Chapter - III

THE KDCC BANK: A PROFILE

Purpose and Overview

The present research involves the case study of the NPAs in KDCC Bank. The KDCC
Bank, being a local financial institution, its operations are influenced to a great extent by the
typical liking of the locals towards their institution. The problems of the bank including that
of NPAs are also inter alia associated with this phenomenon. It would therefore, be
interesting to know the establishment, growth and financial performance of the bank since
its inception. In this Chapter an attempt is made to present a chronicle of 85 years of
existence of the KDCC Bank and its profile.

The KDCC Bank: A Chronicle of 85 Years of Existence

Promotion

In North Kanara District, the rural and urban co-operative societies were established in
1905. The co-operative societies were registered under the Co-operative Credit Societies
Act, 1904 which came into operation from 25th March, 1904. The enactment was based on
the Raiffiesen model of co-operative societies which were highly successful in Germany in
solving the problem of rural indebtedness. At that time, North Kanara District was part of
the erstwhile Bombay Province. Though situated at the southern tip of the Bombay
Province far away from the Provincial Headquarters at Bombay, the district did not lag
behind in its participation in co-operative movement.

The Co-operative Credit Societies Act, 1904 had limited applicability as under it, only
rural and urban credit co-operative societies could be registered. It was in fitness of things
that the message and benefits of co-operation, considered the world over as a ray of hope of
the have-nots and certainly not as a weapon of the haves, were to be taken to the masses.
With a view to diversify the area of operation of the co-operative movement into other areas

28
of economic activities the Co-operative Societies Act, 1912 was passed. The enactment
helped the establishment of co-operatives in the areas of industry, marketing, house
construction, distribution of consumer goods, banking etc.

By 1920, 71 co-operative societies were in operation in various parts of the North

Kanara District. With the experience of a decade and a half in establishing and managing
the co-operative societies, the co-operators of the district met at the Chamber of the then
District Collector review the situation and to discuss about the future course of action. The
meeting felt the need for establishment of an intermediary for accepting the deposits of
surplus funds from co-operative societies having them at fair rate of interest and lending the
amount so collected to the co-operative societies suffering from the shortage of funds at
reasonable rate of interest. At about the same time, the Registrar of Co-operative Societies,
Bombay, insisted upon the establishment of a District Central Co-operative Bank for the
North Kanara District. This paved the way for the establishment of The Kanara District
Central Co-operative Bank Limited.

The Kanara District Central Co-operative Bank Limited was registered with the
Registrar of Co-operative Societies, Bombay on 14th June, 1920 under the Co-operative
Societies Act, 1912. The membership of the bank comprised of co-operative societies as
well as individuals. The bank started functioning with a share capital of Rs. 2,025=00. In
1921, the bank had 77 members out of whom 48 were societies and 29 were individuals,
share capital was Rs. 28,600=00, deposits mobilised amounted to Rs. Rs.39,230=00 and the
loans and advances given amounted to Rs. 51,584=00. The first Board of Directors of the
KDCC Bank consisted of nine co-operative leaders of the District:

The First Three Decades: 1921-1949 : In the Path of Extreme Ups

and Downs

The first three decades in the history of the KDCC Bank were characterised by ups and
downs of the extreme forms. The bank could affiliate 50% of the total number of co­
operative societies and finance 50% of the affiliated co-operative societies. The bank’s
deposit schemes met with overwhelming response from the intending depositors. But this
gave rise to the problem of insufficient avenues for deployment of the funds so mobilised.

29
Even the branches, opened by the bank at Kumta and Karwar to spread the message of
development through co-operation, met with poor response and had to be closed down after
some time.

The world’s worst economic depression from 1927 to 1934 brought down the prices of
all commodities including that of the agricultural produce. The unimaginably low level of
prices of agricultural produce coupled with lack of demand made the life a hell for the
farmers. The period witnessed mounting rural indebtedness on the one hand and increasing
overdues to the KDCC Bank on the other. The situation became so serious that at one time
the bank had to stop the acceptance of deposits. The lending activities also suffered a severe
setback resulting in the end of the second decade net loss of Rs. 160/-. Faced with sizeable
unlent funds at its disposal, the bank took a decision to lend money to individuals by
amending the bye-laws in 1939.

The establishment of the Reserve Bank of India on 1st April, 1935 under the Reserve
Bank of India Act, 1934 and its Agricultural Credit Department gave a big boost to the
PACs. This heralded the beginning of the consolidation process for the co-operative
institutions in the country until the onset of the second world war.

The second world war from 1939 to 1945 brought about an upward movement of all
products. As the inflation gained momentum during this period, the farmers were left with
surplus funds to repay their old overdue debts to the bank. The repayment of current debts
was also in time. The lendable funds of the KDCC Bank having increased, the bank had to
step up the lending activities. A beginning was made with the re-opening of the Kumta
Branch on 21st February, 1941.

