Reserve Bank of India governor C Rangarajan yesterday assured that steps will be initiated to accelerate fund flow to the Bihar trade, agriculture and industrial sectors.
Expressing his displeasure over the poor credit-deposit ratio, Rangarajan assured the Bihar Chambers of Commerce members that the apex bank will not hesitate from intervening in matters pertaining to the banks failure in providing the necessary funds to the deserving entrepreneurs.
Rangarajan told the members that RBI was keen to improve the credit outflow and said we are thinking about developing a mechanism in consultation with the chamber and the Industries Association to take stock of the disputes progress made with regard to credit flow in the state.
More From This Section
Talking about the fake currency notes circulating in the market, Rangarajan said necessary steps will be taken by the RBI to tackle this menace. He said the people will be educated about the growing menace (circulation of fake currency in the market) through the print and electronic media.
The Bihar chamber yesterday submitted an 18 point charter of demands to the RBI governor. It sought reconstitution of a task force constituted by RBI to augment the CD ratio in the state, for sanctioning the need-based working capital, implementation of the Nayak committee report, removal of regional imbalance, uniformity in the rates of interest for the borrowers, creation of a venture capital fund with 10 per cent of the total deposits for Bihar, implementation of the state credit plan, doing away with the system of collateral security for small enterprises, disposal of loan application within a time frame, constitution of a working group to monitor the bankers as well as the problems of the borrowers and at the same time to educate the masses to differentiate between the genuine and the counterfeit currency notes.
The memorandum was submitted to the RBI governor, by the vice president and chairman, banking and programme implementation sub-committee, Harihar Nath.
The chambers memorandum held commercial banks responsible for the low CD ratio. The CD ratio is abnormally low ranging between 20 to 30 per cent against the national average of 60 per cent, the memorandum said.
The memorandum said funds mobilised from Bihar were being diverted to the industrially advanced states.
The memorandum further said the task force created by RBI to suggest ways to improve the CD ratio in Bihar did not take into confidence the representatives of the industries association and the BCC and hence the CD ratio continued to decline. The chamber has demanded reconstitution of the task force to arrest the declining trend. The chambers memorandum held the non-cooperative attitude of the commercial banks responsible for the industrial sickness in the state that was endowed with vast mineral resources.
The chambers complaint about the non-performance of the commercial banks was seconded by the state level financing institutions like the Bihar State Financial Corporation and the Bihar State Credit and Investment Corporation (BICICO).
The chamber also asked the RBI governor to issue necessary directives to the commercial banks so that clearing houses functioned twice a day. The BCC asked the RBI governor to tell the bankers not to ask for collateral security for the SSI units and from the small time traders.
BCC president Jugeshwar Pandey told the governor that a positive attitude from the bankers could help Bihar emerge as a front ranking state in the field of agriculture, industry, trade and commerce. The BCC suggested that a small working group with representatives of banks and the chamber should be introduced to monitor the bankers as well as the borrowers problem and their solution in the interest of the states economic development.
Pandey asked the governor to adopt special norms for Bihar to tackle credit availability for the industrial, commercial and agricultural sectors.