Banking on Pranab

As finance minister, the only tangible difference that Pranab Mukherjee brought about in Jangipur, his constituency, was plenty of bank branches. Now that he could become the next president, residents of Jangipur don’t know what to expect

The house is big and colorful — white walls with touches of yellow, brown, red and blue — but forbidding. The black iron-gate at the entrance is massive, and the glass on the windows is dark. There are no flowers blooming in the garden next to the driveway. The road to the house passes through a busy bazaar and acres of farm land. The house at Devli village in Jangipur subdivision of West Bengal’s Murshidabad district belongs to Pranab Mukherjee, the former finance minister who, in all likelihood, will soon become the next president of India. Mukherjee has represented Jangipur in Parliament since 2004. In the last few years, this is where he has chosen to spend his weekends, except during the budget session of Parliament.

Facing the house is a square hut. Windowless, its walls are made of mud but the roof is tiled. Cow-dung cakes are plastered liberally on its brown walls. Dipak Majhi, a flautist, is the owner of this hut. Poverty has not robbed him of the faculty to observe and comment. “It is a matter of pride for us that the person who we have voted for is becoming president. He has done many things, like opening banks in our region, but it is only meant for rich people, the capitalists. We have hardly any money to eat. What do we do with banks,” asks the philosopher-economist.

There are 78 bank branches in this subdivision of around 1.8 million people. A quarter of Murshidabad’s banks are in Jangipur, which accounts for around 20 per cent of the district’s population. Most of these sprang up after Mukherjee moved to the finance ministry in 2009.

Apart from this, Jangipur gained very little during Mukherjee’s tenure at the helm of the Indian economy — a food park, a management development institute and a campus of Aligarh Muslim University, which is now faced with problems of land acquisition. The opening of a new provident fund office in Jangipur, too, has helped. Murshidabad is one of the poorest districts of West Bengal, where only 0.01 per cent of farmers hold more than two hectares of land.

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Banks are regulated by the Reserve Bank of India. The finance ministry controls state-owned banks (the government owns a majority of the shares in all 21 such banks) and appoints the directors on the board as well as top executives. Though they are supposed to be autonomous, the rapid opening of bank branches in Jangipur shows how eager the public-sector banks are to stay in the finance minister’s good books.

Something similar happened in Sivaganga constituency of Tamil Nadu when P Chidambaram was Union finance minister (2004 to 2009) — banks, state-owned as well as private, fell over each other to open branches there. Most of the banks are still there, though, according to sources, the “intensity” of banking has come down. The only people who fear the exodus of banks from Jangipur are the around 200-odd staff of these newly opened banks.

At the moment, it’s a problem of plenty. Omarpur, a small town on the way to Mukherjee’s home in Jangipur, has seen 20 banks spring up in the last couple of years. From private banks like ICICI Bank and Axis Bank to Bangiya Gramin Vikash Bank (a regional rural bank) and state-owned United Bank of India, the people of Omarpur are clearly spoilt for choice. There are too many banks chasing too few customers. Customers are therefore treated like royalty here. So intense is the competition among banks in Omarpur that in the last one year, around four branch managers have sought transfers because they found it impossible to meet the business targets assigned them.

Several newly-constructed, two-storeyed buildings house these multiple banks — often their facades are unpainted but the interiors are plush. But the cash counters are deserted, chairs are empty and the staff has little work. “There are so many banks in Jangipur that there is little scope for business,” says the officer-in-charge of one of the 14 branches of State Bank of India in Jangipur.

Across the street is a branch of UCO Bank. At 11 am, there are just three customers at the five cash counters. “We do a lot of social work such as opening accounts for the Mahatma Gandhi National Rural Employment Guarantee Scheme, widow and old-age pension accounts,” says the bank manager. “It is not viable to run a bank here,” says the officer of a private bank in Jangipur. He doesn’t know how long his bank can survive with such low business volumes.

The beneficiaries of the explosion in the banking network here have been the traders. At the Oriental Bank of Commerce, more than 90 per cent of the customers are traders, and so is the case with HDFC Bank.

Ironically, in spite of the proliferation of banks, the credit-deposit ratio in Murshidabad declined from 47 per cent in March 2009 to 42 per cent in March 2010 and 36 per cent in December 2011, according to data made available by the State Bankers Committee of West Bengal. In other words, money collected in the district is increasingly being lent elsewhere. In fact, Murshidabad is one of few districts in West Bengal where crop loans for the year 2012-13 are projected to decline by 6.42 per cent from the previous year. The number of Kisan Credit Cards issued in the district by commercial banks too declined in 2011-12 over the previous year – so much for financial inclusion.

What is the reason? “The land records in Jangipur are so complicated that it is very difficult to give loans,” says the bank manager of a state-owned bank in the area. In spite of the large presence of banks, microfinance companies are flourishing here.

Bandhan, a micro lender, says its loan book has grown one-and-a-half times since 2009 to Rs 152 crore. The reason is not hard to find. The banks are located in areas that are accessible by road and have power connection. Everywhere else in poorly-developed Murshidabad, in remote villages and tiny hamlets, microfinance companies rule the roost.

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Soon after becoming finance minister, Mukherjee had announced that a food park would be set up in Jangipur on an investment of around Rs 150 crore. The project would be a public-private partnership, promoted by the West Bengal state food processing and horticulture department, under the mega food parks scheme of the Union ministry of food processing industries.

The project was announced in 2009, but work picked up only recently in October when Mukherjee personally visited the site and asked the project management consultant, Mott McDonald, to ensure speedy completion.

Apart from the food park, no major industry has come up in Murshidabad in the last few years. And for a district with only two industrial projects — a thermal power plant in Farakka and another in Sagardighi — a food park is too little to set the development agenda rolling.

Ironically, almost Rs 6 crore from the MPLAD (Member of Parliament Local Area Development) fund remains unspent in Jangipur since 2009. No money was released in 2011-12, against an entitlement of Rs 5 crore. Under the MPLAD scheme, an MP can suggest to the district collector public works to the tune of Rs 5 crore every year in his constituency.

Recently, when Mukherjee was in Jangipur to inaugurate a bank branch, he was heard saying, “No matter where I am, I will never forget Jangipur.” Perhaps, it is a sentiment shared by the people of Jangipur who find Mukherjee as close as a next-door neighbour, yet too far to reach out for help. “I wanted to meet Pranab babu because I wanted to get a loan from the bank, but I never got the chance,” rues Savitri Ghosh in Devli village. Again, there are people like Ramkarishna Mohapatra, a bidi worker, who says his wages increased after Mukherjee became finance minister. In any case, Mukherjee has more than one reason to come back to Jangipur, be it for his new house, or the affection of his voters and children who call him Pranab dadu.