For allocating “lucrative” Government businesses, achieving national credit targets and participation in Government sponsored schemes by banks will be the key criteria to be considered by the State Governments of Punjab and Haryana.
Punjab Government has decided to rank banks for allocating Government business while keeping in mind their performance in respect of national goals set by the reserve Bank of India. “Banks will be ranked according to their performance or achievement of national goals towards credit targets achieved in the states in order to give state government business,” an official of Department of Institutional Finance and Banking, Punjab, said.
The State Government will consider achievement of national goals towards lending to priority sector, agriculture, weaker section, Credit Deposit ratio and women beneficiaries by any bank, the official added. As per RBI guidelines, banks are required to achieve national goals on the basis of net bank credit. “All the State Government departments, boards, corporations have been asked to give preference to ranked banks according to their ranking for Government business and placement of deposits,” he said.
Official further said the ranking of banks would be reviewed every six months. Banks vie hard among themselves for acquiring sizeable government business including heavy deposits, advances, departmental payments, salaries, etc. As on September 2013, banks in Punjab have achieved priority sector advance to net bank credit target at 50.31 per cent against national goal of 40 per cent, agriculture advance at 24.76 per cent against goal of 18 per cent, CD ratio of 64.69 per cent against 60 per cent goal.