CM urges banks to raise credit ratio

Patna: Chief minister Nitish Kumar on Saturday asked banks to enhance the credit deposit (CD) ratio in the state and open more branches to provide banking facilities to a large number of people living in the rural hinterlands.

He also asserted in the light of the recent killing of a bank branch manager in Jehanabad that the state government will provide full security to them. “Do increase the CD ratio here. People of Bihar have trust in banks, hence deposit their money but you are giving it as credit in southern and western states,” Nitish said, while speaking at 64th State Level Bankers’ Committee (SLBC) meeting. “The CD ratio in Bihar is still below 50 per cent, while in many other states, it is more than 100 per cent. It is even less than the national average,” he added.

CD ratio of a state is a measurement of how much the banks have lent out of the deposits they have mobilised. Though the Reserve Bank of India (RBI) does not stipulate an ideal level for it, a low ratio indicates that banks are not making optimum use of their resources to aid economic development. Economists say a low ratio stagnates developmental activities in the state, which necessarily ride on loans.

Bihar’s CD ratio was 45.38 per cent during financial year 2017-18, while the all-India average stands at 78 per cent. Several districts in the state like Saran, Siwan, Gopalganj, Munger, Bhojpur and Darbhanga have CD ratio that is less than 33 per cent.

Continuing in the same vein at the meeting in which deputy chief minister Sushil Kumar Modi, several ministers, senior administrative officials and bankers were present, Nitish lambasted the banks for not lending to the people of Bihar. “So many scams have come to light in the banks. Big people take Rs 10,000 crore – Rs 13,000 crore loans from you and run away, but common people are unable to get credit of even Rs 1 lakh or Rs 2 lakh. How does this happen,” Nitish said.

“You all are very tight in debt recovery from the poor, but the rich people flee with so much money. We are concerned with this because the money is meant for the development of the country. Banks are autonomous, but their role is very important for country’s development so transparency is needed in their activities,” the chief minister added.

Nitish asked the banks to help small industries with credit as Bihar was a land-locked state and big industries would not come here unless special category status is accorded to it. He also asserted that despite all the limitations, the state has clocked economic growth in double digits over the past decade.

Nitish also pointed that many times wrong-doings are detected in banks but no action is taken and suggested that this should change.

Hitting out at banks over lack of branches in Bihar, the chief minister asked them to open more across the state so that people could avail banking facilities. “All welfare and business work happen through you. So you will have to open more branches in the state. The RBI stipulates one branch for every 5,000 people. The country has a branch at 11,000 population, but in Bihar there is a branch at 16,000 people. This needs to be improved,” Nitish said.

Nitish also asked the banks to conduct micro-level monitoring to improve the scenario.

The chief minister assured full security to banks in the light of the recent murder of a branch manager of Bank of Baroda in Jehanabad district. The banker was posted at the Arwal branch of Bank of Baroda.

“The director-general of police (DGP) has submitted a report on the incident. Everything is clear. A person went to jail after he was found to be involved in wrongdoings. He came out and got the branch manager killed. The person has been identified and efforts are on to arrest him,” Nitish said.

Asking the banks not to worry about security, Nitish also requested them to let the administration know whenever they are shifting big amount of cash. At the SLBC meeting, the banks had pointed out that 31 incidents of bank dacoity, loot and theft had been reported in the state since January this year.

Courtesy: The Telegraph