During the second world war, due to scarcity of essential goods like food grains,
kerosene, cloth etc., the Government exercised control on their distribution. The entrustment
of distribution of essential goods on equitable basis to the consumers was an ample
testimony of the faith of the Government in the co-operative societies. The KDCC Bank on
its part played its role very well in meeting the financial requirements of the co-operative
societies for distribution of essential goods.

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 After India attained independence from the British Rule on 15th August, 1947, the
leaders and statesmen had to decide the destiny of the co-operative movement in
independent India. The co-operative institutions, having already proved their mettle in
serving those in need in pre-independence era, deserved further encouragement. The shape
of things to come was evident from the various developmental policy initiatives taken by
the Reserve Bank of India to take the co-operative movement to greater heights in the years
to come. The end of the third decade in the history of the KDCC Bank witnessed a
reaffirmation of the faith of the rulers and the ruled in the functioning of the co-operative
institutions in the country.

The Fourth Decade: 1950-1959 : Laying Emboldened Steps

In 1950 the Constitution of India was adopted and India became Republic on 26th
January, 1950. While the decentralisation of political power was sought to be achieved
through the establishment of Gram Panchayats under the Panchayati Raj System, the
decentralisation of economic power was to be achieved through the establishment of PACs
in villages.

The economic development of the country was sought to be achieved through the Five
Year Plans. The Planning Commission was set up to decide the plan priorities, prepare the
Five Year Plans and to find the ways and means of implementation of the plans. In the Five
Year Plans, the co-operation was considered as the medium for democratisation of the
economic plans. In the First Five Year Plan (1950-54), co-operation was given a pride of
place by considering it as the integral part of plan implementation.

The Community Development and National Extension Scheme launched to encourage

the local initiative and effort for rural development relied heavily on co-operatives for
implementation of the scheme. The report of the All India Rural Credit Survey Committee
based on an exhaustive and systematic survey of the achievement of the co-operative
movement in the area of rural credit recommended inter alia the State partnership of the co­
operatives. In accordance with this recommendation, the KDCC Bank received Rs. 50,000/-
as State Government’s contribution to its Share Capital and an amount of Rs. 3,25,000/- as
financial assistance from the Reserve Bank of India. The similar financial accommodation

31
to PACs enhanced their borrowing power and improved their financial position. All these
helped the KDCC Bank to financially consolidate itself in a big way to become a strong and
viable organisation.

The introduction of Crop Loan Scheme in 1959, convening the field workers taluk
level conference and their annual conference have enabled the KDCC Bank to reach the
grass roots level in the arena of rural credit. The deployment of fiinds in the form in the
form of agricultural loans and advances increased three fold. At the same time, the funds
from the sources of share capital and deposits also trebled. The number of co-operative
societies affiliated to the bank increased to 297. All these developments emboldened the
bank to open the branches at Siddapur, Mundgod, Haliyal, Bhatkal and Karwar. The bank
started giving Medium Term Loans from its own funds for agricultural purposes. In 1958 an
independent own Head Office Building was constructed at C.P.Bazar, Sirsi.

The Fifth Decade : 1960-1969 : Consolidating the Gains and

Moving Towards Golden Jubilee Celebration

In its quest for resource mobilisation and diversification of activities, the KDCC Bank
started financing consumer co-operative societies and industrial co-operative societies. It
began the lending operations to marketing co-operative societies linking credit with
marketing and financing their procurement operations. The bank opened branches at all
Taluk Headquarters and constructed independent own buildings for Siddapur, Mundgod
and Kumta branches.

The projects of the Agricultural Refinance Corporation for development of fisheries

and pineapple cultivation aided the KDCC Bank in furthering the cause of co-operation in
the district. The establishment of Soil Testing Laboratory in Sirsi benefited the farmers in
increasing their yield which in turn helped the bank in its resource mobilisation efforts. The
appointment of a Survey Committee to study the co-operative credit structure in the district,
acceptance of its report and its implementation in Bhatkal Taluk and adoption of village
Vannalli in Kumta Taluk for intensive activities have enabled the bank to take the co­
operative movement to the grass roots level in the district.

32
 The KDCC Bank organised a pool of secretaries and arranged for their training with
the help of the North Kanara District Co-operative Union. These secretaries were deputed to
the PACs which were in need of their services. The bank was awarded Rolling Shield for
the Best Performing DCCB by The Mysore State Co-operative Apex Bank Limited,
Bangalore.

The end of the decade was the time for the KDCC Bank to celebrate its Golden
Jubilee. The Golden Jubilee Celebration was inaugurated by the then Governor of
Karnataka. It was an occasion for the bank to rededicate itself to the cause of development
of the district through the medium of co-operation. It was also a time for self introspection
for the bank and for identifying its strengths and weaknesses.

