banks in this direcon
isgoing to transform Rural India and
pave the way to achieve true & lasng
nancial inclusion and would also
contribute to creangsustainable food
and nutrional security for the country.
At RBL Bank we see Rural as the next
big opportunityas wework towards
becoming one of theadmired leaders in
this segment.
AEFI RBL Bank Rural & Agriculture Banking Sector aims to be big in
House Hold Economy of
a Farmer in India
The word farmer in the tle of
this arcle refers to the one
who actually culvates the
land and not the one who
merely owns the land. They may be
small or marginal farmers, or those who
are tenant culvators or share croppers
or agricultural labourers. In short the
term refers to all those who are
depending solely on farming for the
lively hood of their families. This paper
on the House Hold Economy of a
farmer in India, tries to highlight some
of the hidden areas of economic
situaon of the farmers in India.
THE WORD FARMER REFERS TO THE
ONE WHO ACTUALLY CULTIVATES
THE LAND AND NOT TO THE ONES
WHO MERELY OWNS THE LAND.
There are two aspects in human
life: existence and development:
existence refers to physical existence;
whereas development means both
physical and mental. In the case of
animals existence and development
refers to physical and not mental but in
the case of human beings existence and
development means both physical and
mental. For a human being existence
without development is meaningless
and development without existence is
impossible. Every human has a right to
adequate and sucient means and
materials for his physical and mental
development. Hence the rst thing we
need to keep in mind is that both
existence and development cost (cost
of living) the individual or family and
second thing is that the cost goes on
increasing year aer year if not month
aer month.
FOR A HUMAN BEING,
EXISTENCE WITHOUT
DEVELOPMENT IS MEANINGLESS
AND DEVELOPMENT WITHOUT
EXISTENCE IS IMPOSSIBLE. EVERY
HUMAN HAS A RIGHT TO
ADEQUATE AND SUFFICIENT
MEANS AND MATERIALS FOR HIS
PHYSICAL AND MENTAL
DEVELOPMENT.
Broadly the costs of living in any
f a m i l y a r e t w o t y p e s : f o o d
expenditures and non food expendi
tures. For the food consumpon the
most accepted standard for India is
what is recommended by the Indian
C o u n c i l o f M e d i c a l R e s e a r c h
(ICMR,1981) in order to ensure supply
of enough energy, proteins, 15 vitamins
and 24 minerals.
Esmaon of food expenditure
Given below is a list of food items
(Table 1) that make up the balanced diet
and the minimum average amount per
person per day in a family of six (we shall
term it as per familyhead) which is
AEFIHouse Hold Economy of a Farmer in India
2015 MAY ISSUE-5 AGRICULTURE WORLD 1312 ISSUE-5 MAY 2015AGRICULTURE WORLD www.krishijagran.comwww.krishijagran.com