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Maharashtra SCB growth plan rides on new schemes & technologies

Intro: The bank plans to revamp the core banking system and allied applications:

The Maharashtra State Cooperative Bank is the only cooperative bank in India, which has figured 9 times among the top 1000 banks in the world on the basis of financial soundness (capital adequacy) as surveyed by ‘The Banker’ published from London, periodically.

Almost all cooperatives in Maharashtra have a political, historical, social and cultural heritage. The Maharashtra SCB was originally registered as the Bombay Central Cooperative Bank in 1911. It has given a fillip to the organization of cooperative and ancillary industries for the production of agricultural inputs and also helped to set up secondary and tertiary industries.

Network Expansion 

There are 21,253 PACS and 31 DCCBs affiliated to Maharashtra SCB. It has 51 branches and 13 ATMs in operation in the state as on 31 January 2018. All the branches and ATMs are in urban / semi urban centers. Dr M.L. Sukhdeve, chairman, Board of Administrators of the bank, says the Reserve Bank of India has granted license to the bank for opening a new branch at Jalgaon. The bank has a training institution, the Shikhar Training & Research Institute at Vashi in Navi8 Mumbai, which has been imparting various training programs to the staff of DCCBs and PACS. The institute has topped at the national level by scoring 819 marks in C-PEC accreditation with A grade.”

Customer Base Up

Dr M L Sukhdeve

The bank has a customer base of 2,74,422. Most of the customers are in urban / semi-urban areas. “To increase the customer base, we have programs like ‘Bachat Saptah’ and ‘Bachat Pandharawada’, which are arranged regularly,” says Sukhdeve. “We have been opening new branches and providing improved services like RuPay cards, ATMs, CTS centres, mega functional banking machine, etc. We have also introduced new services such as IMPS, BHIM etc,” he adds.

The bank uses Credit Stabilization Fund and Special Credit Stabilization Fund to rehabilitate poor farmers through PACS and DCCBs and strengthen fishery and agro co-operatives.


Better Business Mix

The total amount of deposits outstanding of the bank as on 31 March 2017 was Rs163.76 billion, registering a yoy growth of 45%. The bank has adopted various measures like revision of interest rates and deposit mobilization. Sukhdeve explains: “We have set targets for the branches. As a result, cost of deposits has come down from 6.79% as on 31 March 2017 to 6.46% at present.”

The total amount of loans outstanding as on 31 March 2017 was Rs163.36 billion, registering a growth of 13%. “Major recipients, which have got the maximum credit (refinance) so far, are DCCBs, sugar factories and state level cooperatives, corporations under consortium to Food Corporation of India, Indian Farmers Fertilizer Cooperative, Maharashtra State Tribal Development Corporation and Maharashtra State Electricity Distribution Company,” says Sukhdeve.

The bank has been sanctioning import/export limits to PCBs / DCCBs on behalf of their customers and helping to promote their forex business. While lending, emphasis is laid on financing Integrated Rural Development Schemes known as ‘Suvarna Jayanti Gram Swarojgar Yojana’ to spur multifaceted development of shareholders of PACS which are below poverty line, as well as financing schemes of national importance like bio-gas development. Thus, waste resources are put to the best use and thereby minimizing pollution.

Sukhdeve claims that the bank has proved to be a pioneer of the time-tested Crop Loan System.

“We are known for taking innovative measures to provide facility for issuance of demand drafts by devising the ‘Mutual Arrangement Scheme’ way back in 1931. A similar scheme was introduced for cooperative banks in the entire country from the 1960,” says Sukhdeve.


During 2016-17, the total borrowing of the bank stood at Rs86.43 billion, of which refinance from NABARD was Rs85.17 billion. In the current year, till 31 December 2017, its total borrowings stood at Rs70.85 billion, out of which refinance from NABARD was Rs64.82 billion.

The bank takes care of financial needs of the non-farm sector also by providing refinance facility to DCCBs under NABARD’s general refinance and composite loan schemes to enable them to help rural artisans and small scale industries. Sukhdeve says the bank provides assistance out of its own resources at the concessional rate of interest to DCCBs not eligible for loans under NABARD’s refinance facilities too.

