We Build Relationships
We build relationships! This is the sign that greets a visitor who enters the head office of the Odisha State Cooperative Bank (OSCB, http://www.oscb.coop/homepage.asp) in Bhubaneswar, India. I was there at the invitation of Mr. Tushar Panda, Managing Director of OSCB. I had met Mr. Panda at a Round Table Dialogue (RTD) on, Enhancing the role of cooperative banks and social finance institutions in financing social initiative and solidarity enterprises in the Real Economy. Mr. Panda along with other cooperative bankers had issues regarding the Reserve Bank of India’s policies towards cooperative banks; but he stood out by his emphasis on going to members and being responsive to their needs. At the end of the meeting, he invited me to visit his office and see their work; which, happened pretty quickly after. Over my two-days, I got the opportunity to interact with OSCB staff at the central office, branch offices and the village level and also meet with government representatives and academicians.
The OSCB was incorporated under the Orissa Cooperative Societies Act in 1948 and has been playing a pivotal role in transforming the agrarian economy of the State. The Bank comprises of 2709 Primary Agricultural Co-operative Societies (PACS) at the village level, 17 District Central Cooperative Banks (DCCB, with 323 Branches) at the middle tier, and its own network of 14 branches across the state. The Bank has facilitated enrollment of 53.69 lakh agricultural families from out of about 55 lakh agricultural families in the State covering 97.6% of the families. The bank has been earning profit uninterrupted since 1948. Mr. Panda proudly told me, “ At OSCB we continue to retain highest market share both in crop loan and aggregate agricultural credit disbursal at the level of 70 percent and 52 percent respectively. This is pretty good when the market share of Cooperative Banks in the country in these areas has reduced to the level of around 20 percent and 14 percent.”
In fiscal 2010, OSCB under the leadership of Mr. Panda launched the, Cooperatives at your doorstep, a door-to-door campaign to cover their 55 lakh members. Mr.Panda said this was needed to get the employees to know whom they were really working for and to make the bank more responsive and resilient. In fiscal 2012, there was a follow-up campaign and at the same time efforts were made to make the PACS a one-stop shop to provide services to members. OSCB was able to engage with the Government and get PACS to procure paddy on behalf of the Odisha State Civil Supplies Corporation. The helped improve the financial strength of PACS and indirectly impacted the profitability of the CCBs. I had the opportunity to visit PACS at Pipli in the company of Mr. Mishra and Mr. Amulya. It was heartening to see two dedicated managers talk proudly about the turn around that had been initiated in the PACS and the opportunity that existed for their growth.
OSCB facilitated the issue of Kisan (farmer) Credit Cards (KCC) to 42.84 lakh farmers to provide hassle free and timely credit to farmers. OSCB has a share of around 74 percent of the total KCC issued by all Banks in the State as compared to all India average of 20 percent only. The project that occupies the centerpiece of OSCB initiatives is the implementation of the Core Banking System (CBS) project in all the CCBs by establishing a State of the art Data Management Centre in its head quarters connecting all the 355 units. It was a pretty impressive to see large-sized monitors mounted on the wall and up-to-the second status being flashed on each of the banks. OSCB has also entered into agreement with the National Payment Corporation of India for issue of RuPay ATM Debit Cards. In order to reach the hard to access tribal areas, OSCB has procured 20 mobile vans equipped with ATMs and kiosks and will be rolling out the “Bank on Wheels” to provide doorstep banking to tribal families. I had the opportunity to pay a courtesy call on Mr. Bishnupada Sethi, Commissioner-cum-Secretary and Management in-Charge. Mr. Sethi told me that the close collaboration with the State Government has been an important factor in many of the OSCB’s initiatives. The government wants to see that farmers are made resilient and the PACS have an important role to play.
While the achievements of OSCB are impressive, the challenges are many. In an all staff-meeting, it was nice for me to see young people in the audience. OSCB has had severe curbs on recruitment that has impinged its growth plans and affected succession planning across all levels. Motivation is also flagging as promotions and pay increases have not kept in line. Mr. Panda himself was not sure of who would succeed him and the time that he would have to groom his successor. While elections to the board are happening, it will take time for a fully functioning board to take control and provide a forward-looking vision. The entry of commercial banks into rural areas under the Prime Ministers Jan Dhan Yojana could eat into the share of OSCB in dispensation of crop loans. Mr. Panda was also worried about how farmers who had never used a card in their life would be able to prevent its misuse; either losing the card or sharing their pin number. The need for PACS to diversify services is another area of concern. While paddy procurement have improved balance sheets; its continuation by the state government is not guaranteed. This is a good time to build the capacity of PACS to enter into business and value added services. According to Mr. S.K. Kale, CGM, NABARD, in 9 out of 17 CCBs business development cells manned by business graduates have been set up to help PACS chart out a growth plan. It remains to be seen how the plans and put into action.
In June, 2013, the state government of Odisha promulgated the Odisha Self-Help Co-operatives (Repeal) Ordinance, repealing Odisha Self-Help Cooperatives Act, 2001, and brought all cooperative societies under Orissa Co-operative Act, 1962. The State Government had already amended the Orissa Cooperative Act, 1962 as per the 97th amendment of the Constitution. According to the Repeal Bill, 2013, all 1,634 self-help cooperatives, functioning in the state, had to amend their bylaws and reconstitute the board of directors within three months in accordance with the 1962 Act. Mr. Sethi, said that the Repeal Act has helped curb the ponzi schemes that were sprouting all over the State.
I had the opportunity to meet Professor. L. K. Vaswani from the KIIT School of Rural Management (KSRM, http://www.ksrm.ac.in) and Professors B.S. Misra and S. Peppin, from the Xavier Institute of Management, Bhubaneswar (XIMB, http://www.ximb.ac.in). After the Institute of Rural Management Anand, KSRM is the second full-fledged institute in the field of rural management in India. It was established keeping in view the current and emerging rural development needs of the country. Professor Vaswani spoke of KSRMs’ efforts to conduct research and actively publish student findings. His interest is to brand products from PACS and encourage a new breed of cooperative entrepreneurs. We decided to explore this area further. The Xavier School of Sustainability is the first Management School in the country to offer a Masters in Sustainability Management. According to Professor Peppin, “We need to have business managers who look beyond just profits. The managers we produce need to care for the environment, human development and sustainable communities to manage our common future.” The School has roped in an impressive array of industry, civil society and academic advisors to its Strategic Academic Advisory Board and is planning a Summit in early July to mainstream sustainability in management education and explore and celebrate sustainability leadership initiatives in various organizations.