CHAPTER 4

SOCIAL BANKING
- A CASE STUDY

Bank of India is a bank with headquarters in Mumbai. It is one of

the India’s leading with about 2645 branches including 24
branches outside India. Bank of India is a founder’s member of
SWIFT. Bank carries out many banking activities such as
facilitating saving bank account, fixed deposit account for number
of people for their saving purpose. These activities are the basic
transactions to be done by the bank.

Apart from these activities, bank also provides social banking

services. The Bank has been supporting the task of nation building
by implementing varied polices/guidelines of the Government with
clear objectives. As against the benchmark of 40% prescribed by
Reserve Bank of India under Priority Sector to Net Adjusted Credit,
the Bank’s achievement is consistently over 45% for the last 5
years. The Bank has achieved business level of Rs. 16,800 crores
as on February 2005, under priority sector.

Keeping in view the rich past experience and in tune with the
Government of India/Reserve Bank of India guidelines, the Bank is
adopting innovative and growth oriented administrative policy
measures. Focused attention is given to build a loyal band of
customers in Rural & Semi-urban areas where the Bank has more
than 67% of its Branch Network. This has enabled development of
individuals, a village or even the given area by increased
production and productivity, through smooth flow of credit.

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 The Bank has, of late, launched innovative schemes/card products
with defined objectives and refined methodology. The various
innovative schemes/card products are:
i. Star Composite Cash Credit (CCC)
ii. Kisan Credit Card (KCC)
iii. Kisan Gold Card (KGC)
iv. Star Kisan Samadhan Card (KSC)
(CCC, KCC & KGC are now subsumed into KSC)
v. Star Bhoomiheen Kisan Card (BKC)
vi. Star Artisan Credit Card (ACC)
vii. Laghu Udhyami Credit Card (LUCC)
viii. Star SSI – Suprime
ix. Laghu Udhyami Trade Card (LUTC)
x. Star Swarojgari Credit Card (SCC)
xi. Star Medi-Mobile
xii. Star Kisan Vahan
xiii. Small Road Transport Operators (SRTO)
xiv. Star Home Loan Scheme
xv. Star Education Loan Scheme

KISAN SAMADHAN CARD:

• INTRODU
CTION:
a) Kisan Samadhan Card scheme is based on
‘Line of Credit’ concept and each farmer is provided with a
package of ‘Kisan Samadhan’ which would enable
farmers to avail short term and long term credit for a
period of maximum 5 years continuously with rollover
arrangements.

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 b) Kisan Samadhan Card will replace Kisan
Suvidha Card and Kisan Gold Card.

• OBJECTIVES:
a) To meet/cover the entire credit needs of the
farmer both of short term and long term nature for a
period of maximum 5 years not only for farming alone but
also for allied activities, repairs and maintenance of farm
equipments, consumption needs, purchase of consumer
durables, etc. This shall be in addition to the loans for
housing and vehicles.

b) To bring about flexibility and operational

freedom in credit utilization.

• ELIGIBILITY:
a) All farmers eligible for Kisan Credit
Card would be eligible for Kisan Samadhan Card.

b) Farmers seeking facilities under

Kisan Samadhan Card must avail production credit and
investment credit.

• PURPOSE:
A. Production Line of Credit:
a) Production of crops
– Loan amount will depend upon type of crop, area under
cultivation and scale of finance.

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 b) Short term
requirements like maintenance of tractor/farm implements,
allied activities like dairy, poultry, cost of feed, annual
repairs, fuel, etc.

c) Short term credit

for consumption/domestic needs to the extent of
maximum 25% of gross estimated income of the farmer or
20% to 25% of scale of finance or maximum loan
Rs.50,000/=, whichever is lower.

d) Finance against
storage receipts/produce marketing – maximum upto 50%
of the price of the produce prevailing at the time of
storage/sanction of loan and maximum loan limit should
not exceed Rs.10 lakhs per farmer.

B. Investment Line of
Credit:
a) Extending loan for
investment on farm developments such as development
of land/irrigation facility, purchase of
machinery/equipments, draught animals/carts, transport
vehicles, pre/post harvesting processing equipments and
practicing modern/Hi-tech Agriculture with need based
project/farm infrastructure, plantation activities, etc.

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 b) Extending loan for
allied activities like dairy, poultry, fisheries, piggery,
sericulture, etc. to supplement farm income/activities and
also to ensure optimum utilization of available resources.

c) Extending loans for

off-farm activities/needs of the farmer like personal loans
including purchase of consumer durables – Maximum
Rs.1 Lakh.