Revamping IT Services

The bank is in now in the process of revamping its CBS, allied applications and IT infrastructure for which a tendering process has been initiated with the help of a consultant. At present, through its 13 ATMs it offers value-added services like card to card payments, mobile number registration, Aadhar number registration, cheque-book and account statement requests besides regular ATM transactions. Says Sukhdeve: “We provide EMV RuPay debit cards, which can be used on any POS terminal and for eCommerce transactions. We have received mobile banking license from RBI and have successfully implemented ‘Shikhar Mobile app’ which has gone live in August 2017. The services given to customers through mobile banking include interbank / intra bank fund transfers using NEFT and IMPS, balance enquiry, mini statement, transaction search and value-added services like cheque book request, blocking ATM card, etc.”

panalists at an event MSCB

panalists at an event MSCB

The bank aims to be on par with other commercial banks in terms of digital banking environment. It offers CTS service to sub-members (DCCBs, UCBs) through its 7 CTS centers. “We are in the process of implementing UPI and BHIM and other NPCI products to support digital transactions. We are also introducing eKYC and AEPS services. We will soon be a direct member (i.e. AUA / KUA) and give eKYC and AEPS as-a-service to DCCBs by making them sub-members,” says Sukhdeve.

Key Technology Vendors

The bank started computerizing its various departments in 2001. Migrating from complete manual operations, it started implementing various modules of automated solutions and branches were computerized using TBA. “In March 2011, we completed our migration to Core Banking Solutions using OMNI Enterprise Software from Infrasoft Technologies. We have established our own data center at our head office in Mumbai and our DR site is at our Pune regional office. All the branches and regional offices of the bank are connected to the data center and banking operations are centralized. We have engaged Dynacons Systems & Solutions as our system integrator, essentially for maintenance of the data centre, DR site and networking. The firm also provides facility management services and connectivity management,” reveals Sukhdeve.

Strengthening DCCB

The bank’s gross NPA have come down to 7.98% as on 31 March 2017 from 9.27% in the previous year, while net NPA were 0.56%.

Sukhdeve says out of the 31 DCCBs in the state, 18 DCCBs are found to be financially weak and of the 21,394 PACS, 14,754 are viable, while 6342 are potentially viable.

NABARD sanctions refinance to the bank at the rate of 4.5% and the bank in turn keeps a margin of 0.5%, charging 5% interest for the DCCBs. While the DCCBs are required to charge 4% interest rate to PACS, farmers get loans @ 6%. The DCCBs, therefore, incur 1% loss in their crop loan disbursement. Sukhdeve says there is a need for sanctioning interest subvention upfront, as claim amounts under interest subvention are received very late, which again adds to the losses of DCCBs. It is essential to increase the interest subvention to the bank at least to the level of 4.5% to offset the losses arising out of lending agriculture credit at 7%, he adds.

Insurance Products

The bank has launched Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana for the benefit of its customers. The bank also provides guidance to DCCBs in implementing several social sector schemes covering the central government-sponsored insurance schemes.

Growth Targets       

Maharashtra State Cooperative Bank has prepared a Developmental Action Plan for 2017-18. “Our major targets for 2017-18 include deposits of Rs185 billion, borrowings of Rs91 billion, loans and advances of Rs195 billion and annual profit of Rs3.61 billion,” says Sukhdeve.

The bank is resorting to expansion and growth through opening of new branches, introduction of new finance scheme ‘Baliraja Shikhar Thibak Sanch / Sub surface Jalsinchan’ for member as well as non-member farmers of cooperative and private sugar factories, ‘Sanjeevan Hypothecation Cash Credit Scheme’ for traders and ‘Project Young Champions Deposit Scheme’ for children, ‘Jaswandi Adhikarsh Karj Maryada” Scheme for DCCBs / urban banks on pledge of government securities, allowing ‘A’ class membership for PACS, housing societies and salary earners’ societies.

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