April 21, 2024

The Bihar

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Annual credit plan on state priority list

2 min read

Patna: Achieving the target of disbursing Rs 1.1 lakh crore in loans in Bihar will be one of the key points on the agenda of the state-level bankers’ committee (SLBC) at its next meeting on February 20.

Deputy chief minister Sushil Kumar Modi, who heads the finance department, is scheduled to chair this important meeting in which banking-related data up to December 31 last year will provide the base for discussions.

As of now, banks in Bihar have disbursed loans worth Rs 73,215 crore till December 31 last year, which is around 66 per cent of the annual target of Rs 1.1 lakh crore.

“We hope to register a major jump in the loan figures in the last quarter (January to March) of the fiscal year, when a large number of loan proposals are approved and amounts are disbursed accordingly,” a senior SLBC official told The Telegraph on Thursday.

The official cited figures from the previous fiscal (2016-17) to substantiate his claim. “Banks in Bihar have disbursed around 65 per cent of the annual credit plan target of Rs 1 lakh till December 2016 but this figure jumped to around 89 per cent by the end of the fiscal. We expect better jump in the last quarter of current fiscal,” he said.

“The state government, however, is not going to be satisfied,” hinted a senior official, with anything less than cent per cent achievement of the annual credit plan.

“Loan off take in Bihar is already very low in comparison to developed states. If banks are not able to meet even the modest target given to them, how would the economy of the state grow? The state government would ask the banks to ensure that the targets are achieved,” a senior government official said.

There appears logic in the claim of this official as credit-deposit ratio is quite low in the state.

Unlike the developed states like Maharashtra and Tamil Nadu, which have credit-deposits (CD) ratio of over 100 per cent, Bihar had a deposit ratio of 43.64 per cent till December, 2017, around two per cent more (41.28 per cent) than what it was in December 2016.

The credit-deposits (CD) ratio in Bihar is quite less than even the national average of 73.6 per cent.

Credit-deposits ratio signifies the percentage of credit, which goes out to people of a geographical area against the deposits made by them with various commercial banks operating in that area.

A higher ratio indicates that a good chunk of deposited sum is being used in productive work, whereas a low percentage shows that the deposited money is not being pumped into the economy due to lack of such activities.

The state government will raise this issue during the state-level bankers’ committee meeting.

Courtesy: The Telegraph

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