• QUANTUM
OF FINANCE:
The quantum of loan limit will be computed based on
income of the farmer and value of securities to be charged
in the account as furnished below:

a) 10 times of
anticipated net annual income from the farm (average for
next five years) taking into consideration the type of crops,
area under cultivation, and scale of finance and including
income from proposed new activities/allied activities.
“OR”
b) 100% of value of
land mortgaged as collateral security and other securities
like assignment of LIC Policy (Surrender value), pledge of
NSCs/Bank’s TDRs/Gold ornaments (WHERE MOVABLE
ASSETS ARE CREATED OUT OF BANK FINANCE).
“OR”

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 c) 70% of value of
land mortgaged as collateral security and 100% value of
other securities like assignment of LIC Policy (Surrender
value), pledge of NSCs/Bank’s TDRs/Gold ornaments
(WHERE MOVABLE ASSETS ARE NOT CREATED OUT
OF BANK FINANCE).
- Either (a) or (b) whichever is lower, where movable assets
are created.
- Either (a) or (c) whichever is lower, where movable assets
are not created.

• SANCTIONING AUTHORITY:
Proposal should be submitted for consideration of
appropriate authority in whose delegation the sub-limit
(Production Credit and Investment Credit) / aggregate limit
falls, as per extant guidelines on Delegation of Powers.

• MARGIN:
a) For regular production line of credit limit, no specific
margin is prescribed and limit is to be made available to
the farmers as regular Cash Credit facility.

b) On investment credit, 15 to 25% margin of total

cost/investment is to be contributed. In deserving cases,
10% margin may be allowed.

c) The RBI norms on margin should be strictly adhered to.

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 •TECHNICAL FEASIBILITY / FINANCIAL VIABILITY:
Since the limit is decided on the basis of value of security
and projected average annual farm income, Branches should
assess the farm income critically.
a) Once the overall
limit vis-à-vis borrower’s repaying capacity is assessed,
choice in priorities of investments based on the farmer’s
own felt needs be allowed.

b) The Branches
should extend need based guidance to the farmers as and
when sought for.

c) In case of
investment project with larger financial outlays, borrowers
may be advised to take prior clearance from the Branch
for the same.

• SECURITY:
a) Hypothecation of
standing crops, already owned movable assets and
assets to be created out of Bank’s finance.
b) Charge on land
under Agricultural Credit Act/mortgage of land/ collateral
security or third party guarantee of adequate worth, if
necessary.

STAR BHOOMIHEEN KISAN CARD:

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 • OBJECTIVE:
The main objective of Star Bhoomiheen Kisan Card (Star
BKC) is to provide easy access to short term production and
consumption credit to meet genuine requirements of tenant
farmers, share croppers and oral lessees to help increase
their income from agriculture production activities.

• ELIGIBILITY:
a) Under the scheme, Branches may issue Star BKC to
the tenant farmers, share croppers and oral lessees who
are otherwise eligible for sanction of short term credit for
crop production.

b) The applicant should come from the operational area of

the Branch sponsored by an SHG or a Farmers’ Club or a
reputed NGO who is on the approved list of NABARD.

c) Branch Manager to ascertain eligibility by calling

meeting of SHG / Farmers’ Club / NGO in the village itself
and the same should be incorporated in the pre-sanction
inspection report.

d) Migratory tillers are not eligible under the scheme.

• IDENTIFICATION:
The applicant must come from the service area of the Branch
and his identity should be verified through one or more of the
following sources:
i) Documents related to house of the applicant

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ii) Ration Card and
iii) Voters’ list / Identity card.

• PURPOSE:
Purchase of improved seeds, manures and fertilizers, plant
protection materials, payment of hire charges for tractors,
irrigation charges, electricity charges etc. and also meeting
part of consumption needs.

QUANTUM OF FINANCE / LIMIT:

a) Based on land area taken on tenancy for share

cropping or on oral lease and scale of finance, maximum

Rs.24, 000/-. Additional Rs.1000/- for consumption needs.

b) Upon satisfactory conduct of the account for three

years, the limit may be enhanced, if requested by the card
holder.

ISSUE OF CARDS:
a) The farmers under the scheme will be issued a credit
card-cum-pass-book incorporating the name, address,
borrowing limit/sub-limits, validity period, etc. to facilitate
recording of the transactions on an on-going basis. The
pass book, among others, would provide for a passport
size photograph of the beneficiary.

b) The beneficiary farmer should produce the passbook

while operating the account

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 c) The card-cum-pass book in use for KCC is to be used
for Star BKC. However, a seal inscribing ‘Star BKC’ is to
be put on the face of the pass-book.

• SANCTIONING AUTHORITY:

As per delegation of powers.

