Dear Sir/ Madam,
The Advisory Committee on Flow of Credit to Agriculture
and Related Activities from the Banking System
Please refer to our circular RPCD.Plan.BC.40/04.09.01/2004-05
dated October 15, 2004 communicating some of the accepted recommendations
of the above Committee set up under the chairmanship of Prof. V.S. Vyas. The
following recommendations have since been accepted and are being forwarded for
immediate implementation by banks:
i) A branch advisory committee comprising
select elected representatives, including women leaders, of local panchayati
raj institutions within the service area of the branch, may be established
at every rural branch. It should meet at least once a quarter. These meetings
may be made mandatory and be attended by the controlling official of the bank.
(Paragraph 6.5(v))
- Banks may consider constituting local advisory committees
for branch/group of branches comprising some users of the bank’s services
as members.
ii) Banks in states where the SHG-Bank linkage
programme has not shown satisfactory progress need to gear up their rural branches
for facilitating bank linkages of SHGs by evolving a three-year action plan.
All banks may set up adequately staffed micro-finance cells at central offices
and in each state.
[Paragraph 6.12]
- Banks may consider setting up micro-finance cells at their
Central Offices.
iii) As the quality of books of accounts maintained
by SHGs is an area of concern, banks may encourage using local book writers
in association with concerned agencies promoting these SHGs. Such an arrangement
could be on a cost-sharing basis, with some support from banks.
[Paragraph 6.15]
- Banks may consider the recommendation for implementation.
2. Banks are requested to initiate action on
these recommendations immediately and ensure that suitable instructions are
issued to their controlling offices and branches in this regard. The action
taken may please be communicated to us at the earliest.
3. Please acknowledge receipt.
Yours faithfully
(C.S.Murthy)
Chief General Manager-in-Charge