The bank had successfully survived the extreme forms of ups and downs in formative
years, the economic depression of the worst kind in 1930s and above all, the disasters which
the co-operatives elsewhere had to face during the period of expansion and diversification.
The bank took the initiative wherever required to develop the co-operative movement on
sound lines in the district. It had amply proved itself as an indispensable participant in the
economic development of the district From the Golden Jubilee Celebration stage, the bank
could look forward with a strong determination and firm resolve to take the co-operative
movement in the district to the greater heights in the years to come.

The Sixth Decade : 1970-1979 : Taking New Initiatives

The report of the All India Rural Credit Review Committee emphasised that the co­
operatives should have a policy framework within which the planning and decision making
had to be attempted. The report became a guiding force and the basis for development of co­
operatives in the coming years. The noteworthy observations of the report are reproduced
below:

“Action in the field of rural credit as in any other field of economic activity will have to
be based on facts as they obtain at the time, as also on the prospects of the future as they
open up. It is necessary that at each level, the authorities and the institutions concerned
should continuously review the developing situation, plan for years ahead and take

33
decisions which are meaningful in terms of both wider policy and the local needs and
conditions”.

The Small Farmers Development Agency (SFDA) launched its Scheme of financing
the farmers with small means in the district in November, 1970. The KDCC Bank accepted
the responsibility for financing the potentially viable agriculturists identified by SFDA. In
the next two years, the bank made commendable progress in providing financial assistance
under the scheme. In 1972, the SFDA Scheme was extended to cover marginal farmers as
well as agricultural labourers. The KDCC Bank was prompt enough to respond to this
change and established itself as a Good Samaritan and the mainstay for the weaker
sections in the rural areas. The financial assistance given by the bank under SFDA Scheme
was both in the form of Seasonal Agricultural Operation Loans (S.A.O. Loans) also called
the Crop Loans and Medium Term Loans (M. T. Loans).

The arecanut is the major commercial crop of the North Kanara District In 1972 the
prices of arecanut started falling steeply throwing the rural economy of the major part of the
district out of gear. The growers of arecanut were directly affected. The merchants in town
who derived their sustenance from the purchases made by the growers of arecanut indirectly
suffered because of decline in purchase inquiries from the growers. The Sirsi, Siddapur and
Yellapur markets in upper ghat areas and Rumta and Honnavar markets in coastal areas
were hit hard by the unprecedented decline in arecanut prices. The decline in price of
commercial crop of arecanut was so severe that its price fell below the price of food crop of
rice. The agricultural labourers also suffered a severe beating in the pocess for lack of
employment opportunities as the employers themselves were finding it difficult to see the
face of money.

hi such a difficult situation, the KDCC bank lent a helping hand to die needy. The
bank extended the time for repayment of S.A.O. Loans and M.T. Loans due for repayment
till the next harvest season. The bank took the initiative in convening a Seminar on
Economic Development of the District. The seminar highlighted the position of areca
cultivation, production, marketing and future programme for stabilising the volatile arecanut
prices. Another important aspect of deliberations in the seminar was on the scope and
opportunity for industrial development of the district. The seminar laid emphasis on
discussion on a systematic planned approach towards the development of small and medium

34
industries in different taluks of the district It provided a platform for review of situation,
exchange of views and ideas to work out a possible line of action to be taken up by the
KDCC Bank and other institutions. The outcome of die seminar inspired the bank to take
the following three initiatives:

(i) The loans to the arecanut growers were converted into Medium Term Loans repayable in
three years. This provided a lifeline to the arecanut growers badly battered by the steep
decline the prices of their output. Thus the bank provided a breathing ground for die areca
farmers who were the major consumers of agricultural credit in the district in their time of
necessity.

(ii) The North Kanara District Chamber of Commerce, Industry and Agriculture was
established with Headquarters at Sirsi after a series of meetings and discussions in different
parts of the district. The KDCC Bank became a Patron of the Chamber by donating a sum of
Rs. 5,000/-

(iii) Due to the sharp downward movement of areca prices, the Government appointed the
Paulose Committee. The report of the Paulose Committee formed the basis for future lines
of policy for cultivation, production and marketing of arecanuts. The combined efforts of
the leaders of areca growers in the States of Karnataka and Kerala together with the active
collaboration of the Governments of these two States resulted in the establishment of The
Central Arecanut Marketing and Processing Co-operative Limited [ CAMPCO ] at
Mangalore. The KDCC Bank in association with The Totgars Co-operative Sale Society
Limited Sira, a leading marketing co-operative society of the district, accepted the
responsibility of collecting more than Rs. 15.00 Lakhs towards the share capital of the
CAMPCO. By doing so, the bank proved itself a true co-operative in associating with
another co-operative engaged in a different line of activity to help promote another co­
operative venture aimed at stabilising the market for arecanuts.