• TYPE OF FACILITY:
Revolving Cash Credit – Annual Review. The farmer should
be allowed for any number of drawals and repayment within
the limit.
a) The review may result in continuation of the facility,
enhancement of the limit or cancellation of the limit /
withdrawal of the facility, depending upon the
performance of the borrower.

b) The aggregate credits into the account during the 12

months period should atleast be equal to the maximum
outstanding in the account.

c) No drawal in the account should remain outstanding

for more than 12 months in case of normal crops and 18
months in case of sugarcane and banana crops.

d) In case of reschedulement of the period of repayment

on account of natural calamities affecting the farmer, the

period for reckoning the status of operations as
satisfactory or otherwise would get extended together with

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 the extended amount of limit. When the proposed
extension is beyond one crop season, the aggregate of
debits for which extension is granted should be
transferred to a separate term loan account with
stipulation for repayment in installments as per existing
guidelines.

e) As a measure of incentive for card holders with good

performance, the Branches may at the time of review,
enhance the credit limit suitably to take care of increase in
cost of inputs / labour, change in cropping pattern, etc. but
upto the maximum limit of Rs.25,000/-.

f) On credit balance in the Cash Credit account, interest

at the rate and rule of Savings Bank is to be paid to
encourage the borrower to deposit the surplus funds at
the time of harvest and marketing of produce.

• MARGIN:
Nil

SECURITY:
a) P. Note

b) CHA – 1

• DISBURSEMENT / OPERATION IN THE

ACCOUNT:

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a) The issuing Branch would maintain the
ledger account in respect of each Star BKC account and
all the operations in the account will be through issuing
Branch.

b) The card holders should be allowed to draw

cash of the total sanctioned limit as per their requirement.

c) Withdrawal in the Star BKC account will be

through withdrawal slip specially printed for the purpose
(green colour already in use for KCC).

d) At the time of withdrawal and deposit, the

beneficiary should present the passbook for recording the
transaction.

e) Though drawals in the account are

expected as per seasonality of the crops / sub-limits, yet,
some flexibility may be allowed to enable the farmer to
purchase inputs at convenient time when availability /
prices are favourable.

f) Submission of invoices / quotations should

not be insisted upon as limit / sub-limits are expected to
be used on the basis of scale of finance.

CROP INSURANCE:
a) Crops financed should be insured as required by law or
as covered under various schemes.

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 b) Crop Loan portion of the finance should be covered
under the Rashtriya Krishi Bima Yojana (RKBY) of the
Agriculture Insurance Company of India Ltd. (AIC).

c) Insurance premium should be debited to the relative

loan account and claims if any be credited to the
beneficiary’s account promptly.

BOI Artisan Credit Card (ACC) :

a) Purpose
To provide adequate and timely assistance to artisans to
meet their credit requirements both investments needs as
well as working capital. Investment loans for purchase of
tools/ Equipments by way of Demand Loan/Term Loan
with appropriate repayment schedule. The Scheme would
be applicable both in rural and urban areas.

b) Eligibility
All existing artisan borrowers of the bank enjoying credit
limits upto Rs.2 lakhs and having satisfactory dealings
with the bank. All artisans involved in production/
manufacturing process. Preference would be given to
artisans registered with Development Commissioner
(Handicrafts).Thrust in financing on cluster of artisans and
artisans who have joined to form Self-Help Groups
(SHGs). Beneficiaries of other Government Sponsored
schemes are not eligible.

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 c) Issue of cards
A Photo Identity Card with sanctioned limit, validity period
of credit facilities along with a passbook incorporating
Name, Address, Borrowing Limit, Validity Period, etc. will
be issued.

d) Maximum Limit
Rs.2 lakhs per borrower.

e) Security
Hypothecation of Assets created out of Bank Finance.

f) Margin
Upto Rs.25, 000/- : Nil above Rs.25, 000/- : 20% to 25%

g) Validity/ Renewal of limits

Limit valid for 3 years subject to annual review. Annual

review without asking financial statements from the
borrower but based on assessment of performance by
field inspection.

BOI- Laghu Udyami Credit Card (LUCC) :

a) Eligibility
All existing customers under SSI sector who are having
satisfactory dealings for last 3 years and enjoying
loan/operation limit upto Rs.2 lakhs.

b) Purpose

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 To meet the credit requirements of Small Scale Industries
and Tiny Sector

c) Assessment of credit
For assessing working capital requirement, 20% of
anticipated turnover will be taken into consideration, as
Nayak Committee recommendations.

d) Margin - 25%

e) Validity

Limit sanctioned under LUCC will be valid for 3 years

subject to satisfactory conduct of account.

Kisan Swarojgar Credit Card Scheme (SCC):

The Government of India introduced the Kisan Credit Card
(KCC) scheme in 1999.

a) STAR HOME LOANS:

Provides loans to purchase a Plot for construction of a
House, to purchase/ house/ flat, as well as for renovation/
repair/ alteration/ addition to house/ flat, furnishing of
house.
Maximum loan amount is Rs.300 lacs and repayment
ranges upto 20 years, with reasonable margin and
nominal processing charges. No commitment/
administrative charges.

