With the ban on iron ore mining in the State pushing the bank deposits to an unprecedented negative growth of 11 per cent during the year 2012-13 and the non performing assets(NPAs) in the mining-related sectors too rising steadily, bankers in Goa see robust growth in agricultural lending in 2012-13 as the only silver lining for the otherwise dark clouds hovering over the banking horizon.
The agricultural lending of Goan banks has gone up to Rs.556.99 crore in 2012-13, a significant 145 per cent above State’s annual credit plan(ACP) target of Rs.384.08 crore and as against Rs.369.89 crores of ACP achievement in 2011-12.
The figures released at the quarterly State Level bankers’ Committee(SLBC) meeting held here on Friday under the lead bank State Bank of India(SBI) has brought out the contours of huge impact of the current mining banon the overall economy of the State where banks could not have been expected to be immune to.
To add to their woes of rising NPAs amounting to approximately Rs.400 crore from nearly Rs.1400 crore exposure totrucks, barges, mining machinery and other mining related small businesses andactivities, the banks showed poor achievement of 24 per cent(Rs.109crores out of Rs.464 crores projected) in non-farm sector disbursements in 2012-13. Disbursements under Other Priority Sector too was abysmally low at Rs.1314 crores, a 67 per cent achievement of annual target of Rs.1951 crore.
The overall achievement under ACP for the State was Rs.1980 crore against annual target of Rs.2800 crore, 70 per cent as against 108 per cent achievement in the immediate previous year.
Understandably, while at the SLBC meeting while the State Chief Secretary B. Vijayan tried to push for restructuring of advances to the various stakeholders of mining like transporters and barge industry, etc., the Reserve Bank of India(RBI) representatives continued to be non-committal. Regional Director, RBI, Mumbai J. B. Bhoria was present for the meeting along with Ms. Anshula Kant,SBI’s General Manager, Regional Head Office,Mumbai.
All eyes are now set on the next hearing of the Goa mining case in Supreme Court on July 7, sources in the SBI said on Tuesday.
On the agricultural front, the high rate of credit-absorption was not very surprising.State government, in recent times has been giving a major boost to farming in the hope of providing an alternative to the mining affected people. Reports coming from traditional mining areas also indicate that the agricultural land, water resources, etc.,which were hitherto devastated by mining activities have shown signs of revival thanks to closure ofmindless mining.State government’s impetus on agriculture and allied activities like dairy have shown good results with Chief Minister Manohar Parrikar declaring in the recent budget session of the State Assembly that milk production in the State has shown over 20 per cent increase owing to improved and effective implementation of its “Kamdhenu” scheme meant to procure quality milch animals to farmers. Bankers on their part have been liberal in lending through schemes like joint liability groups to overcome the fragmented land holding problem faced by the State.
A massive dip in the deposits during the financial year 2012-13 is nevertheless a cause of concern, bankers here admit.
While deposits for the first time showed a decrease of Rs.4933 crore during the previous financial year by 11 per cent, advances increased marginally by Rs.672 crores(5.7 percent) as against the projected growth of 14 per cent in deposits and 36 per cent in advances.
Goa, traditionally a high deposit State with high levels of NRI deposits too. In the absence of good credit absorption opportunities on one hand and high growth of deposits on the other, State’s Credit Deposit(C:D) ratio has perennially been a cause of concern for the bankers. While stagnationof CD ratio around 32-34 per cent for years has attracted flak from the State government to the bankers about poor deployment of funds in the State, the figures released at theSLBC meetingshowed a marginal spurt in C:D ratio, by default. A negative growth in deposits coupled with a marginalincrease in the lending last year has pushed the C:D ratio for the year 2012-13 to 31 per cent from 27 per cent in 2011-12.
According to SLBC figures, deposits of banks in Goaas on March 31, 2013, were Rs.39,661.43 crore as against Rs.44,594.84 crore in the previous year.
A senior official of the SBI associated with lead bank affairs admitted that the stoppage of mining in October last year has affected Goan economy and hence, fund inflow to banks is drying up as people particularly in many mining taluks of the State have lost incomes,and are often compelled to live on their savings.
The bankers also admit to decline in bulk deposits from entities like mining companies, Mormugao Port Trust (MPT), Goa’s major port which till recently prided itself as country’s leading iron ore exporting port.The port is struggling to diversify its cargo as the revival of mining activity and consequent exports is entirely uncertain.
Sectors dependent on mining such as the transporters, small commercial establishments and mining employees are an affected lot. State government has recently begun implementing relief package for the mining-affected people. Goa has also urged the Centre to give a special package to tide over its mining crisis. Direct loss of Rs.1200 crore per annum from iron ore royalty for the tiny State is too much of a dent to its finances, not to speak of other indirect revenue losses and overall adverse impact on its economic growth and employment situation.
The mining activity in Goa was stopped by an interim order of the Supreme Court over illegalities in miningon October 5 after a local environmental group approached the apex court demanding action on illegalities pointed out in the inquiry report submitted to the Centre by Justice(retd) M. B. Shah Commission of Inquiry.(eom)