The concept of Rural Banking was introduced after the acceptance by the Government
of the report of the Working Group headed by the then Minister for Railways and Member
of the National Commission on Agriculture. The report recommended that the concept of
Rural Banking should be given a wider connotation and organisational or institutional set up
for providing banking facilities in unbanked rural areas. The result was the establishment of

35
Regional Rural Banks in selected areas and also the establishment of Farmers Service
Society similar to the large sized Multi-Purpose Societies established after the acceptance
by the Government of the report of the All India Rural Credit Survey Committee.

For the purpose of Rural Banking, the policy at the primary level, was to select the best
working society and to transform it into an institution fully multi-purpose in character,
serving as the Rural Bank in the area. The Farmers Service Society could be sponsored
either by a Commercial Bank or by a Co-operative Bank. The KDCC Bank was the pioneer
in organising the first Farmers Service Society at Basgod in Ankola Taluk in November,
1973. This Society covered an area of more than 2,600 acres, population of about 9,000 and
1,900 agricultural families. After two and half years of the establishment of the first
Farmers Service Society at Basgod, the Bank started two more such Societies, one at Baad
in Kumta Taluk and another at Haliyal. The bank arranged to provide the services of
Managing Directors and various kinds of financial assistance to all these three Farmers
Service Societies.

The KDCC Bank took up the diversification of loans to meet the growing requirements
of agricultural development of the district. In doing so, the needs of small and week formers
were fully considered. The loans were given for dairy development, poultry birds,
horticulture, sericulture, pisciculture and gobar gas plants. The KDCC Bank also provided
the financial assistance aggregating to Rs.3.85 Lakhs to rural industrial units through PACs
for weaving work, sewing machine, stone-cutter, brick worker, leather worker, potter, bee­
keeping, shell grit and mineral work, printing and binding, floor mill, saw mill, rice mill and
groundnut oil mill.

The KDCC Bank appointed three Study Teams to identify the local problems and to
explore the possible solutions through co-operative credit.

The First Study Team was appointed to recommend the establishment of an

organisation in Sirsi for marketing of milk. It also recommended the establishment of milk
co-operatives and entrusting of collection of milk to the existing PACs in Sirsi Taluk. The
report also stressed the measures to be taken for fodder development, improvements in
grazing, insemination etc., with a view to provide an effective alternative occupation to
farmers in Sirsi Taluk.

36
 The Second Study Team was appointed to identify the causes of increasing overdues
to co-operatives in Siddapur Taluk and to suggest the possible remedies. Recognising the
gravity of the problem prevailing in the Taluk, the Study Team in its report suggested to
abandon the system of giving loans on the basis of calculations according to the Kale of
finance fixed . In its place the report recommended that the eligibility for loan should be
worked out on die basis of calculation of the average yield basal on the sale of produce
through the co-operative society for the last three years.

The Third Study Team was appointed to undertake the study of the problems of clean
loans and assami (personal) loans given by the Service Societies and Marketing Societies in
the areca growing areas of upper ghat taluks of the district. The report gave due weightage
to the loyalty of the members to the Society. The report mentioned that the loyalty of
members should be the basis of justification for clean loans or consumption loans. It
observed that the farmers who sold all their produce through the co-operative society
deserve the financial accommodation in the form of clean loans or consumption loans apart
from S.A.O. Loans and M.T.Loans.

The Third Study Team in its report recommended that the clean loans or consumption
loans could be given to the extent of a farmer’s gross income worked out on the basis of
sale of his produce for the last three years and deducting therefrom the amount of other
loans like S.A.O. Loans, M.T. Loan Instalments, Long Term Loan Instalments etc., due
from him. The report also laid down the rules and procedure for giving the clean loans and
consumption loans.

During this decade, the KDCC Bank started opening the branches in rural areas. By so
doing, the bank ventured to go near the cultivators to provide them convenient access to the
bank’s services and also to mobilise their deposits. The number of branches opened during
the decade actually doubled as compared to the number of branches opened during the
previous decades. The bank also constituted a Branch Advisory Committee to study and
recommend the opening of branches. The bank opened the branches at Joida, Kansur, Castle
Rock, Salkod, Ramanagar, Kirwatti, Tattihalli, Jugalpet, Kumbarwada, Hiregutti,
Kavalakki, Sadashivgad, Murdeshwar, Heggami, Banavasi and Ulga.