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The loan is available at very competitive rates of interest,
currently available in the industry. Option for different EMI
amounts for different periods during tenure of loan to suit
customer’s repayment capacity.

b) Prepayment of Loan permitted

Interest is calculated on daily balance basis which is of
great advantage to customer as it results in lower interest
amount.
Loan to NRIs as well as Persons of Indian Origin.
Simplified application form/ procedures for convenience of
customers, and speedy approvals. Free Personal
Accident Insurance cover. Life Insurance Cover to
borrowers for Loan Protection (optional).

According to a recent survey report, over 65 million KCCs

had been issued by early 2007.This credit, typically,
covers the working capital needs of the farmers for a crop
cycle. One can borrow the money when they need to buy
inputs such as seeds, tools, fertilizer, pesticides and
labour. Once the crop is harvested and sold, the amount
has to be repaid. The credit becomes available again for
the next season. This helps the farmers to avoid
traditional money lenders and the exorbitant interest rates
charged by them.

In 2004 this scheme was expanded to cover more types

of loans:

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 Term loans for agriculture and allied activities. A
reasonable component to meet consumption needs .Many
banks also offer Personal Accident Insurance Scheme at
a very nominal premium. Some of the banks have
launched KCCs that can be used in an ATM machine. The
Swarojgar Credit Card Scheme (SCC) was introduced in
2003. The SCC aims at providing working capital and
term loans to small artisans, handloom weavers,
fishermen, self employed persons, rickshaw owners, other
micro-entrepreneurs, self help groups (SHG), etc. Farm
sector activities like fisheries, dairy, etc., can also be
covered under the scheme. About half a million SCCs had
been issued by Sept 2006.
One can get a Kisan Credit Card or a Swarojgar Credit
Card from any of the following:
Commercial banks
Co-operative banks
Regional Rural Banks (RRB)

Star Education loan that cares for careers:

a) OBJECTIVE & PURPOSE:

The Star Educational Loan Scheme aims at providing
financial support from the bank to deserving/ meritorious
students for pursuing higher education in India and
abroad. The main emphasis is that every meritorious
student is provided with an opportunity to pursue
education with the financial support on affordable terms
and conditions.

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 b) ELIGIBILITY CRITERIA:

i) STUDENT'S ELIGIBILITY:
Should be an Indian National; secured admission to
professional/technical courses in India or Abroad
through Entrance Test/Merit based selection process.
Good academic career. The student should not have
outstanding education loan from any other Institution.
Father/Mother should be co-borrower. Branch nearest to
the permanent residence of student will consider the
loan.

ii) ELIGIBLE COURSE:

a) Studies in India (Indicative list):

Graduation courses: BA, B.Com. B.Sc. etc.
Post Graduation courses: Masters & Phd.
Professional courses: Engineering, Medical,
Agriculture, Veterinary, Law, Dental, Management,
Computer, etc.

Computer certificate courses of reputed institutes

accredited to Department of Electronics or institutes
affiliated to university. Courses like ICWA, CA, CFA,
etc. Courses conducted by IIM, IIT, IISc, XLRI, NIFT,
NID and other Institutes set up by Central/ State Govt.
Evening courses of approved institutes. Other courses
leading to diploma/ degree, etc. conducted by colleges/

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 universities approved by UGC/ Govt./ AICTE/ AIBMS/
ICMR, etc. Courses offered by National Institutes and
other reputed private institutions with prior approval of
Head Office. Courses offered in India by reputed
foreign universities with prior approval of Head Office.

b) Studies abroad:
Graduation: For job oriented professional/ technical
courses offered by reputed universities.
Post Graduation: MCA, MBA, MS, etc.
Courses conducted by CIMA - London, CPA in USA,
etc.

iii) EXPENSES CONSIDERED FOR LOAN :

Fee payable to college / school/ hostel/ Examination/
Library/ Laboratory fee. Purchase of books/
equipments/ instruments/ uniforms. Caution deposit/
building fund/ refundable deposit supported by
Institution bills/ receipts. Travel expenses/ passage
money for studies abroad. Purchase of computers -
essential for completion of the course. Insurance cover
for the student. Any other expense required to
complete the course - like study tours, project work,
thesis, etc.

iv) QUANTUM OF FINANCE :

Need based finance subject to repaying capacity of the
parents/students with margin and the following ceilings:
Studies in India - Maximum Rs.10.00 lakh

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 Studies abroad - Maximum Rs.20.00 lakh.

v) MARGIN :
Upto Rs.4 lakh: Nil

Above Rs.4 lakh - Studies in India: 5%

Studies Abroad: 15%

• Scholarship could be included in margin.
• Margin to be brought in on year to year
basis as and when disbursements are
made.

vi) SECURITY:
Upto Rs. 4 lakh : No security

Above Rs.4 lakh & upto Rs.7.5 lakh: Collateral security

in the form of a suitable third party guarantee.

