Mr. Surendranath
With a B.Sc in Agriculture at Indian Institute of Agricultural Sciences from Banaras Hindu University and after being successful in competitive exams, Mr. Surendranath incidentally joined a bank.
“I joined in Union Bank of India and initially posted at Paderu, Vishakapatanam which is a tribal area. Owing to my role, I was forced to interact with people even though by nature I was rather shy. I realised that when we start interacting with people (customers), they look up at us as a person who has abundance of knowledge in terms of agriculture because we were dealing with agriculture-related finance and rural banking.”
Mr. Surendranath began his career as a Rural Development Officer and worked as one for almost 10 and half years at various branches of Union Bank of India. He then went on to work as a Branch Head as well.
“With all that experience, I developed a flair for agriculture. Hence, when I got selected as a Faculty member at Bangalore, I have chosen the rural and agri-business department and financial inclusion department discipline. For the last 5 years I have been a faculty member as well as Discipline-in-charge for the bank in Agri-business and financial inclusion Departments.
What are the banker's perspective and priorities when it comes to agriculture and rural development?
In my opinion, a banker's role is very huge in the field of agricultural development.
As per the directives of Reserve Bank of India, all nationalised and private / foreign banks need to finance for Priority Sector advances, up to the extent of 40%. Within this Priority Sector advances, Agriculture portfolio should be 18% share. 18 out of 100 rupees of the loans sanctioned, needs to be dispensed for agricultural activities. This translates to the fact that the regulatory authorities, the Government and Bankers are focusing on improving the agricultural sector of our country.
In terms of the role of a banker in agriculture, we have 2 different perspectives to finance for agriculture:
Production Credit: For short duration yield, where the farmer stands to gain an income within a maximum period of 18 months. For example, crops like cereals, pulses, millet, horticultural crops, etc.
Investment Credit: For infrastructural development that is highly beneficial to the farmer, which in turn will be good for the development of the economy also. For instance, tractors, oil engines, electric motors, biotechnology, dairy/poultry units, sheep/pig rearing, fisheries etc.
From a banker's point of view, what are the hurdles for the smooth functioning or the effectiveness of this system?
There are clear guidelines from the top management of the concerned banks, regulatory authorities etc. that we bankers need to follow.
But any banker, especially those working as Agricultural Officers or Branch Managers do not have sufficient knowledge for exposing themselves towards extending credit investment purposes, in particular. Everybody is interested in extending credit for crop loans only which is of short duration loan. This can be in the form of Kisan Credit Card or loans against gold ornaments or loan against Bank deposit, etc. The Government also provides interest subvention of up to Rs.3 Lakhs for these crop loans only. So, even if a high-capacity farmer approaches a bank he contends himself by availing a loan of up to Rs.3 Lakhs to get the benefit of interest at the rate of 4%. So, everyone is interested to avail loans up to Rs.3 Lakhs only.
Bankers do not positively extend investment credit loans. Infrastructure development is a basic necessity for any sustained growth in Agricultural economy.
What are the hesitation points for a bank to finance a farmer?
Indian farmers are usually very shy and they categorize themselves as part of some lower cadre when they approach officials. Generally they do not even think of approaching authorities.
Those farmers / Entrepreneurs who approach the bankers do not have sufficient knowledge in respect of backward and forward linkages for the proposed activity. So, farmers also require training.
For example, I have visited some progressive farmers in Bangalore. I met a farmer who has only 2 acres of dry land where irrigation facilities hardly existed in past. Although, he was in possession of dry land only, due to his sheer interest, he went to the agricultural college in Bangalore and gained latest knowledge from the extension department and various other departments.
He is now carrying out integrated farming in the same 2 acres of land. He has different activities going on at his farm such as pig and cow rearing, Arecanut cultivation in half an acre; poly house cultivation of rose, tomatoes or capsicum.
This way even if one activity fails or yields less, it is compensated by the other activities. He is reaping wonderful benefits within 2 acres of land. He is generating income to the tune of around Rs.12 lakhs per year.