37
 The KDCC Bank made a beginning in providing Safe Deposit Locker facility by
starting the Safe Deposit Vaults at Sirsi and Dandeli branches. The deposit mobilisation
taken up by the bank met with massive response reflecting the confidence reposed by the
depositors in the ability and reliability of the bank. The Karnataka State Co-operative Apex
Bank Limited as well as the Government of Karnataka recognised die achievements of the
bank and awarded prizes for all round performance for five years.

The KDCC Bank was selected for Performance Budgeting Scheme by die Reserve
Bank of India. For the benefit of weaker co-operative societies, the bank launched the
Special Assistance Fund. In all 91 weaker co-operative societies were given financial
assistance of Rs. 2,30,000/- from the Special Assistance Fund during the decade. The
financial assistance so given was mainly to meet the establishment cost of these Co­
operative Societies. The bank undertook the reorganisation of Primary Agricultural Credit
Societies as per the Government policy decision. Such reorganisation resulted in
amalgamation of PACs and reduction of total number of PACs in the district from 222 to
164. The amalgamation brought in certain benefits and also gave rise to certain problems in
the areas of operation of the PACs. In 1976-79, after studying the crop conditions in 96
villages in Mundgod, Haliyal and Supa taluks where annevari of crop was below 6 annas,
the bank took the initiative to convert the S.A.O. Loans into Medium Term Loans.

For the purpose of upholding the interests of the staff, the KDCC Bank took up various
measures to bring about the welfare of its staff. The prominent among the staff welfare
schemes / activities were Employees Benefit Deposit Scheme, Group Gratuity Insurance
Scheme, Housing Loan, Medical Benefits and Leave Fare Concession. The bank
implemented the recommendations of the Reserve Bank of India regarding new staffing
pattern.

The Seventh Decade : 1980-1989 : Diamond Jubilee Celebration

and Record Performance

The KDCC Bank celebrated its Diamond Jubilee on 7* May, 1981. The celebration

was inaugurated by the then Minister for Co-operation, Government of Karnataka. The
Honorable Minister lauded the achievements of the bank in using co-operation as a tool for

38
Imaging about the development of rural economy of the district He expressed satisfaction
that the co-operators of the district despite having divergent social and political affiliations
joined hands to make the co-operative movement nothing but a success. The typical mindset
of the co-operators was manifest in unity for advancement of co-operation but diversity in
furtherance of their individual aspirations.

The Honorable Minister was categorical in stating that the movement, for relief from
repayment of agricultural loans and payment of interest due thereon, would be detrimental
to the economic development of the country and in the long run it would have adverse
impact on the availability of finance for agricultural sector. He made it clear that granting
such exemption would not solve the problems of the farmers and may create new problems
for them in the days to come. The real solution to their problems would be in creating an
atmosphere where the farmers would be able to get fair prices for their produce and that in
attaining stability in prices of farm produce. He also emphasised the importance of
providing, marketing and distribution facilities for agricultural produce and the active
participation of co-operative institutions in bringing about the economic advancement of
their members.

In the year 1980-81, the District Credit Plan was launched. To meet the requirements
of space and other infrastructural facilities at the Head Office of the bank, a new spacious
building with adequate office space, vehicle parking, auditorium, landscaped garden etc.,
was constructed at New Market Yard, Sirsi. The Head Office was shifted from C.P.Bazar
Sirsi to New Market Yard, Sirsi and started functioning from 1st June, 1985. The bank
started giving loans directly to individuals for industrial purposes from 1986-87.

The bank implemented the Crop Insurance Scheme launched by the Government. In
1982-83, 1987-88 and 1988-89 the State Government announced the Interest Waiver
Scheme and later the Loan Waiver Scheme. The schemes adversely affected the loan
recovery position and gave rise to several problems unprecedented in the history of the
bank.

During the decade, there was substantial increase in the loans and advances given by
the bank. The deployment of funds collected as capital and deposits posed a serious problem
for the bank. The bank started giving loans under consortium arrangement. It commenced

39
the giving of loans directly to the individuals few housing purposes. During the decade, die
bank acquired the own building for its Haliyal Branch.

In 1989, the bank received the License of the Reserve Bank of India and the bank had
achieved die distinction of being the first Reserve Bank Licensed DCCB in the State of
Karnataka: During the years from 1981-82 to 1989-90 for all die 10 years the bank was
awarded die prizes for being the Best Performing DCCB from The Karnataka State Co­
operative Apex Bank Limited. This was a record performance in deed.

The Eighth Decade : 1990-1999 : Platinum Jubilee, Achievement

and Awards

During the decade, the KDCC Bank started giving the vehicle loans. It effectively
implemented the Kissan Credit Card Scheme launched by the Central Government through
NABARD. As per the instructions of the Government of Karnataka, the bank opened the an
Extension Counter at Baad in Kumta Taluk. The bank implemented the Business
Development Plan of the Government of Karnataka in selected PACs. The bank framed the
Action Plan for a period of 5 years from 1994-95 and has taken concrete steps to realise the
planned objectives. During the decade the bank acquired its own building for its Ramnagar
branch.

