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We all know that UBI emerged as an amalgamation of four major Banks on this day in the year
1950. There is always a history, behind a history and it was tangentially mentioned by you as well.
There were four important banks, the Comilla Banking Corporation, the Comilla Union Bank, the
Bengal Central bank and the Hooghly Bank. These four banks were doing reasonably well in 1920s
and in 1930s. But in 1940s there was a problem across the country in the banking business. There
was a massive plight of deposits out of these four banks. There was a crisis. There was a need for
amalgamation. And, the amalgamation did take place and one UBI was formed on 18th December
1950. But it was not only born, it was passed to the hands of great Late B.K. Datta, a remarkable
and efficient person who had a concrete plan of action.
If I recall correctly, in 1950 the UBI as a whole had a Deposit of Rs. 27 crore and the Advance was
Rs. 13 crore. So the CD ratio was around 48%. In between 1950 and 1969, Deposits increased from
Rs. 27 crore to Rs. 168 crore which was more than 500% of growth and the Advances increased
from Rs. 13 crore to Rs. 118 crore which was more than 700% increase and the CD ratio increased
all the way upto 78% plus. So that was a very positive part of the history. Historically more than
50% of the branches were located in this State and also other parts of Eastern and North Eastern
States. People of these States started having an emotional attachment with this Bank. When I was
a young Lecturer way back in 1967, my joint account, with my mother and brother, was opened
with UBI at Bhowanipur Hazra area. I had a feeling of comfort when I moved there and that feeling
of comfort still lies with me.
In the first part of 1969, the Bank was nationalized along with major commercial banks of the
country. If you look at the history between 1969 and 1996, there was remarkable growth of
Deposit, Credit and Branch expansion. There was lot of enthusiasm. When I was not a Minister and
was teaching at Kolkata University as a Reader, Asok (Asok Banerjee, GM) and Manoj, (Manager,
SLRP.Deptt.) were my students. Incidentally many of my students are in your bank and I still
remain in touch with them and I get to know lot of about your bank which is on the whole very
positive. When the expansion was taking place, I recall, in late seventies or early eighties, I was
teaching in the University and was a member of the State Planning Board, IRDP Programme was
launched and UBI being the Lead Bank, SLBC was always chaired by the CMD of UBI and we are
proud about the leadership given by UBI.
Then coming into late eighties and early nineties the problems could be seen. Because of UBI's
historic origin, the bank has advanced credit to major industrial spheres of Eastern and North
Eastern States to Engineering, Jute and Tea etc. All of us know that these industries started facing
problems. Tea industry was going through a trauma for loss of export market and there were
internal problems. Jute industry has always shown, in my view, a schizophrenic picture. As a result,
some of your loans became NPA. Meanwhile the rules of the game were made stiffer and UBI along
with other banks having head quarters here, started facing severe problems and in the trough of
the whole thing the loss is what you exactly mentioned, more than Rs. 1,000 crore.
The day UBI has started taking up the challenges from early nineties to 2001-02 and now on for a
decade or so (UBI didn't get the recapitalizations from Govt. of India), UBI fought on its own way
and it was a collective internal resolve to increase its own efficiency that too without loosing sight of
the importance of social priorities. UBI's advances to priority sector are a matter of great pride.
The West Bengal economy also started looking up. We started with agriculture, with land reforms,
which in simple economics is a move for equal contribution. The Fund Management Study Data
indicates that highest record of overall production and employment generation per hector is
obtained not from the land of very big farmers. We want to maximize output and employment
generation which is happening and this is also the thrust of 11th Plan document. We started doing
in that direction and agriculture started moving up. The latest State wise data published by Central
Statistical Organization over the period 1993-94 to 2002/03, for the country as a whole, the total
agricultural production, it has been 1.5%. But for West Bengal with due modesty I would say it was
3.7% and it becomes highest in the country. We are glad about it, but we have miles to go.
There is tremendous need for diversification. There is remarkable improvement in horticulture,
floriculture and in pisciculture also. As a result, it has created purchasing power and internal market
and the industry started responding.
From 1991 to December, 1995, around 1128 units in unorganized sector had invested Rs. 29,000
crore and production started and our position, to our surprise, was second amongst in all the states.
UBI has a very important role there, in the sphere of unorganized industrial sector. For 1991-92,
over this period, the number of working manufacturing units in West Bengal increased from 19
lakhs to 27 lakhs and created an employment of 59 lakhs of people. And again to our surprise we
have beaten Maharastra. In SSI the West Bengal has started doing very well and UBI is one of the
few banks who would appreciate that thing.