Above Rs.7.5 lakh: Collateral security of suitable value

or at the discretion of the Bank suitable third party
guarantees along with the assignment of future income
of the student for payment of installments.

vii) RATE OF INTEREST:

• Upto Rs.4.00 lacs – 2.50% below BPLR, Min
9.50% p.a.
• Above Rs.4.00 lacs upto Rs.7.50 lacs – 2.00%
below

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 BPLR, Min 10.00% p.a.

• Above Rs.7.50 lacs - 1.25% below BPLR, Min.

10.75% p.a.
• Simple interest during the repayment
holiday/moratorium period. Penal interest @2% for
loans above Rs.4 lakh for the overdue amount and
overdue period.
• Interest Concession of 0.50%p.a. for woman
beneficiaries for limits upto Rs.50,000/- and 1% for
limits over Rs.50,000/-.
• 1% int. concession if interest is serviced during
moratorium period, where repayment holiday is
specified for interest/repayment under the scheme
(concession available for moratorium period)

No processing charges. One time charges for any

deviations from the scheme norms including approval
of courses outside the scheme

Upto Rs.4.00 lacs - Rs. 500/-

Over Rs.4.00 lacs upto Rs.7.50 lacs - Rs.1000/-

Over Rs.7.50 lacs upto Rs.20.00 lacs - Rs.2000/-

In respect of loans availed by borrowers from rural
areas from the Rural Branches – Charges Nil

viii) INSURANCE:

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 All the student borrowers are offered a specially
designed Term Insurance cover and the premium can
be included as an item of finance.

ix) REPAYMENT:
Repayment holiday/Moratorium: Course period + 1
year or 6 months after getting job, whichever is earlier.
The loan is to be repaid in 5-7 years after
commencement of repayment.

x) BANK CHARGES:
Processing/upfront For Studies in India- NIL.
charges For Studies Abroad -Rs.1000 for
issuance of sanction letter for
obtention of VISA.
Amount refundable on availing loan.
Document/ Stamp At Actual
Charges
Change of Studies in India – Rs.250/-
Institution Studies Abroad- Rs.500/-
Agreement(copy to Loan upto Rs.2 lacs- Rs. 25/-
borrower) Xerox Loan over Rs.2 lacs- Rs.100/-
charges Plus copying charge of Rs.1 per page
(TABLE 4.1)
xi) OTHER
CONDITIONS:
i) Loan to be disbursed in stages as per requirement /
demand, directly to the Institution/ Vendors of
books/equipments/instruments to the extent possible;

22
 ii) Student to produce mark list of previous term/semester
before availing next installment ;

iii) Student / Parent to provide latest mailing address, in

case of any change;

iv) Student /Parent to inform Branch immediately on

change of course /completion of studies/termination of

studies/ any refund of fees by college /institution
/successful placement /obtention of job/change of job
etc. On Line facility available for submission of
application, tracking of application status and resume
completion of incomplete application.

GREEN REVOLUTION
“WHEN THE GOING GETS TOUGH, THE TOUGH GET GOING”
Indian economy being agrarian one, its growth mainly depends on
performance of agriculture. In early sixties the country witnessed
wide spread, severe drought successively which coupled with war
with China in 1962 and Pakistan in 1965 and forced India to import
food grains. This had a severe impact on the overall
developmental efforts. Self-sufficiency in food, found an answer
in the Green Revolution and as a first step High Yielding Varieties
(HYV) programme was launched. Number of new High Yielding
Varieties initially of staple food crops like Rice, Wheat, Jowar etc.
were developed which gave impetus to the development of
number of High Yielding hybrids of various crops.
Bank of India made foray in rural development in the year 1968 i.e.
concomitant to onset of Green Revolution. The bank exhibited its

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involvement in rural development with all vigour. The bank
extended a helping hand in right earnest to progressive farmers for
raising High Yielding Varieties (HYV) of crops and production of
hybrid seeds through delivery of timely credit by way of crop loans.
It has been a long path breaking journey of over three decades,
which started with attempts to finance particular crops being grown
in different locations of the country under the guidance of some
progressive farmers or a group of farmers or under the aegis of
developmental organizations. Now the Bank has reached a stage
where the crop loan disbursements up to March 2005 have
surpassed Rs.1200 crore. To achieve this, 350 exclusive Crop
loan financing branches have been identified. Location-wise and
Crop-wise ready reckoners are being provided to the branches to
facilitate crop loaning on massive scale in the shortest possible
time. The bank is happy that they have contributed their mite in the
good performance of the country. India has not only achieved self-
sufficiency in the production of food grains but has emerged as the
second largest producer of fruits and vegetables in the world. It is
now vying for exports. Bank has left its imprints in this exercise of
increased production and productivity of various farm products,
their preservation, processing for value addition, storage and
ultimately for marketing for fetching a better price to the farmers.