In keeping with the policy of the bank to keep pace with the changes in technology
which would bring about prompt and efficient service to the users, the bank in collaboration
with The Karnataka State Co-operative Apex Bank Limited took up the computerisation of
its operations from 1991-92. By the end of the decade, the computerisation of different
sections of the Head Office and branches at Sirsi, New Market Yard Sirsi, Dandeli, Haliyal,
Kumta and Karwar was completed and the bank had plans on hand to computerise all die
branches in a phased manner in the days to come.

In 1995-96 the NABARD started awarding prizes to the DCCBs in each State. The
award is given in recognition of the DCCB’s role in co-operative movement, administrative
efficiency, managerial competency, human resource development, loan recovery,
implementation of Action Plan, own resource mobilisation, profitability etc. In Karnataka,

40
the KDCC Bank had the honour to secure the first cash prize of Rs. 5.00 Lakhs and the
shield in the very first year of institution of the prizes i.e., 1995-96. In the subsequent year
1996-97 also the bank was awarded the first cash prize of Rs. 5.00 Lakhs and the shield.
Based on its performance, the bank was also awarded die first prizes in the year 1996-97
and second prizes in 1997-98 and 1999-2000 from The Karnataka State Co-operative Apex
Bank Limited.

Women constitute half of population and one-third of the workforce in our country.
The Central and State Governments have recognised the role of women in economic
developmental efforts and devised plans to encourage the women to participate in these
efforts. In order to bring about the organised economic development of the women
belonging to SC / ST and low income groups in the rural areas, the NABARD issued
guidelines to all the banks to set up Women Development Department in their respective
banks. By doing so, the NABARD aimed at giving special attention to bring about the
economic advancement, independence and self-dependence of the poor and downtrodden.
In accordance with the guidelines of the NABARD, the KDCC Bank started Women’s
Development Department on 18-11-1997. One of the women staff members was designated
as the Head of the Department and another woman staff member was designated as the
Assistant. The bank planned to spread this wing to the Branch Level in a phased manner.
From 18-11-1997 to 31-03-2002 the bank sanctioned loans aggregating to Rs. 461.97 Lakhs
to 4,191 women beneficiaries.

1997-98 was the year for celebration of the Golden Jubilee of the Indian independence.
As part of the celebrations, the bank organised Essay Competitions for the co-operators of
the district. The competitions were conducted separately for three categories of co-
operators. Firstly, for the office-bearers of the co-operative institutions, the subject for
the essay was “necessities of the co-operative sector in future”. Secondly, for the employees
(except the employees of the KDCC Bank) of the co-operatives of die district, the subject
was “co-operative movement in India during 50 years after independence” . Thirdly, for the
employees of the KDCC Bank, the subject was “ the role to be played by the KDCC Bank
in the coming days for the integrated development of the district”

In each of the three categories, three prizes were instituted: first cash prize of Rs.
3000=00, second cash prize of Rs.2,000=00 and die third cash prize of Rs. 1,000=00. The

41
competitions met with overwhelming response. In all 84 essays were received, evaluated
and prizes awarded. The bank identified and honoured 7 freedom fighters who served the
cause of co-operative movement in the district on the occasion of the celebration of the
Golden Jubilee of the Indian independence. The bank thus celebrated of the Golden Jubilee
of the Indian independence in the true spirit of co-operation.

In its ceaseless efforts in bringing about the rural economic development, the Self
Help Group Scheme came in handy for the bank. In 1998-99 the bank, for the first time,
formed two Women’s Self Help Groups through the co-operative societies and provided
financial assistance of Rs.20,000=00. In accordance with the guidelines issued by the
Central Government and the NABARD, the bank took up the task of forming the Self Help
Groups, giving the loans to them under the scheme, and implementing the scheme in the
district. By the end of the decade, the bank formed 71 Self Help Groups in collaboration
with the PACs and gave the financial assistance aggregating to Rs. 2,50,000=00.

Moving in the Ninth Decade : 2000-05 : The KDCC Bank in the

Threshold of the New Millennium

From the year 2003-04, the Government of Karnataka introduced Yashaswini Yojana,
a unique health insurance scheme for the benefit of members of the co-operative societies in
rural areas. The KDCC Bank took the lead in the implementation this socially useful
scheme. Its motivational efforts through the co-operative societies resulted in the joining of
61,208 members for the benefits of the scheme.

