The Union Finance Minister Shri Pranab Mukherjee said that one of the biggest challenges before our nation today is to ensure inclusive growth. The Finance Minister said that financial Inclusion is an important priority of the Government as only 38% (32,919) of the 87,051 bank branches of Scheduled Commercial Banks are in rural areas and only 40% (approx.) of the country’s population has bank accounts. The Finance Minister was speaking on the occasion of 106^th Foundation Day Celebrations of Corporation Bank here today.

The Union Finance Minister Shri Pranab Mukherjee said while there are about 600,000 villages in India as per the 2001 Census but there are only 32,919 rural bank branches in the country. The Finance Minister said to address this need, he had in 2010-11 directed all banks to provide appropriate banking facilities to habitations having population in excess of 2000 by March, 2012 using various models and latest technologies including branchless banking through Business Correspondents (BCs). 

The Union Finance Minister Shri Pranab Mukherjee said that the banks through the forum of State Level Banker Committees (SLBCs) have formulated their road maps for Financial Inclusion and have identified approximately 73,000 habitations having a population of over 2000 for providing banking facilities. He said that these habitations have been allocated to Commercial Banks, Regional Rural Banks and Cooperatives Banks for providing banking facilities in a time bound manner. The Union Finance Minister said that this would provide new bank accounts to around 5 crore rural households. He said that this Financial Inclusion Campaign named “Swabhimaan” aims at providing branchless banking through the use of technology. Shri Mukherjee said that Banks will provide basic services like deposits, withdrawals and remittances using the services of Business Correspondents also known as Bank Saathi.  The Finance Minister said that this initiative also enables Government subsidies and social security benefits to now be directly credited to the accounts of the beneficiaries and who would be able to draw the money through the Business Correspondents in their village itself.

The Union Finance Minister Shri Pranab Mukherjee said  Indian economy has to grow at a double digit rate in which Indian banks will have to play a facilitator and pro-active role. He said that the turf is going to be highly competitive. He said that the demands of this rapidly growing economy too are going to be very aggressive. Shri Mukherjee said one such critical area for lending remains the agricultural arena.  He said that it is heartening to note that the banks have extended the increased credit to this important sector over the years.

The Union Finance Minister Shri Pranab Mukherjee said that the Government of India had, in 2004, announced a package for doubling the flow of credit to agriculture and allied activities in a period of three years commencing from 2004-05 over the amount disbursed during the year 2003-04. The Finance Minister said that the target was however achieved in two years and has been achieved each year thereafter, by the banking system. He said that the target for the flow of agriculture credit was set at Rs.3,25,000 crore for the year 2009-10, while the Banking system actually provided Rs.3,84,514 crore as credit. For the year 2010-11, the target was fixed at Rs.3, 75,000 crore, against which the Banking system has already provided Rs.2, 91,142 crore as credit as on 31^st December, 2010, the Minister added. The Finance Minister Shri Mukherjee said the target of credit flow to the farmers has been raised to Rs.4,75,000 crore in 2011-12.  Banks have been asked to step up direct lending for agriculture and credit to small and marginal farmers, he added.

The Union Finance Minister Shri Pranab Mukherjee said since 2006-07, Government of India is also providing Interest Subvention to all Public Sector Banks(PSBs), Regional Rural Banks(RRBs) and Cooperative Banks for short term crop loans upto Rs 3 lakh, so as to ensure that short term agriculture credit is available at 7% p.a. to farmers. In 2010-11, an additional 2% interest subvention is being provided to those farmers, who repay their short term crop loans in time, the Finance Minister added. Thus, the short term crop credit is available to farmers @ 5% p.a. in 2010-11.  The Finance Minister Shri Mukherjee said in the year 2011-12, the Interest Subvention Scheme proposes to further incentivize prompt repayment by farmers by providing a further incentive of 3% intense interest subvention, i.e., loans will be available to farmers who pay on time @ 4% p.a.

The Union Finance Minister said that he is happy to note that to include the financially excluded rural populace to the main stream banking, the Corporation Bank has launched the Branchless Banking project using the cost effective ICT technologies and engaging the services of Business correspondents. Shri Mukherjee said that the rural people would thus be empowered to have access to banking services without having to spend their time to visit a branch to transact banking business. He said that the Bank has opened 1700+ Corp Grameen Vikas Kendras in the country. On this auspicious occasion of 106th Foundation Day of the Corporation Bank, the Union Finance Minister Shri Pranab Mukherjee announced the  inauguration of the Bank’s  Heritage and Financial Research Centre at Udupi  which will house, Numismatic Museum, Notophily Museum  and an exclusive section dedicated to contribution of past and present luminaries in the field of Indian Banking and Finance. 

Text of the Speech of Hon’ble Finance Minister made on the occasion is given below:

It is my pleasure to be with you all on this occasion of Founder’s Day Celebrations of Corporation Bank.

Corporation Bank is one of the oldest banks in India.  The Bank was the first bank to be opened in South Kanara district of Karnataka State. The  Bank was  founded  on 12^th  March 1906            at  the pilgrim  town  of Udupi  by   a great philanthropist  Khan Bahadur  Haji Abdullah Haji Kasim Saheb Bahadur, and other 11 likeminded people.     When Mahatma Gandhi visited Mangalore on 19^th August 1920 and addressed a public meeting in the city, it was presided over by Haji Abdullah Saheb.   

