The Odisha Government on Monday asked all commercial banks, including nationalised ones, to boost the credit-deposit (CD) ratio in the State, cover the unbanked gram panchayats (GPs) either through brick and mortar branches or through Banking Correspondents and prioritise advance of loan to the agriculture and MSME sectors.
Chief Secretary Aditya Prasad Padhi said all this while addressing the keynote session of a State-level Bankers’ Coordination (SlBC) meeting here. He said, “The core of banking activity is the advance of credit. The credit flow to entrepreneurs is the life and blood channel of the economy. The programmes like Start-Up India, employment generation, livelihood enhancement, etc., remain unrealised without adequate credit flow to the agriculture and MSME sectors.”
He pointed out that around 70 per cent of the credit flow to agriculture is from cooperative banks while commercial banks only finance about 30 per cent. He urged the banks to improve agricultural financing at par with cooperative banks.
Emphasising the need of opening of banks in unbanked GPs of the backward districts like Malkangiri, Nuapada, Nabarangpur and Kandhamal, Padhi said the Government would bear the cost of V-Sat connectivity and provide office space in the GPs to the banks for opening new branches in these areas.
Earlier, the Government had also decided transact all GP funds, Government grants to GPS and subsidies to people, etc., through banks at the GP level.
Additional Chief Secretary, Finance R Balakrishnan emphasised on formation of thematic sub-groups on various sectors for more focused growth strategies. The sectors like agriculture, fishery, poultry, textile, MS&ME, handicraft ad food processing were suggested to be dealt separately through these sub-groups.
It was decided to hold the meetings of the sub-groups more frequently to review of the progress and sort out the issues.
Data show that the total number of bank branches in Odisha has increased to 4,765 by the end of December 2015, out of which 2,604 are in rural areas. Around 99 new branches have been opened during the period from April to December 2015.
Till now, about 75 per cent of the remote GPs do not have branch of any bank. The deposit in the banks in the State has increased to Rs2,08,753.59 crore by December 2015, thereby showing a growth of around 9.63 per cent over last year for the same period.
On the other hand, the credit advance has come down during the period from December 2014 to December 2015. The credit-deposit ratio by end of December 2014 was around 76 per cent which came down to around 72 per cent by end of December 2015.
The Chief Secretary and the Development Commissioner expressed concern over this and urged upon the banks to enhance the credit investment in the State.
Of course, the credit advance to priority sectors including agriculture has increased to Rs 66,072 crore by December 2015, thereby showing an increase of around 20 per cent over the last year.
SlBC Chairman Sricharan Singh, ED of UCO Bank, RBI Regional Director PK. Jena, SBI GM A Choudhury and NABARD CGM SK Kale attended the meeting.