WHITE REVOLUTION
"SUCCESS IS A JOURNEY NOT A DESTINATION"
Milk requirement of bigger cities was met through import of milk
powder from New Zealand and USA. In 1970 began the era of
"Operation Flood" which is also known as "White Revolution." The
Bank started financing farmers for crop loans in 1968. As the crop

24
loan borrowers became familiar with our branches, a need was felt
to initiate steps to increase their income through systematic
development of traditional non-farm activities like dairy, poultry etc.
The schemes of lending for allied activities like dairy and poultry
were developed. Farmers were educated to create regular source
of income, to take care of the maintenance expenditure of the farm
and the family through popularization of Dairy Development
schemes. It was with this idea that the model of financing two
milch cattle was developed for farmers.The branches made
systematic attempts to procure high yielding milch cattle from
renowned centres. The efforts were further supplemented when
voluntary organizations like Bharatiya Agro Industries Foundation
(BAIF) launched a massive project in Western India particularly in
the State of Maharashtra for cross breeding of animals with
Artificial Insemination (AI). This scheme was assisted with supply
of feed for rearing of the female calf (heifer) till it attained puberty.
The large number of crossbred animals was, therefore,
successfully nurtured with the Bank's financial assistance to
increase the production of milk per cow from the meagre 500 ml to
minimum 6-7 litres per day in the first lactation itself. The
genetically improved livestock was the source of strength for the
farmers and his family.

Bank of India through its Lead Bank network prevailed upon the
developmental authorities to establish milk collection societies and
milk routes. These efforts were made to ensure that the milk being
produced in these villages in the service area of the Bank's
branches is definitely collected and then transferred to chilling
plants and thereafter to bigger cities for marketing. The Bank

25
financed large number of beneficiaries, even farm labourers for
development of livestock through this program. It also encouraged
establishment of commercial dairies. The Bank is associated with
the development of large dairies like Warana Dairy near Kolhapur
in the co-operative sector, besides number of commercial dairies
in private sector. Bank of India, with present outstanding exposure
of Rs.246.99 crores involving 84,787 farmers is proud of its active
participation in the White Revolution and "Operation Flood I & II"
which has resulted in transformation of our country from importing
of milk powder to attaining the premiere position in production of
milk in last three decades.

POULTRY
"Achievers don't need to be egged on; they go all out and
succeed"
Bank of India is associated with the development of Poultry since
long. Bank had started financing the Poultry farmers when poultry
was adopted as backyard farming for 100-500 birds and
equipments under deep litter system. Large numbers of rural
youths were gainfully employed in poultry farms financed by the
Bank. Later the Bank associated itself with the commercial giants
in poultry like VHL/GODREJ/INDIAN POULTRY GROUP, etc. The
Bank has also financed environmentally controlled Hi-Tech state-
of-the-art poultry projects from Madhya Pradesh, Maharashtra,
Uttar Pradesh, Chandigarh, Andhra Pradesh, Karnataka etc.
where even 5 lakh birds are being reared. The Bank has been
instrumental in development of Integrated Poultry projects
involving rearing of grand parent/parent stock, production of day
old chicks, rearing of broiler birds in environmentally controlled

26
conditions, their scientific feeding and watering, ultra-modern
veterinary care and ultimately hygienic processing, packing and
marketing of various poultry products at affordable rates to the
consumers.
Despite diverse food habits and preference for vegetarian diet, due
to concerted efforts by National Egg Co-ordination Committee
(NECC) the production of eggs has reached a level of 34 billion
per annum taking India to the fourth position in the world. The
production and consumption of poultry meat is yet to get the
desired impetus. While the 3 decades of poultry development in
India have witnessed a lot of turbulent periods for this activity, the
Bank has firmly stood by these poultry farmers in their thick and
thin. Poultry sector provides gainful employment to 2 million people
and contributes Rs.30000 crore to the GDP. The outstanding
advances of the Bank to Poultry amount to Rs.178 crore spread
over in 7092 accounts.

HELPING HANDS TO SMALL SCALE INDUSTRIES:

"Size does not matter, as long as your goals are defined"

"Great heights, reached and kept by great men is not
attained by sudden great flight, but, when their companions slept,
they were toiling upward in the night ".

Small Scale Industries sector has contributed significantly towards

nation building. SSI sector recorded a growth of 8.1% in output
and touched Rs 7crore at current price despite the slow down in
industrial sector during the year ended 31.03.2002. Number of SSI
units is estimated to have touched 35 lakhs as on 31.03.2002. The

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sector has provided livelihood to about 192 lakh persons. Exports
from SSI sector are placed at Rs. 623 crore.