The bank was opened with a swadeshi fervor and had an initial capital of Rs. 5000 only.

Corporation Bank was included in the second schedule of the RBI act in 1934 and Nationalised in 1980. It was quick in adapting to the financial sector reforms and in 1997, it became the Second Public Sector Bank in the country to enter capital market, the IPO of which was over- subscribed 13 times.

Coming to the banking and financial landscape, if we see at a macro level, the Global economy is recovering from what most observers agree was the worst financial and economic crisis since the Great Depression of 1930s. Forecasts indicate that global growth may remain moderate for some more time, especially in advanced economies where, a number of structural problems such as overstretched household and bank balance sheets and un-employment remain to be addressed, and the banking and securitization markets have still to turn the corner. Coming to the Indian context, the Indian economy has truly come of age. An average high GDP growth rate, somewhat low last year though in the face of the global crisis, is indicative of changes in the structural pattern and not of any mere cyclical phenomenon. The BRIC countries are perceived to be forging ahead at rates much faster than other developed countries. The total domestic credit of these emerging economies is predicted to overtake many of the developed countries in years to come.  At home, if the Indian economy has to grow at a double digit rate, Indian banks will have to play a facilitator and pro-active role. The turf is going to be highly competitive. The demands of this rapidly growing economy too are going to be very aggressive. One such critical area for lending remains the agricultural arena.  It is heartening to note that the banks have extended the increased credit to this important sector over the years.

The Government of India had, in 2004, announced a package for doubling the flow of credit to agriculture and allied activities in a period of three years commencing from 2004-05 over the amount disbursed during the year 2003-04. The target was however achieved in two years and has been achieved each year thereafter, by the banking system. The target for the flow of agriculture credit was set at Rs.3,25,000 crore for the year 2009-10, while the Banking system actually provided Rs.3,84,514 crore as credit. For the year 2010-11, the target fixed at Rs.3, 75,000 crore, against which the Banking system has already provided Rs.2, 91,142 crore as credit as on 31^st December, 2010. The target of credit flow to the farmers has been raised to Rs.4,75,000 crore in 2011-12.  Banks have been asked to step up direct lending for agriculture and credit to small and marginal farmers.

Since 2006-07, Government of India is also providing Interest Subvention to all Public Sector Banks, Regional Rural Banks and Cooperative Banks for short term crop loans upto Rs 3 lakh, so as to ensure that short term agriculture credit is available at 7% p.a. to farmers. In 2010-11, an additional 2% interest subvention is being provided to those farmers, who repay their short term crop loans in time. Thus, the short term crop credit is available to farmers @ 5% p.a. in 2010-11. In the year 2011-12 the Interest Subvention Scheme proposes to further incentivize prompt repayment by farmers by providing a further incentive of 3% intense interest subvention, i.e., loans will be available to farmers who pay in time @ 4% p.a.

One of the biggest challenges before our nation today is to ensure inclusive growth. Financial Inclusion is an important priority of the Government as only 38% (32,919) of the 87,051 bank branches of Scheduled Commercial Banks are in rural areas and only 40% (approx.) of the country’s population has bank accounts. While there are about 600,000 villages in India as per the 2001 Census there are only 32,919 rural bank branches.

        To address this need, I had in 2010-11 directed all banks to provide appropriate banking facilities to habitations having population in excess of 2000 by March, 2012 using various models and technologies including branchless banking through Business Correspondents (BCs). 

Accordingly, the banks through the forum of State Level Banker Committees have formulated their road maps for Financial Inclusion and have identified approximately 73,000 habitations having a population of over 2000 for providing banking facilities. These habitations have been allocated to Commercial Banks, Regional Rural Banks and Cooperatives Banks for providing banking facilities in a time bound manner. This is estimated to provide new bank accounts to around 5 crore rural households. This Financial Inclusion Campaign named “Swabhimaan” aims at providing branchless banking through the use of technology.  Banks will provide basic services like deposits, withdrawals and remittances using the services of Business Correspondents also known as Bank Saathi.  This initiative also enables Government subsidies and social security benefits to now be directly credited to the accounts of the beneficiaries and who would be able to draw the money from the Business Correspondents in their village itself.

I am happy to note that to include the financially excluded rural populace to the main stream banking, the Corporation Bank has launched the Branchless Banking project using the cost effective ICT technologies and engaging the services of Business correspondents. The rural people are, thus empowered to have access to banking services without having to spend their time to visit a branch to transact banking business. The Bank has opened 1700+ Corp Grameen Vikas Kendras in the country.

 On this auspicious occasion of 106th Foundation Day of the Corporation Bank,  I announce the  inauguration of the Bank’s  Heritage and Financial Research Centre at Udupi  which will house, Numismatic Museum, Notophily Museum  and an exclusive section dedicated to contribution of past and present luminaries in the field of Indian Banking and Finance. 

I wish the CMD & all employees of Corporation Bank every success in their future endeavours for the glorious role of Corporation Bank in Indian Banking.

        Thank you.