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Serving India’s remotest islands effectively

K Murugan

K.Murugan aims to maintain average growth rate of 7-10 % for deposits and 11-12 % for loans

The history of the cooperative movement in Andaman & Nicobar Islands is very interesting. It began when the Cooperative Societies Rules were framed in the year 1926. The cooperative movement got momentum in 1946 with registration of the first cooperative society viz. Rangachang Cooperative Land Syndicate. The major development took place only after independence, with the influx of refugees brought under colonization schemes of the government of India. The concept of agriculture cooperative credit gained momentum by the arrival of settlers in 1950s under various colonization schemes and organization of PACS in various settlement areas involving revenue villages.

The impetus to the agriculture credit structure was given by converting a large sized PACS in South Andaman into Andaman & Nicobar State Cooperative Bank. In January 1965, 28 PACS and 31 other cooperative organizations were affiliated to the bank. The Andaman & Nicobar State Cooperative Bank has been granted license by the Reserve Bank of India on 21 April 2006. It is the apex bank of the 2-tier cooperative credit structure in the union territory with PACS at grass root level.

Spreading Wings

The bank is the only cooperative bank in the entire union territory of Andaman & Nicobar. Its operational area extends to the whole of the territory through its branches located right from Diglipur at extreme north to Campbell Bay at the extreme south. As many as 46 PACS are affiliated to the bank.

Some of the achievements of present board of directors during the last 5 years are worth noting. According to K. Murugan, officiating MD, after the present board was constituted in 2012, the number of branches has increased to 41 with opening of 12 new branches. The bank has a mix of 24 on-site and offsite ATMs. The Port Blair branch has 2 ATMs. One on-site ATM has been opened at the aerial bay area in February 2018. “We have opened 6 new ATMs in the last year. We have a staff strength is 381 and we have employed more than 250 unemployed youths,” says he.

He also adds that after the present board took over, 15 branches have been modernized as part of network infrastructure development.

As part of staff welfare, the bank has implemented 7th Pay Commission for the staff members, extended medical reimbursements to all staff members, maternity benefit for the female employees with the revised leave period up to 180 days. Children’s education allowance has also been introduced at the bank.

Customer Service

The bank had introduced a scheme of pension disbursement at door steps in 2012. It has undertaken financial literacy camps at over 298 locations. Says Murugan: “After the present board took over the administration of the bank, we have disbursed pension at the doorsteps of the beneficiaries – 8688 elderly people, 3694 widows, 1333 handicapped persons, 642 destitutes and 371 people getting national pensions were benefited. The total number of pensioners covered by the bank is 14,728. We also have a total customer base of 325,000.”

The bank is pioneer in extending many facilities to its customers. A total of over 14,000 bank accounts have been opened under PMJDY scheme. It offers various other services like PMEGP, Kisan Credit Cards, etc. “The bank has issued 37,334 RuPay debit cards and more than 4675 Kisan Credit Cards, whereas, all the commercial banks operating in the islands issued only 1000 KCCs. During 2016-17, we have issued additional 500 KCCs to farmer members,” says Murugan

The bank entered into an MOU with United India Insurance Co to provide PMSBY scheme to all its eligible savings account customers. Till date, the bank has covered over 8250 customers under PMSBY scheme.

The bank has launched its first ‘all women branch’ at Garacharma-II in south Andaman and has also introduced various loan schemes for the benefit of women. These loans are offered at a very low interest rate to enable their uplift, says Murugan adding: “The Garacharma II branch had a total of 2137 savings bank accounts by women, besides accounts of 31 JLGs and 29 SHGs. We have also launched new schemes for women like loans at concessional rate of interest at 11% p.a. for the purpose of education for girl child, marriages of girls, medical treatment for women and micro-insurance scheme for the SHG members.”

Kuldeep Rai Sharma

Kuldeep Rai Sharma ,Vice Chairman ,Andaman & Nicobar SCB,giving SHG loans

He also points out that the guidance and support offered by the present board has been instrumental in the bank bagging many prestigious awards at the national level. It has been winning first prize in overall performance in 2-tier structure from NAFSCOB from 2011-12 till 2015-16. Besides, it has won the first prize in ‘NCUI Overall Performance Award’ in 2012-13.


Initially, the bank had restricted its activities to short term lending, extending its services to the people of the island by extending credit to agriculturists, small scale industries, artisans, retail traders, BPL families and urban consumers. Now long term loans are provided to agriculturists for various plantation crops and allied activities and term loans are extended for manufacturing / processing units, purchase and operation of vehicles, running of small businesses, establishment of various servicing units like pathology labs, X-ray units, etc. It is also providing loans for construction / purchase of residential houses, for higher education of young and talented students of the island and for construction of commercial complexes.

 “The total business of the bank during the 46-year period of 1966 to 2012 was Rs678.83 crore. As per audited accounts for the year ended 31 March 2017, our total turnover has reached Rs1269 crore, which means the business has doubled in the last 5 years. This is in spite of stiff competition from nationalized and commercial banks. We are now positioned at the second position after State Bank of India in respect of business,” says Murugan.

The gross NPA of the bank fell to 15.49% as of Q3 2017-18, from 25.87% at end of 2015-16. Net NPAs fell to 11.48% from 18.73% during the same period. The net profit also fell to Rs3.90 billion at the end of 2016-17 from Rs5.11 billion a year ago. Murugan says the additional commissioner of Income, TDS, Kolkata has appreciated the bank for being the top tax payer in the island.

Credit-Linked SHGs

SHGs constitute an important link in rural lending. The bank has credit-linked 307 SHGs to the tune of Rs6.13 crore during 2016-17. A total of over 4039 SHGs are associated with the bank since inception. Explains Murugan: “There are 163 SHGs with first linkage, amounting to Rs1.01 crore, while there are 144 SHGs with repeated linkage, amounting to Rs5.11 crore. South Andaman District tops in both the types of linkages with total of 199 credit linked SHGs, followed by north and middle Andaman districts with 104 SHGs, whereas Nicobar district has only 4 SHG linkages.”

The bank has been undertaking several CSR initiatives every year.

Targets, Future Plans

The Andaman & Nicobar State Cooperative Bank has fixed a number of targets to achieve in short to medium term. “We will strive hard to maintain an average growth rate of 7-10% for deposits and 11-12% for loans. We are planning to appoint business correspondents in the territory. We are also going to deploy a mobile van for creating awareness about our banking products and services. Micro-ATMs are under active process for introduction soon,” reveals Murugan.

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