Imphal, June 11 2009: State Level Banking Committee constituted by the government of Manipur has proposed for opening of "hub" branches in the unbanked blocks in the state, an official source said today.

The banking outreach in the state, particularly in the hill districts, is significantly low.

Only 96 banks branches are operating in the state.

Out of this nine branches of the Manipur Rural bank are not functioning.

Out of 41 blocks of the state across the nine districts, 19 blocks are unbanked.

Many outreach indicators for the state like average population covered per bank branch, deposit and credit growth etc.

are generally adverse to the national averages.

The position is so on account of several impediments in penetration of banking/financial services in the state, which include difficult terrain, sparsely distributed population in hill regions, poor infrastructure, difficulties in obtaining land as collateral, insurgency/law and order problems, complicated system/procedures of banks, lack of awareness amongst large segments of population about formal banking transaction.

The committee on finance sector plan for north east region has recommended for opening of more new branches ad appointment of business correspondent/business, facilitator for these unbanked blocks in the state.

Since, it has been not materialized, the proposal for opening of 'hub" branches has been put forwarded by the State Level Banking Committee during a special meeting of the committee with the state government authorities recently, the source said.

The Banking scenario of Manipur has undergone a sea-change over the years.

There was only 37 (thirty seven) numbers of scheduled commercial bank offices during the year 1981 .

The number was more than double during the year 1991 and it was recorded as 87 (eighty seven).

As on 31st March 2007 there was only 77 (seventy seven) scheduled commercial banking offices in the state.

Out of the total number of 77 offices 44.16 percent were in the rural areas, 25.97 percent in the semi-urban areas and 29.87 percent in the urban areas.

As on 31st March 2007, the average population per bank offices of the state was 36.8 thousands.

The aggregate deposits of Scheduled Commercial Banks in the State during the year 2006 was Rs.121400 lakhs.

The volume of the deposits to these banks in the year 2007 was Rs.144000 lakhs which shows an increase of 18.62 percent with that of previous year.

The volume of total credit deployed by these banks was Rs.61500 lakhs as on 31st March 2006 which increased to Rs.76900 lakhs as on 31st March 2007.Thus an increase of 67.23 percent was observed in March, 2007 over that of March, 2006 .

A banking is an institution which deals mainly in credit by way of accepting deposits of money for the purpose of lending or investment, from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise.

The need for a well-developed banking system in the economic life of the state can hardly be exaggerated.

Growth of industry and trade has necessitated the development of banks and other financial institutions.

Commercial Banks constitute the most important segment of the banking organisations.

Their main functions are to accept deposits and to provide short term loans.

They also discount bills of exchange and perform a number of subsidiary and general utility functions.

In India, Scheduled Commercial Banks are categorized into five different groups according to their ownership and/or natural of operation.

These bank Groups are (i) State Bank of India and its associates, (ii) Nationalised Banks, (iii) Regional Rural Banks, (iv) Foreign Banks and (v) Other Indian Scheduled Commercial Banks (in the private Sector) .

The total number of scheduled commercial banking offices in Manipur was 77 as on 31st March 2007 of which State Bank of India accounted for 18 offices.

Manipur Rural Banks had the highest number of offices in the state with a total of 28 offices, followed by the State Bank of India and United Bank of India with 18 and 15 respectively in the State.

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