The giant ‘Tsunami’ waves left behind a trail of death and destruction in South Asia in
the later part of 2004. The east coast of India was worst affected with the loss of thousands
of lives and property worth crores of rupees bringing in its wake the problems of drinking
water, food, epidemics, homelessness and various other kinds of suffering and misery for
the victims. The KDCC Bank contributed a sum of Rs. 2.00 Lakhs to the Chief Minister’s
Relief Fund in aid of the ‘Tsunami’ victims.

In the 2004-05 the KDCC Bank framed the Educational Loan Scheme for the benefit
of the students who wish to pursue higher education in medicine, engineering, accountancy,

42
business administration, computer applications etc. By introducing tins scheme, the bank
hoped to fulfill the aspirants of higher education and to help them to realise their dreams.

The bank played a dominant role in the field of agricultural finance in the district. The
entry of nationalised banks into the agricultural credit sector did not affect the position and
performance of the bank in that sector. In fact die bank carved out a niche for itself in
financing the downtrodden and weaker sections of the society in mofussil areas which no
other bank or financial institution could match. All this was possible with the collaborative
spirit with which the PACs went hand in hand in this worthy cause. Without doubt, all the
co-operative institutions in the district unreservedly supported one another to realise the
ideals of the co-operative movement in the district.

The KDCC Bank has lived upto the expectations of the people of Uttar Kannada
District. Its commitment to the continuous upliftment of the rural economy of the district is
unparalleled. The meritorious performance of the KDCC Bank has resulted in continuation
of prizes being awarded to it. The bank secured the second prize from the Karnataka State
Co-operative Bank Limited and second prize of Rs. 1,50,000 =00 from the NABARD for
the year 2000-01. The bank was recognised as the Best Performing DCCB in the State and
Cash Prize from the Karnataka State Co-operative Bank Limited for the year 2002-03 and
2003-04.

Since inception, the KDCC Bank strived to fulfil the aspirations of its founding
fathers, the role assigned to it under various policies of the Government and socio-economic
obligations thrust on it to bring the message of co-operation to the doors of people of the
district. In doing so the bank encountered many problems from all fronts as are common
with any one who performs. The changes structural and administrative were necessary
which could not be attained because of various constraints. In the areas of public relations
and management the bank had to think of its own approach commensurate with the needs of
the fanners by consolidating the gains achieved in previous decades.

43
Location

The Head Office of the KDCC Bank is located in Sirsi town in Sirsi Taluk. Sirsi is
centrally located in North Kanara District (also called Uttar Kannada District) in the State of
Karnataka in India. Sirsi is always a centre of attraction by lush greenery all die year round.
Lying on the lap of Sahyadri range of western ghats, the physiography of Sirsi town is
characterised by beautiful hills and dales with rich natural vegetation on the outskirts. The
Head Office of the KDCC Bank is situated on top of one of such hills near the Regulated
Market of Sirsi, with well laid out roads and other essential infrastructure. On this
picturesque hill location stands the magnificent Head Office building of the KDCC Bank
constructed on a sprawling half acre of land with landscaped garden, adequate office space,
vehicle parking lot, auditorium, etc.

44
 KARNATAKA STATE

ANDHRA PRADESH

* State Headquarters District Headquarters

45
 NORTH KANARA DISTRICT
(UTTARA KANNADA DISTRICT)

ARAB AN SEA

H : The Location of the Head Office of The Kanara District Central Co-operative Bank Ltd
* District Headquarters ■ Taluka Headquarters

46
Branch Network

The services of a bank can reach the ultimate users only when the bank has well
established network of branches. It is through the branches that a bank can give what it has
to those who want it. Over the years, the KDCC Bank ventured to establish the branches in
taluka places and then in centres of groups of villages. It had been the endeavour of the
Bank to reach the last man in every village by establishing the branch at the place of his
convenience. As on 31st March, 2005, the bank has well established 46 branches in the
district. The places of branches and dates of their establishment are shown in Table m. 1

Table m .1: Places of Branches and Dates of their Establishment

S.No. Place of Branch Date of Establishment

1. Kumta 21-02-1941
2. Siddapur 05-11-1951
3. Bhatkal 07-03-1956
4. Haliyal 15-03-1958
5. Karwar 30-03-1958
6. Mundgod 15-11-1959
7. Yellapur 01-01-1961
8. Ankola 28-07-1962
9. Honnavar 07-10-1965
10. Dandeli 21-11-1967
11. Manchikeri 12-06-1969
12. Hulekal 05-03-1970
13. Herur 24-04-1970
14. New Market Yard, Sirsi 19-06-1970
15. Kansur 21-10-1971
16. Castle Rock 20-12-1971
17. Gullapur 21-02-1973
18. Kirwatti 24-03-1973

