The performance of the State Public Undertakings recorded a negative return on investment (ROI) of 34.38% in 1992-93. The compound annual growth rate of manufacturing sector in the state records a negative rate of 7.4% during the period from 1991-92 to 1996-97 (RBI). One finds lack of necessary optimum exercises including financial networking as one of the major factors. The Bank-Industry-Economy interaction needs a thorough review in the light of new imperatives of globalization.
The recovery-performance speaks of the efficiency and maturity of the financial sector. Because delay is costlier and interests amount over time. It is less than 20% as against 63% All India Average. The recovery performance of the Manipur State Co-operative Bank could be only 4%, the lowest in the country. Lack of incremental income accounted for 60%, lack of proper facility to repay 31% and willful default 9%. This speaks of the lack of “pre-investment appraisal” of the proposed unit of investment.
There are four other general reasons namely bad recovery climate, weak collateral’s, Law and Order and low banking habit. The whole atmosphere has four other implications as well; a) larger providing b) low profitability and c) low eligibility and d) low ground level actual credit (leakages).
As a matter of practical necessity the “credit planning” should be prepared as part of the Development Planning of the area, otherwise it amounts to cart before the horse and the baby is already dead before it is born. The consistency and functional unity should be the principal article of faith. Therefore much remains to be done-right from the level of Village Development Plan.
The people-banking relationship is now undergoing a radical change in the State with both sides appreciating a new their respective roles, capacities and approaches. In the process, a new healthy atmosphere of viable financing and responsible entrepreneurs is slowly but surely taking shape.