If you look at things intricately, it is his curiosity and commitment that got him here. He has made strenuous and continuous efforts to get knowledge from the Agriculture University. These are the elements that contributed to his success.
How about rural folks, who approach the bank for financial assistance, in comparison with this person for instance?
The more I interact with agriculture officers, farmers and others, I see that there is hardly anyone who is proactive in their approach for innovative practices and development. That is the main drawback existent in banks and also in the farming community.
During my stint at Jabalpur, I met one of the Branch Manager and suggested him to introduce cultivation of vegetable crops under controlled environmental conditions, in a village that falls under his branch’s command area. He immediately came up with excuses that it won't work because people won't accept the idea etc. I asked him to not give-up the idea of introducing the technology. I asked him to select one intelligent, progressive farmer, who looks forward to progressive agricultural methods. Finally he selected a farmer who, with the bank’s financial assistance, established around 1000 sq mt polyhouse. Within the polyhouse that farmer cultivated different types of capsicum.
Seeing this polyhouse, farmers in and around that place started mocking the farmer who ventured into this. Once the crop matured, there was huge demand for capsicum. He started selling it at the rate of almost Rs. 25 to Rs.30/- per Kg. and got brilliant returns for his produce.
In due course of time, all the farmers in that area approached the bank. Almost the entire village began either cultivating capsicum under polyhouses or in the open system.
I provide guidance to all Officers and Branch Managers to try inspiring just one progressive farmer in their area of operation. One person agreeing to try it is worth the effort. Others will soon follow.
In your experience, what have been some of the fulfilling moments as a banker?
I have completed almost 32 years of service as a banker and have discharged my duties in almost all fields of banking. I have worked in rural development and also in retail lending, which is giving loans for housing, vehicles etc. I have also worked in MSME segment, which is consisting of small scale and medium industries.
There are lot of happy moments while working as a Rural Development Officer because when we extend any kind of financial / technical assistance to anyone in the farming community, they feel very happy and treat us like God. People have come and expressed their gratitude for my proactive approach.
When I was working at Paderu branch, Vishakapatanam, we have introduced rose garden cultivation. I had selected a tribal farmer, who was initially too shy to talk to us or come to the bank etc. At our insistence, he came with us to Bangalore, purchased some rose plant seedlings and planted it on his farm at Paderu village. After 1 year, there was a huge demand for roses in and around Paderu and this farmer got elevated from the status of a poor farmer to a mid-level farmer.
With time, he also became proactive and began canvassing other farmers on behalf of our bank. He started sharing his own experience and learning and in course of time he became a prominent personality in his locality. He is now a very sought-after person in that area.
Memories such as these gives me sheer joy.
Please tell us about the SBI Land purchase scheme.
This is honestly not State Bank of India's scheme. The Indian Government has proposed to all nationalised and private banks to give importance to 6 loan schemes; one of which is land-purchase loans. The restriction is that this can be availed only by Marginal farmers.
As per the Reserve Bank of India guidelines, a marginal farmer is one who only possesses a maximum of 1 hectare, which is almost 2 and half acres of land. If a person has less than 2 and half acres of land and falls under the marginal farmer bracket even after purchasing additional piece of land then only, the banker can extend the loan to purchase agricultural land.
This loan can be availed by tenant farmers, lessee holders, share croppers, etc. who does not possess land but are performing agricultural practices. They get financial benefit to purchase land up to 2.5 acres provided the crops which they choose to cultivate will fetch them enough money to repay the loan over a period of 7-10 years’ time.
As per guidelines, only farmers can avail of this loan not people who desire to enter the agricultural sector -prior experience is a requirement.
A lot of people in the IT sector, today,show interest in innovative farming in their own capacity. Are there any bank assistance or schemes that they can avail of?
Yes, definitely! There is no restriction in terms of income criteria to avail loans that come under the agricultural scheme. Even if a person is doing another job he can approach the bank and avail loans. The only thing is some benefits like interest concession etc. will not be available for them. Other than that they are equally eligible for any kind of loan.