47
 S.No. Place of Branch Date of Establishment

19. Tattihalli 21-05-1973

20. Salkod 22-05-1973
21. Jagalpet 11-06-1973
22. Kumbarwada (Extension Counter) 12-06-1973
23. Hiregutti 09-02-1974
24. Kavalakki 23-10-1974
25. Sadashivgad 08-05-1976
26. Murdeshwar 19-06-1977
27. Heggami 24-06-1977
28. Banavasi 26-11-1977
29. Ulaga 11-03-1978
30. Gokam 06-04-1981
31. Sirsi (C.P.Bazar) 01-07-1981
32. Itagi 03-07-1982
33. Ramnagar 21-04-1986
34. Bankikodla 28-05-1987
35. Ambewadi 06-02-1988
36. Murkwada 28-05-1990
37. Baad 27-04-1992
38. Majali 02-07-1993
39. Miijan 23-01-1998
40. Karki 23-01-1998
41. Kadra 20-08-1998
42. Kalleshwara 25-02-1999
43. Salkani 05-01-2000
44. Joida 22-06-2000
45. A.P.M.C. Yard, Siddapur 27-11-2000
46. Women Branch Marigudi Bazar, Sirsi 21-03-2001

Source : Annual Report of the KDCC Bank for 2004-05

48
 BRANCH NETWORK
OF

• Branch Locations

Sirsi • 3 : Three Branches in Sirsi are : (1) Sirsi Branch at C.P. Bazar, (2) New Market Yard Branch,
and (3) Women’s Branch at Marigudi Bazar.
Siddapur • 2 : Two Branches in Siddapur are : (1) Siddapur Branch, Jog Road and (2) A.P.M.C. Yard Branch
H : The Location of the Head Office of The Kanara District Central Co-operative Bank Ltd.,

49
Organisational Hierarchy

The management of the KDCC Bank is vested in the Board of Directors. The Board is
comprised of the Chairman, 15 elected Directors, Deputy Registrar of Co-operative
Societies, Karwar as Director, and Managing Director. The Board meets from time to time
to take decisions for the management of the affairs of the bank. The day-to-day management
is entrusted to the Managing Director Who is the Chief Executive Officer of the bank. He is
the principal officer of die bank responsible for the implementation of the decisions of the
Board, compliance of the statutory requirements and a vital and the only link between the
Board and the staff. The organisational hierarchy of the bank is represented in the figure
given below.

50
 0KQAH1SA rtOHAL HtE&AKCHYIN THE KVCC BANK

BOARD OF DIRECTORS

Chairman (1)

Vice- Chairman (1)

Directors
(Elected Directors: 15)
(Deputy Registrar of Co-operative Societies, Karwar: 1)
Managing Director (1)

I
General Manager (GM)
(1)
(Also in charge of
Planning and Development)

▼
Assistant General Managers (AGMs)
(4)

AGM AGM AGM Manager AGM

Establishment Accounts Planning Non-Farm Farm Sector
& & & Sector Loans Loans (FS)
Administration Operations Development (NFS)

| | |

I
Superintendent
1
Superintendent
i
Superintendent
i
Superintendent

1
Divisional Officers

l
Branch Managers, Officers and Other Staff

51
Operational and Financial Highlights

The KDCC Bank has been growing from strength to strength since its inception. The
fact that the bank earned profit in 84 out of 85 years speaks volumes about its financial
performance. The net loss of Rs. 160=00 was in one year during the world’s worst
economic depression from 1927-1934. The operational and financial highlights of the
KDCC Bank in terms of share capital, reserves, deposits, working capital, loans and
advances, recovery, and net profit are shown in Table in. 2

52
Table EEL 2 : Operational and Financial Highlights of the KDCC Bank (Rs. in Lakhs)

Year Share Capital Reserves Deposits Working Loans and Recovery in Net Profit
Capital Advances Percentage
as on
31st March

1997-98 428.17 1,140.24 17,680.09 21,643.13 12,224.59 96.6 257.05

<N
tr%
CN
<N
vi
1998-99 513.09 1,675.45 27,133.59 12,208.40 95.6 152.95

1999-00 617.23 1,879.54 28,651.24 35,201.04 15,633.65 94.0 200.30

o
©
c<t
vq
oo
00

cn
cn

cs
Os
oo
*
2000-01 722.00 36,335.40 16,715.80 98.3 164.80

2001-02 835.30 2,249.76 31,945.47 38,824.04 20,862.30 94.7 195.71

2002-03 968.54 2,635.06 34,949.49 42,331.79 22,652.97 96.2 211.23

Os

A
3
2003-04 1,024.68 37,654.26 44,795.31 22,558.67 94.26 118.02

2004-05 1,053.96 2,964.61 40,358.72 47,382.03 24,758.65 83.42 141.13

Source : Official records o f the KDCC Bank fo r the related years.

53