While the Covid-19 situation is posing a serious economic stress in the State, the reluctance of the banks to provide the much-needed credit support to the people engaged in industry, trade and business has come as a double whammy.
Though the Reserve Bank of India is harping on extension of more credit facilities for the people, the banks are extending less credit facilities, for which the credit-deposit ratio (CDR) is on a sharp decline in the State.
For example, on December 31, 2020, the CDR was 59.89per cent , which has gone down to 56.45per cent by March 31, 2021. Although a benchmark of 60per cent CDR is to be maintained, the banks are not adhering to it. In the result, the banks are taking away more money from the State as deposits while credit is falling adversely. A comparison of deposit and credit between December 32, 2020 and March 31, 2021 reveals that the banks mobilised nearly `21,000 crore of deposit during the first three months this year while they sanctioned hardly `10, 000 crore during this period. And all the sanctioned amounts have not yet been disbursed by the banks, official sources said.
On December 31, 2020, the total deposit with the banks in the State was `3,59,806.40 crore while it went up to Rs 3,80,799.48 crore by March 31, 2021. But the total advance sanctioned and utilised was ` 1,94,745.21 crore by December 31, 2020 and it was `2,04,932.27 crore by March 31, 2021.
The CDR of the banks’ rural branches is 68.27per cent and the CDR in semi-urban branches is 44.06per cent and it is 51.21per cent in urban branches. The issues were discussed at the latest State Level Bankers’ Coordination Committee (SLBC) meeting held here recently. The CDR comparison of Fiscals 2019-20 and 2020-21 reveals that on March 31, 2020 it was 60.41per cent and has further gone down to 56.45per cent. In 2020-21, the total deposit rose by `31,823.56 crore but total advance increased only by `4,12.25 crore.
The Reserve Bank of India (RBI) had conducted a survey regarding the low CDR in nine districts in Odisha being below 40per cent. The CDR was recomputed by taking data from banks which had sanctioned advance outside the State but had shown as utilised within the State.
As per the re-computation, two districts, Angul and Sambalpur, now have the CDR above 40per cent and six districts, Deogarh, Jagatsinghpur, Keonjhar, Malkangiri, Mayurbhanj and Puri, close to 38per cent to 40per cent .Experts feel the State Government should now take a serious note of the CDR issue as due to the pandemic, the State’s economic situation has worsened and funds flow from banks is needed more.