A team lead by N Gopalakrishnan, chief general manager (CGM), LHO, Lucknow visited Gunji in September 2000 and developed strategic alternatives for the revival of the branch. It recommended the following actions:

• Relocate branch to more populated places i.e. Sosa/Pangu during closure period.
• Convert into satellite branch of SBI, Dharchula.
• Continue at Gunji during trade period and at Dharchula during closure period.

Indo - China Border Trade Spot Rates of Foreign Exhange Takalakot (China)
Currency	Selling	Buying
Yuan per Dollar	8.3 Yuan	5.5-5.8 Yuan
Rupee per Yuan	Rs. 5.8 -6.0	Rs 4.0 - 4.5

To date, no initiative has been taken to implement the relocation strategy. The satellite branch conversion strategy was turned down on the pretext of the Reserve Bank of India (RBI) guidelines. In the mean time Gopalakrishnan was transferred and the commitment was diluted.

Foreign Exchange Facilities

The forex facilities, despite several efforts, were not provided on the pretext that the ICBT followed the barter system before 1962 and only foodgrains were exchanged for wool and salt. However, other trade transactions were conducted in the respective currencies. At present, the ICBT transactions are conducted in Yuan and Chinese traders have a trade monopoly. The forex issue was discussed in two meetings, one held in April 1996, chaired by Dr S S Pangti, principal secretary, Uttarakhand Vikas Vibhag, Government of UP, Lucknow, and the other held in July 1997 chaired by S M Acharya, joint secretary, MOC, New Delhi. It was decided that the profitability accruing the Indian traders, who are engaged in border trade in harsh terrain and adverse weather conditions, stands considerably reduced because of their inability to repatriate their sales proceeds for want of forex facilities.

The forex issue was discussed again in March 2001 in a meeting chaired by N N Prasad, secretary tourism, Government of Uttaranchal. Instructions were sent to Rohit Joshi, lead bank officer, SBI, Pithoragarh, to arrange forex facilities from US dollars and Yuan to Indian Currency (IC) at SBI, Gunji when it reopened during the trade period in June 2001. But all efforts have been in vain and forex facilities have not been provided at the branch.

Last year, Laxmi Vilas Bank, Bangalore, arranged forex facilities for Hads Enterprises, Ajmer, to import a consignment of 35 tonnes raw silk worth US$ 9,15,211.90 through ICBT. During 2001, the total export was Rs 20,83,886 and import surged to Rs 5,02,90,957. No cess is applicable on raw silk import through ICBT and the trade has had serious implications for local raw silk production and the local silk industry may perish in the near future just as free sheep and wool import has been fatal for the local handloom/cottage industries in Pithoragarh.

Recommendations

In the light of above findings, the following strategic alternatives are recommended:

• The trade protocol between People’s Republic of China (PRC) and Republic of India (ROI) envisaged trade period from 1st June to 30th September. This can be extended upto 31st October with mutual consent of both countries. SBI, Gunji should start banking operations from 1st June instead of the arbitrarily decided 15th June.
• Export credit support may be provided round the year through SBI, Gunji. The service area network should be immediately separated from the Dharchula branch and agriculture credit support may also be provided through SBI, Gunji.
• To gain the confidence of customers, SBI, Gunji may be relocated at Pangu/Sosa during closure period i.e. November to May. A team of two executives, one from regional office, Almora and one lead bank officer from Pithoragarh may be deputed to decide the final place.
• A suitable package of incentives may be given to employees and a minimum of three employees should be posted to manage the branch for one-year periods instead of a three-year tenure.
• To quote forex values on receipt vouchers, satellite phone facilities available at Gunji during the trade period, can be utilized by SBI on rental basis.

The action strategies are simple and urgent for the revival of banking services at SBI, Gunji. Nabard and SBI administrations must show courage and leadership to revamp and convert SBI, Gunji, into a profit-making branch.

Source: KM Yatra Adhikari, KMVN Ltd., Nainital.

The author is a member of Provincial Veterinary Services, UP and member NAV Sc., New Delhi.