Odisha govt notifies terms for doing business with banks

State has finalised 15-point eligibility criteria for banks to handle the operations of state PSUs

The Odisha government has finalised 15-point eligibility criteria for banks operating in the state to handle the business and deposits of state public sector undertakings (PSUs) and state level autonomous societies (SLAS). The banks will be selected to do the business for 2017-18.

For the selection of banks, the state government in consultation with the State Level Bankers' Committee (SLBC) has finalised 15 parameters to appraise the performance of the banks. As of now, 15 banks are authorised to transact the business of the PSUs and SLAs. In the list of eligible banks are 11 public sector lenders, two regional rural banks (RRBs), one private sector bank and the Odisha State Cooperative Bank.

For empanelment, the minimum eligibility score is 60 out of 100. A bonus of five marks is given to banks sponsoring and managing RSETI (Rural Self Employment Training Institute) and RRBs.

The parameters include — CD (credit deposit) ratio for loans sanctioned and disbursed within the state, achievement of annual credit plan target meant for the priority sectors, agriculture advance, agri-term loan, branch networks, an opening of branches in the unbanked gram panchayats, percentage of branches having ATM (onsite and offsite). The percentage of target achievements of Joint Liability Group (JLG) linkage, Self Help Group linkages and MUDRA loans disbursement is also delineated as the key criteria.

“The state government has requested the SLBC to furnish the scores of all the banks in the state on the basis of their performance from April 1, 2016 to March 31, 2017 for the empanelment of banks for the next financial year,” said a bank official.

The banks in the state are often chastised for low advances in comparison to growth in the deposits in the state.

Similarly, banks are also giving a short shrift to opening of banks in the unbanked gram panchayats despite lucrative incentives from the state government.

It may be noted that 70% of Odisha's gram panchayats are bereft of a bank branch. The state has 6,238 gram panchayats and about 4,400 of them do not have a bank branch. Around 16 million people or nearly 40% of the rural population in the state do not have access to proper banking facilities.

The state government has also come out with a scheme of extending financial support for three-phase power supply to tempt commercial banks to open new branches in the unbanked gram panchayats for which a sum of Rs 2.5 crore has been allocated in the state budget for 2016-17.