Nowadays, we are also of the mind-set that agriculture should not be for sustenance alone. It should become highly profitable for people.
Can you share some of the agricultural schemes that really worked well for the bank and the borrower?
In our country, out of the entire farming community, almost 75-80% falls under the small and marginal farmers' category. The land holding is very less for these farmers who are unable to break free from the poverty circle. They perform agricultural activities for sheer sustenance.
I advise my banker friends that we need to cross-sell our products to farmers who come to avail a small crop loan. This will prove beneficial to the farmer, to the bank and to the economy.
For instance, if a farmer with a family of 4, who is solely dependent on the 2-acre of land approaches the bank for a small crop loan, we bankers should push him to take up a loan for a 4 or 8 animal dairy unit also. This way, we give them an agricultural-allied activity also, which will prove helpful for the farm and the animals. Simultaneously these two activities will prove beneficial for them. Their annual income improves and there will be some contribution from their side for the growth of the GDP and economy of the country.
I always push for farmers who do single-crop cultivation to start integrated farming. This proves beneficial for the betterment of the farmers' community and is the need of the day. The Government is also focused on studying how to double the farmers' income by 2022.
Nowadays there are a lot of advertisements for selling and buying land which was not the case about 10 years ago. Are the banks in anyway helping out with such activities?
Other than marginal farmers, loan for purchase of land, banks are not in favour.
The only possibility is when the land is an estate of plantation crops like tea, coffee, rubber etc. and somebody who has sufficient means want to purchase land to reap good benefits. In such cases banks may finance it. Other than that for cultivation of food crops like cereals, millet, pulses, etc. banks are not in favour of dispensing any kind of loans other than to marginal farmers.
Is cold storage units a project that banks can support?
From a banker’s point of view, giving loans to rural godowns or cold storages is very important. It is part of banks' financing activity because nowadays in India the farming community produces sufficient food-grain products. However, because of the non-availability of storage facilities like rural godowns, cold storages and food and agro-processing industries farmers are unable to store the produce.
For example, the onion price may go up and down because we do not have sufficient rural godowns to store onion. Likewise, in parts of Andhra Pradesh like Kadappa, Ananthapur districts etc. crops like tomato gets produced in abundance but they don't get good prices.
The prices fall despite the market demand for such produce that the farmers are not being able to cover up for the cost of production also, at times. In course of time, they tend to shift their agriculture activity to other crops that can fetch them better benefits.
In the system, the production of staple crops go down and the prices go high. This is the seesaw ride that keeps happening. To arrest such situations we need more rural godowns, cold storages and food and agro-processing industries.
I feel the Government should also start focussing in this space. It shouldn't stop with just dispensing subsidies for these projects. They should focus on the development of such infrastructure in the country so that the farming community make profits and in turn the country can save the hassle of facing future shortages for staple crops.
Forecast estimates say that by 2050, we stand to face food shortages and may need to import food grains as well if we are not proactive.
How are the new generation bankers who are starting out today in comparison with that of your generation?
Honestly, this is a difficult question because we cannot generalize anybody. Having said that, in essence, the passion for anything, I feel, is missing.
Many in the new generation are interested in their own well being than contributing to the development of the society, community and nation. I wouldn't say it is completely washed off but it is falling to some degree. This is my experience.
Since the last 5 years, I am in the capacity of discharging my duties as Faculty member giving training and lectures particularly related to Agriculture. The involvement they show is purely for academic purposes alone. I don't see that involvement to do to improve the conditions of farmers or the economy when they go back to their work field.
Contact
Name SURENDRANATh DORNADULA
Chief Manager
Company Union Bank of India
Union Bank of India Staff College
Kalkere Bannerghatta Road
City BANGALORE
Zip Code 560083
Country India
State KARNATAKA
Phone-9964667489
Email d.surendranath@yahoo.co.in
With a B.Sc in Agriculture at Indian Institute of Agricultural Sciences from Banaras Hindu University and after being successful in competitive exams, Mr. Surendranath incidentally joined a bank.