Bank of India, being one of the oldest and premier banks of the
country, has been playing a crucial role in promotion of Small
Scale Industries through a strong network of branches spread over
length and breadth of the country. These branches are actively
participating in dispensation of credit to small scale industries; SSI
sector constitutes a bulk of bank's credit portfolio. To give a further
boost to SSI sector, the bank has opened 32 Specialized SSI
branches all over the country. Bank has taken various steps to
extend adequate and timely finance to SSI units by simplification of
application form with check list, time norms for disposal of
applications, working capital financing on turnover basis,
participation in Gramodyog Rozagar (REGP) scheme of KVIC,
Capital Linked Scheme for Technology Upgradation by
Government of India. Bank has also launched credit rating model
for SSI borrowers. The Bank has floated SSI Star Suprime
Scheme to assist SSI units to remove temporary mismatches in
their finances at very competitive rate of interest. Lending to SSI
sector was Rs.4588 crore spread over in 55415 accounts. The
Bank has launched BOI Laghu Udhyami Credit Card (LUCC) and
Artisan's Credit Card (ACC) to extend hassle free finance to small
entrepreneurs.

ARTISAN, VILLAGE & COTTAGE INDUSTRY:

"Hands that work wonders for self sufficiency" "Success is one

percent inspiration and ninety-nine percent perspiration”

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Historically Indian economy is characterized as rural economy,
Artisans, Village and Cottage Industries form an important element
of decentralized sector. Artisans are typically entrepreneurs who
are engaged in traditional activities such as black smithy,
carpentry, pottery etc. and acquire skills through an informal
training mostly from family members. Village and Cottage
Industries are industries, which are set up in rural areas, making
use of locally available natural resources and/or human skills.
These industries include khadi, handlooms, handicrafts coir etc.
and do not normally use automotive power. The Bank also
finances to organizations, which provide support to unorganized
sector for inputs or marketing of outputs. Bank of India, keeping in
view the socio-economic importance of this sector started
financing artisans and village and cottage industries to help these
entrepreneurs to realise their potential. The theme was "finance for
development of rural sector." Bank of India has outstanding
advances of Rs.331.79 crore to artisans, village and cottage
industries numbering 12432.

EMPLOYMENT GENERATION AND POVERTY ALLEVIATION

"To make oneself strong, willed and decisive you must have a
determined approach"

With nationalization of Banks in 1969, the Bank expanded network

of branches. Rural and semi-urban centres were the main thrust
areas for branch expansion to accelerate overall growth of the
economy in these areas. The Bank has been associated with
implementation of several Government sponsored schemes like
Small Farmers’ Development Agency (SFDA), Marginal Farmers
and Agricultrual Labours Development Agency (MFAL), Antyodaya

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Gram Vikas Yojana, Integrated Rural Development Programme
(IRDP), SwarnaJayanti Gram Swaroj Yojana (SGSY), Self
Employment to Educated Unemployed Youth (SEEUY), Prime
Ministers' Rojgar Yojana (PMRY), Self Employment to Urban Micro
Entrepreneurs (SEEUY), Prime Ministers" Rojgar Yojana (PMRY),
Self Employment to Urban Micro Entrepreneurs (SUME), Swarna
Jayanti Shahari Swarozgar Yojana (SJSRY) etc. The statistical
compilation reveals a staggering figure of over 2 million
beneficiaries (20 lakh) assisted over the years with total financing
of Rs. 2093 crore. This has helped check migration of rural youth
to urban areas to some extent. Large numbers of weaker section
families who have received the credit facilities, benefited from the
scheme have started generating additional income to support the
family while many have crossed the poverty line. Branches have
also financed large number of women folk enabling them to rise
above their relegated status and bring about their empowerment.
PMRY and SGSY schemes are being implemented in more
systematic way for upliftment of rural populace vis-à-vis
employment creation. In States like Maharashtra, Gujarat,
Karnataka, Madhya Pradesh and Andhra Pradesh, the Bank has
implemented scheme for financing the labourers who are engaged
in harvesting, transportation of sugarcane to sugar factories. Every
year, Bank is assisting nearly 3 lakh labours who migrate from
their places/dates for 4-6 months in the fields to meet their
consumption needs.

The Bank right from early seventies involved itself in extending

helping hand to the tribal families in deep forests by way of
consumption finance during the period of collection of minor forest

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produce such as tendu leaves (leaves for rolling beedis), gum,
shellac, honey, tamarind/mangoes, medicinal plants and its
products in raw form etc. Bank is assisting the needy persons to
start their own activity under farm/non-farm sector under industry,
service and business category.