Along with Large Sector, the Small Sector, which has been underscored in the Union Plan
Document, brings the equal competition and employment intensity which is required. The lowest
end of Small Scale Sector is the Self Help Group. There are about 5 lakhs of SHGs. in West Bengal
covering all the villages of the state. More than 90% of those are led by poor and rural women.
These SHGs' are having 50 lakhs of members. They save and more than 90% of their loans are
repaid. So, they are your good clients. That's the new sector which is now coming up.
If I take the last 5 year's data from the CSO ending with 2005-06, for West Bengal the average rate
of State Domestic product has been 7.1% as against the average rate of growth of GDP over this
period which was 6.7%. So the State's average rate of growth is higher than the rate of GDP growth
over the 5 years period. As a professional economist one must not depend on one year's data,
one has to have at least 5 year's moving average, otherwise you can be misled. The CSO figure
indicates previously Karnataka was on top amongst all the States but now West Bengal has beaten
Karnataka and here is the highest rate of growth. Do you know which is the fastest growing Sector
contributing more than 10% of average annual growth? , That is the Services Sector. Do you know
in the Service Sector which is the fastest growing sector in West Bengal? It is the Banking Sector.
This is the sector to be looked into.
If I take the period of around 5 years ending 2005, within the Banking Sector, the UBI has among
the fastest rate of growth. The Net Profit of UBI has increased by 522%. You have wiped out all
your losses and it is a clean Balance Sheet and Rs.45.87 crore is the Net Dividend that you have
paid. So within the Banking Sector UBI is the front runner. Your internal drive plus the State's
economic growth has made it possible. Eastern and north Eastern economy is growing up and since
your banking history connects and it's tied up with the growth of these areas, you don't have to
be worried about. This is the fastest growing part of India and we will grow with you and the 'Look
East' policy of the Prime Minister is most opted here. So, when you are moving - a new horizon is
opening up before you. That's why UBI on its own effort has absolutely turned around and, while
you are looking forward, may I make a request to fulfil the gaps in the field of agriculture and allied
sectors.
We did a survey through Calcutta University, my students did it, ISI also confirmed it; Of the total
credit requirement in West Bengal in agriculture and allied sector is at least Rs.10,000 crore. You
are aware as the Chairman of the SLBC last year the banks responded very well. In fact you will be
happy to know that the projection that the Union Finance Minister mentioned, banks have surpassed
it.
We have to come together. Professionally we will go together, after identifying the beneficiaries,
will provide them with correct credit in a vertical package, creating market linkage and we will be
with you till the recovery. Our certificate officers will do their job. Over the last few years the credit
deposit ratio for the State as a whole was below 50%, it has increased to 64% and the recovery
rate also has correspondingly increased by 5%.
For UBI 17% in CD Ratio is a gain point. Now along with the agriculture and allied sector there is a
pent up demand in the unorganized industry. In the SME sector, Medium gets the loan in any case,
but the Small sector does not. If we just adopt the RBI Guideline, collectively we can do a good job.
I will draw your attention to the SHGs. They are a new force, a force led by the women and no one
can stop it. They are the savers and saving is really done by the mothers and by the women-head
of the family. So women are the best savers and investors. It is for us to stand by them. If we do all
these together, then these are the actually potential areas .whether it is agricultural credit, whether
it is SSI credit or Self Help Group linkage; UBI is sometimes first, sometimes marginally second.
Friends, I want UBI to become first.
You have to compete, a fair and healthy competition with other nationalized commercial banks.
But there are private sector banks and also foreign banks. I want you to compete and make them
out. In my knowledge of economics if you look at the history of economic development of 3rd world
countries, the institution which plays the most significant role, it is not the Share Market, it is the
Development Bank. With social view, UBI can uphold development banking. If you can do that I
think not only you can retain your market but also capture the market of foreign countries that have
come to capture our market. We want to serve our State and capture their market. That should be
the goal also keeping the common people's interest in mind. If you do that we will respond. If you,
according to your policy of RBI Guideline and Govt. of India's policy move on this line, you are on
the surge, upward surge - if you do that we will respond in terms of Govt. Deposits and together we
will make UBI a Bank of West Bengal also where the Bank was founded; emotionally late B.K. Datta
was associated with it. On this day we can collectively take this pledge. With these words I thank all
of you
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