“I joined in Union Bank of India and initially posted at Paderu, Vishakapatanam which is a tribal area. Owing to my role, I was forced to interact with people even though by nature I was rather shy. I realised that when we start interacting with people (customers), they look up at us as a person who has abundance of knowledge in terms of agriculture because we were dealing with agriculture-related finance and rural banking.”
Mr. Surendranath began his career as a Rural Development Officer and worked as one for almost 10 and half years at various branches of Union Bank of India. He then went on to work as a Branch Head as well.
“With all that experience, I developed a flair for agriculture. Hence, when I got selected as a Faculty member at Bangalore, I have chosen the rural and agri-business department and financial inclusion department discipline. For the last 5 years I have been a faculty member as well as Discipline-in-charge for the bank in Agri-business and financial inclusion Departments.
What are the banker's perspective and priorities when it comes to agriculture and rural development?
In my opinion, a banker's role is very huge in the field of agricultural development.
As per the directives of Reserve Bank of India, all nationalised and private / foreign banks need to finance for Priority Sector advances, up to the extent of 40%. Within this Priority Sector advances, Agriculture portfolio should be 18% share. 18 out of 100 rupees of the loans sanctioned, needs to be dispensed for agricultural activities. This translates to the fact that the regulatory authorities, the Government and Bankers are focusing on improving the agricultural sector of our country.
In terms of the role of a banker in agriculture, we have 2 different perspectives to finance for agriculture:
Production Credit: For short duration yield, where the farmer stands to gain an income within a maximum period of 18 months. For example, crops like cereals, pulses, millet, horticultural crops, etc.
Investment Credit: For infrastructural development that is highly beneficial to the farmer, which in turn will be good for the development of the economy also. For instance, tractors, oil engines, electric motors, biotechnology, dairy/poultry units, sheep/pig rearing, fisheries etc.
From a banker's point of view, what are the hurdles for the smooth functioning or the effectiveness of this system?
There are clear guidelines from the top management of the concerned banks, regulatory authorities etc. that we bankers need to follow.
But any banker, especially those working as Agricultural Officers or Branch Managers do not have sufficient knowledge for exposing themselves towards extending credit investment purposes, in particular. Everybody is interested in extending credit for crop loans only which is of short duration loan. This can be in the form of Kisan Credit Card or loans against gold ornaments or loan against Bank deposit, etc. The Government also provides interest subvention of up to Rs.3 Lakhs for these crop loans only. So, even if a high-capacity farmer approaches a bank he contends himself by availing a loan of up to Rs.3 Lakhs to get the benefit of interest at the rate of 4%. So, everyone is interested to avail loans up to Rs.3 Lakhs only.
Bankers do not positively extend investment credit loans. Infrastructure development is a basic necessity for any sustained growth in Agricultural economy.
What are the hesitation points for a bank to finance a farmer?
Indian farmers are usually very shy and they categorize themselves as part of some lower cadre when they approach officials. Generally they do not even think of approaching authorities.
Those farmers / Entrepreneurs who approach the bankers do not have sufficient knowledge in respect of backward and forward linkages for the proposed activity. So, farmers also require training.
For example, I have visited some progressive farmers in Bangalore. I met a farmer who has only 2 acres of dry land where irrigation facilities hardly existed in past. Although, he was in possession of dry land only, due to his sheer interest, he went to the agricultural college in Bangalore and gained latest knowledge from the extension department and various other departments.
He is now carrying out integrated farming in the same 2 acres of land. He has different activities going on at his farm such as pig and cow rearing, Arecanut cultivation in half an acre; poly house cultivation of rose, tomatoes or capsicum.
This way even if one activity fails or yields less, it is compensated by the other activities. He is reaping wonderful benefits within 2 acres of land. He is generating income to the tune of around Rs.12 lakhs per year.