MICRO FINANCE

"From Backward to Forward"

Two decades prior to SHG movement was initiated, Bank of India

started identifying and financing under such schemes. Bank of
India started in a big way financing tribals from deep forests in the
districts of Chandrapur and Gadchiroli in Maharashtra and
keonjhar and Mayurbhanj in Orissa. The Scheme for cultivation of
Tussar silk worms was so unique that the small assistance ranging
between Rs.250/- to Rs.500/- for buying tussar silk cocoons as
seed and for livelihood of the family of the rearer who were
required to camp in jungles throughout the growth period of the
worms on trees of ‘Arjun' and ‘Ain' that it was lapped up by the
tribals. The financing was undertaken directly going into deep
forests camping at forest guest houses, getting executed the
documents in jungles and disbursing loans in cash to these tribals.
Starting with financing for 10 such rearers in the year 1973, the
Bank had covered all the 3000 silk worm rearing families in
Vidarbha by 1977. Group concept has taken roots in the Bank
since then, in various other activities particularly of women. Same
movement has now picked up in the form of micro finance or
SHGs providing finance to the poor after organizing them into
homogenous groups, commonly known as Self Help Groups

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(SHGs). The Bank/branches were actively involved in Maharashtra
Rural Credit Project, Pilot Project through International Fund for
Agricultural Development (IFAD). Apart from individual SHGs,
Bank also extends credit to the Self Help Groups promoting
institutes and NGOs in this field. As a matter of corporate policy,
the Bank has decided to actively associate itself in this movement
in financing the SHGs in tribal and backward areas covered
through the network of branches as a main thrust area of financing
by the rural and semi-urban branches mostly in these backward
areas. The efforts in financing the SHGs by the Bank have been
applauded at various forums.

FINANCING OTHER PRIORITY SECTOR

"To rise above the ordinary you need to tread the unbeaten path"
It is said that "Nothing succeeds like success".

The success rate is very high in activities started by individuals on

account of their determination, ambition to excel and hard work.
Services and business sector is an important sector of our
economy. Such ventures are mostly self-employment oriented
floated by individuals for rendering broad spectrum of services.
These services include Retail Trade, Small Business Enterprises,
Professionals and Self Employed, Transport Operators. The
number of beneficiaries availing bank's assistance and becoming
successful is so large that it was decided to pick up stories of real
achievers to motivate and thus others to excel in their endeavours.
Bank has launched 2 special products viz. BOI Laghu Udhyami
Credit Card and BOI Laghu Udhyami Trade Card for the benefit of
the Retail Traders & Small Business. The total number of such

32
entrepreneurs who stand assisted as of now is 1.65 lakh with
financial outlay of Rs.1155 crore in retail trade category and 78542
accounts in small business category with outstanding amount of
Rs.308.29 crore. The Bank has also financed to large number of
professionals and self employed who are serving the nation. Vast
numbers of professional like engineers, doctors, and architects
have established their firms for rendering professional services to
the community with the assistance from the Bank.

The Bank was first to finance dentists and Medical Practitioners

even prior to nationalization and continues to associate itself in
actively financing all types of professionals numbering 49388 with
outstanding level of Rs.229 crore. Another important segment is
Small Road and Water Transport Operators. The Bank has unique
scheme for the transport operators providing repayment by
affordable EMIs and allowing repayment holiday during rainy/off
season and permitting repayment over a period of 7 years. The
scheme has in-built financing arrangement for recurring expenses
such as taxes and insurance. Presently, the Bank has 20472
accounts of Road Transport Operators who are happily moving
wheels of their business in association with the Bank with
outstanding of Rs.266.02 crore.

Bank of India was the first Bank which started financing to needy
and bright students for undertaking higher studies in India and
abroad at the rate of 4% simple p.a. even prior to nationalization
when the concept of DRI lending was not introduced, thereby
contributing in nation building through excellent human resources.
There are as many as 22009 students pursuing higher studies in
India and abroad with present exposure of Rs.269.63 crore.

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WOMEN ENTREPRENEURS

"To soar freely in the open sky, you need to have strong wings."
Bank of India is keen on supporting women from all the sectors of
the Society by way of schemes to give Assistance to Rural Women
in Non-farm Development (ARWIND) and Development of Women
and Children in Rural Areas (DWCRA).

These schemes include small scale industrial undertakings,

artisans, village & cottage industries, small road transport
operators, small businesses, professionals and self employed,
retail traders, agriculture & allied activities Swarnajayanti Gram
Swarojgar Yojana (SGSY) and Self Help Groups (SHGs)

Thousands of women have availed benefits under these schemes

and made immense financial progress. The Bank has been
following innovative approaches for assisting such borrower by
identifying the beneficiaries and activities which have the potential
for generating better income.

The financial support of the Bank has transformed the quality of life
of many women entrepreneurs and made them feel proud of their
inherent strengths.

REGIONAL RURAL BANKS

With a view to enlarge the scope of Banking Services in rural and

remote areas, Bank has sponsored 16 Regional Rural Banks
which are located in five States. These RRBs cover 38 districts
where the bank has been entrusted with the Lead Bank

34
responsibility. These RRBs, by and large, pursue similar credit
policies of that of sponsor Bank, particularly in the areas of priority
sector lending and extending Banking Services in rural and remote
areas where other Banks have virtually a restricted reach. Many
innovative need based schemes have been introduced by the
RRBs to cover wide area of mass population so as to bring in
social and economic development in their respective areas of
operation.

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