With the credit-deposit (CD) ratio of all banks in Odisha decreasing fast, the State Government is seriously looking for a way out to curb this disquieting situation.
In the latest Status Paper on Banking prepared by the State Government, it has came to fore that the CD ratio is as low as 38 per cent. And in rural Odisha, it is 35 per cent whereas in neighbouring rural Andhra Pradesh the ratio is 155 per cent!
Deposits of banks in Odisha have increased from `16,96,642 crore to `19,62,232 crore in the 2014-15 fiscal.
However, credit extension has decreased from `1,44,726 crore on March 31, 2014 to `1,43,614 crore as on March 31, 2015. So, more than a `1,112-crore credit decrease has been experienced.
While the rural bank deposits in Odisha are growing at an annual rate of higher than 20 per cent, the rural credit is growing barely at a rate of 7-8 per cent.
For this, the CD ratio of the banks has come down from 56 per cent to as low as 38 per cent, in the last five years. The 38-per cent CD ratio of Odisha is less than half of the all-India ratio of 77 per cent.
Odisha had a low penetration of banks and other financial institutions. Out of the State’s 6,238 gram panchayats, as many as nearly 4,500 GPs do not have banks.
The total geographical area of the State is 1,55,000 square km. The average size of the GPs is 25 sqkm. So, one has to travel more than five km to reach a bank in rural areas, said a Government official.
Of course, technology solutions are available to do banking s itting at home. But that is more for urban customers. Internet facilities are hardly available in villages, said the officer.
In a rural area, a bank branch is the only solution. The State Government tried to experiment with Banking Correspondents. But the experience has not been very successful. So, the State will have to have a branch of a commercial bank in each GP for institutional credit to reach rural households.
The State Government has written to the Union Ministry of Finance to impress upon the bank authorities to accelerate setting up of bank branches. As on December 31, 2014, the total number of bank branches in Odisha was 4,672. During 2014-15, a total of 372 bank branches were opened, which is not very encouraging, said the officer.