If you look at things intricately, it is his curiosity and commitment that got him here. He has made strenuous and continuous efforts to get knowledge from the Agriculture University. These are the elements that contributed to his success.
How about rural folks, who approach the bank for financial assistance, in comparison with this person for instance?
The more I interact with agriculture officers, farmers and others, I see that there is hardly anyone who is proactive in their approach for innovative practices and development. That is the main drawback existent in banks and also in the farming community.
During my stint at Jabalpur, I met one of the Branch Manager and suggested him to introduce cultivation of vegetable crops under controlled environmental conditions, in a village that falls under his branch’s command area. He immediately came up with excuses that it won't work because people won't accept the idea etc. I asked him to not give-up the idea of introducing the technology. I asked him to select one intelligent, progressive farmer, who looks forward to progressive agricultural methods. Finally he selected a farmer who, with the bank’s financial assistance, established around 1000 sq mt polyhouse. Within the polyhouse that farmer cultivated different types of capsicum.
Seeing this polyhouse, farmers in and around that place started mocking the farmer who ventured into this. Once the crop matured, there was huge demand for capsicum. He started selling it at the rate of almost Rs. 25 to Rs.30/- per Kg. and got brilliant returns for his produce.
In due course of time, all the farmers in that area approached the bank. Almost the entire village began either cultivating capsicum under polyhouses or in the open system.
I provide guidance to all Officers and Branch Managers to try inspiring just one progressive farmer in their area of operation. One person agreeing to try it is worth the effort. Others will soon follow.
In your experience, what have been some of the fulfilling moments as a banker?
I have completed almost 32 years of service as a banker and have discharged my duties in almost all fields of banking. I have worked in rural development and also in retail lending, which is giving loans for housing, vehicles etc. I have also worked in MSME segment, which is consisting of small scale and medium industries.
There are lot of happy moments while working as a Rural Development Officer because when we extend any kind of financial / technical assistance to anyone in the farming community, they feel very happy and treat us like God. People have come and expressed their gratitude for my proactive approach.
When I was working at Paderu branch, Vishakapatanam, we have introduced rose garden cultivation. I had selected a tribal farmer, who was initially too shy to talk to us or come to the bank etc. At our insistence, he came with us to Bangalore, purchased some rose plant seedlings and planted it on his farm at Paderu village. After 1 year, there was a huge demand for roses in and around Paderu and this farmer got elevated from the status of a poor farmer to a mid-level farmer.
With time, he also became proactive and began canvassing other farmers on behalf of our bank. He started sharing his own experience and learning and in course of time he became a prominent personality in his locality. He is now a very sought-after person in that area.
Memories such as these gives me sheer joy.
Please tell us about the SBI Land purchase scheme.
This is honestly not State Bank of India's scheme. The Indian Government has proposed to all nationalised and private banks to give importance to 6 loan schemes; one of which is land-purchase loans. The restriction is that this can be availed only by Marginal farmers.
As per the Reserve Bank of India guidelines, a marginal farmer is one who only possesses a maximum of 1 hectare, which is almost 2 and half acres of land. If a person has less than 2 and half acres of land and falls under the marginal farmer bracket even after purchasing additional piece of land then only, the banker can extend the loan to purchase agricultural land.
This loan can be availed by tenant farmers, lessee holders, share croppers, etc. who does not possess land but are performing agricultural practices. They get financial benefit to purchase land up to 2.5 acres provided the crops which they choose to cultivate will fetch them enough money to repay the loan over a period of 7-10 years’ time.
As per guidelines, only farmers can avail of this loan not people who desire to enter the agricultural sector -prior experience is a requirement.
A lot of people in the IT sector, today,show interest in innovative farming in their own capacity. Are there any bank assistance or schemes that they can avail of?
Yes, definitely! There is no restriction in terms of income criteria to avail loans that come under the agricultural scheme. Even if a person is doing another job he can approach the bank and avail loans. The only thing is some benefits like interest concession etc. will not be available for them. Other than that they are equally eligible for any kind of loan.
