06.09.2008

• SBI’s fresh attempts at financial inclusion
• State Bank of India has revised a scheme, under which it provides loans to farmers to free them from the clutches of money lenders. The scheme enables farmers to avail of term loans at 12% interest to clear 100% of the sum owed to money lenders, if the debt is on account of cultivation or farm activity, or Rs 50,000, whichever is lower. The scheme will be for farmers owning land, existing or prospective.
• This is an improved version of the government’s 2004 “debt swapping of borrowers’ scheme” that did not meet with much success. The scheme then had capped the quantity of loan disbursal at 20% of the production credit required, based on farmers’ land holding and cropping pattern, or Rs 50,000, whichever was lower.
• SBI’s revised scheme comes in wake of the government fixing a 3% farm credit target for banks towards debt swapping of borrowers from the current financial year (FY09).
• In this context one concept that is worth our attention is the DSCR – Debt Service Coverage Ratio
• In the above scheme a gross debt service coverage ratio (DSCR) of 1.75 will be maintained to take over the farmers’ indebtedness to usurious sources.
• DSCR gauges the repayment capacity of a borrower. Simply put, this means that for every Re 1 loan that the farmer is required to repay as a term loan instalment, his surplus income should be Rs 1.75.
• In defence of TADA and POTA
• Want a good piece to buttress your arguments about legislations of this type? Where else can you turn, except a Supreme Court lawyer? Look at this very good piece that is written in their favour. Worth a read.
• What are the factors that are hindering the higher allocation of credit to agriculture?
• Lack of awareness, high risk perception, and strong presence of informal means of finance coupled with complex socio-political issues and knee-jerk reactions by governments from time to time in the event of crises.
• What measures does our credit policy take to ensure credit to agriculture?
• The policy mandates that in the case of domestic scheduled commercial banks, except regional rural banks (RRBs), 18% of the total loans and advances as well as non-SLR investments have to be directed towards the agriculture sector.
• Advances to the agriculture sector can be in the form of direct finance or indirect finance.
• Indirect finance is limited to a maximum of 25% of the specified 18% (that is, a total of 4.5% of loans and advances).
• Any shortfall from this 18% requirement needs to be deposited in the Rural Infrastructure Development Fund (RIDF) of National Bank for Agriculture and Rural Development (NABARD).
• Do you know the loopholes that exist in the above scheme of things? Look at these two:
• The way the deposits into RIDF are organised, doesn’t penalize banks that lend less to agriculture. That’s why the lending to agriculture at the gross national level rarely reaches the mandated minimum.
• Secondly, banks prefer the easier route of indirect lending. The nimble private sector banks manage lower NPAs compared with their public sector brethren.
• Confused about the above two points? Read this piece for details.
• BMW hit and run case; Sanjeev Nanda gets 5 year jail term
• Ranchi villagers set a precedent
• Even as the Tatas are contemplating a total withdrawal from Singur, villagers of Mesra, Vikash and Kuju, about 15 km from Ranchi, have offered to give their land to the company.
• The villagers are, in fact, ready to give their land to ArcelorMittal as well, in case the Singur issue is resolved and it stays with West Bengal.
• ArcelorMittal is facing resistance in Gumla and Khunti areas, where the company plans to set up its greenfield plant.
• A resolution to offer the land was passed during a meeting convened by Jharkhand Andolankari Morcha (JAM) on Thursday evening which was attended by over 150 representatives of the three villages, who expressed their willingness to offer their land — more than 2,000 acre — for the project.
• Obama will be a darling for India; at least on one count
• He is reported to have said that Pakistan is using the American aid for preparing for a war against India.
• Obituary: Melendez
• Bill Melendez, the Emmy Award-winning animator of more than 70 cartoons featuring characters from the Peanuts comic strip, died at a hospital in Santa Monica, California. He was 91. Melendez died on Tuesday and his most famous work was “A Charlie Brown Christmas”, a half-hour special produced in 1965.
• What is the Diagram prize about?
• It is a humorous literary award, normally given each year to the book with the oddest title.
• The award was created by Horace Bent, and first presented at the Frankfurt Book Fair in 1978 by the British magazine Bookseller.
• Nominees are selected from submissions sent in by librarians, publishers, and booksellers, and the final winner is voted for by the public.
• The prize is a magnum of champagne and increased publicity for both the book and its author.
• In 2008, a special "Diagram of Diagrams" award was announced to the book with the oddest title that had already won the original Diagram Prize. The winner is: ‘Greek Rural Postmen and Their Cancellation Numbers.’ It won the award initially in 1996.
• Leander’s dreams go up in smoke. Better luck next time.
• Leander Paes’ dream of doing what he did in Wimbledon 1999, that of winning the mixed doubles and men’s doubles crowns went up in smoke on Friday. He and Czech partner Lukas Dlouhy lost to the Bryan twins Bob and Mike, the second seeds in two dramatic tie-break sets 7-6 (5), 7-6 (10).
• Earlier in the tournament, Paes won the mixed doubles crown with Zimbabwe’s Cara Black.
• The semi-final line up for men at Flushing Meadows
• Rafael Nadal v Andy Murray
• Roger Federer and Novak Djokovic
• Billiards: Geeth Sethi felled
• Pankaj Advani beat Geet Sethi, with a brilliant show in the final of the ONGCIBSF World Billiards Championship held at Bangalore.