Nowadays, we are also of the mind-set that agriculture should not be for sustenance alone. It should become highly profitable for people.
Can you share some of the agricultural schemes that really worked well for the bank and the borrower?
In our country, out of the entire farming community, almost 75-80% falls under the small and marginal farmers' category. The land holding is very less for these farmers who are unable to break free from the poverty circle. They perform agricultural activities for sheer sustenance.
I advise my banker friends that we need to cross-sell our products to farmers who come to avail a small crop loan. This will prove beneficial to the farmer, to the bank and to the economy.
For instance, if a farmer with a family of 4, who is solely dependent on the 2-acre of land approaches the bank for a small crop loan, we bankers should push him to take up a loan for a 4 or 8 animal dairy unit also. This way, we give them an agricultural-allied activity also, which will prove helpful for the farm and the animals. Simultaneously these two activities will prove beneficial for them. Their annual income improves and there will be some contribution from their side for the growth of the GDP and economy of the country.
I always push for farmers who do single-crop cultivation to start integrated farming. This proves beneficial for the betterment of the farmers' community and is the need of the day. The Government is also focused on studying how to double the farmers' income by 2022.
Nowadays there are a lot of advertisements for selling and buying land which was not the case about 10 years ago. Are the banks in anyway helping out with such activities?
Other than marginal farmers, loan for purchase of land, banks are not in favour.
The only possibility is when the land is an estate of plantation crops like tea, coffee, rubber etc. and somebody who has sufficient means want to purchase land to reap good benefits. In such cases banks may finance it. Other than that for cultivation of food crops like cereals, millet, pulses, etc. banks are not in favour of dispensing any kind of loans other than to marginal farmers.
Is cold storage units a project that banks can support?
From a banker’s point of view, giving loans to rural godowns or cold storages is very important. It is part of banks' financing activity because nowadays in India the farming community produces sufficient food-grain products. However, because of the non-availability of storage facilities like rural godowns, cold storages and food and agro-processing industries farmers are unable to store the produce.
For example, the onion price may go up and down because we do not have sufficient rural godowns to store onion. Likewise, in parts of Andhra Pradesh like Kadappa, Ananthapur districts etc. crops like tomato gets produced in abundance but they don't get good prices.
The prices fall despite the market demand for such produce that the farmers are not being able to cover up for the cost of production also, at times. In course of time, they tend to shift their agriculture activity to other crops that can fetch them better benefits.
In the system, the production of staple crops go down and the prices go high. This is the seesaw ride that keeps happening. To arrest such situations we need more rural godowns, cold storages and food and agro-processing industries.
I feel the Government should also start focussing in this space. It shouldn't stop with just dispensing subsidies for these projects. They should focus on the development of such infrastructure in the country so that the farming community make profits and in turn the country can save the hassle of facing future shortages for staple crops.
Forecast estimates say that by 2050, we stand to face food shortages and may need to import food grains as well if we are not proactive.
How are the new generation bankers who are starting out today in comparison with that of your generation?
Honestly, this is a difficult question because we cannot generalize anybody. Having said that, in essence, the passion for anything, I feel, is missing.
Many in the new generation are interested in their own well being than contributing to the development of the society, community and nation. I wouldn't say it is completely washed off but it is falling to some degree. This is my experience.
Since the last 5 years, I am in the capacity of discharging my duties as Faculty member giving training and lectures particularly related to Agriculture. The involvement they show is purely for academic purposes alone. I don't see that involvement to do to improve the conditions of farmers or the economy when they go back to their work field.
Contact
Name SURENDRANATh DORNADULA
Chief Manager
Company Union Bank of India
Union Bank of India Staff College
Kalkere Bannerghatta Road
City BANGALORE
Zip Code 560083
Country India
State KARNATAKA
Phone-9964667489
Email d.surendranath@yahoo.co.in