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The repeated reprimand by the Odisha government of the commercial banks for their low credit disbursal record in the state seems to have no effect in terms of improving their performance on this front, as evident from the latest report of the State Level Banker’s Committee (SLBC).
As many as 25 out of 30 districts in Odisha have a Credit-Deposit (CD) ratio less than the Reserve Bank of India (RBI) stipulated norm of 60 per cent as on June end, 2014. The five districts with CD ratio of more than 60 per cent are Bargarh (60.38 per cent) Khurda (62 per cent), Bhadrak (78.6 per cent), Kalahandi ( 60.57 per cent) and Dhenkanal ( 73.85 per cent).
The CD ratios of ten districts, Deogarh, Gajapati, Jagatsingpur, Kandhamal, Kendrapada, Malkangiri, Nuapada , Keonjhar Puri and Sambalpur, are below 40 per cent. Others with CD ratios a shade better include Balasore (58.48 per cent), Angul (42.60 per cent), Bolangir (43.94 per cent), Boudh (59.98 per cent), Cuttack (43.58 per cent), Deogarh (35.52 per cent), Gajapati (24.31 per cent). CD ratio in Sambalpur is abysmally low at 14.38 per cent. Banks are maintaining an overall CD ratio of 77.50 per cent as on June end.
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The banks depicted a gloomy picture if the recommendation of the Usha Thorat Committee is discounted and the CD ratio is calculated on the basis of advances sanctioned and utilised in the state. On this scale, the CD ratio figure comes to around 53 per cent with this ratio standing at 44.67 per cent for Public Sector Banks, 52.50 per cent for private commercial banks. However, the Regional Rural Banks (RRBs) with CD ratio of 61.16 have put up a better show.
State Bank of India, the country’s largest PSU bank operating with 779 branches in the state, portrayed a dismal CD ratio of 40.92 per cent while other PSU banks like Andhra Bank( 44.98 per cent), Bank of Baroda (47.32 per cent), Syndicate Bank (34.50 per cent), UCO Bank (39.21 per cent), Union Bank (50.18 per cent) also failed to attain the RBI norm.
“Between March 31 and June 30, the deposits have gone up by Rs 885 crore while the advances are down by Rs 10,000 crores. Agriculture apart, advances to other priority sectors, MSME have come down,” said U N Behera, additional chief secretary (finance) at the 136th SLBC meeting.
Behera asked the banks and their head offices to report correct data about credit and deposit ratio as those did not tally with reports of RBI. He emphasised on calculation of the ratio as per the deposit received and credit advanced and utilised within the state.
The state government, meanwhile, has threatened to ban parking of government funds in the errant banks. “A CD ratio criterion must be fixed for taking the deposits from different state government departments and PSUs. Deposits should not be given to the banks having CD ratio below 40 per cent,” said Rajesh Verma, Secretary, Agriculture department.
SLBC has asked to take steps to revise the criteria earlier fixed for taking the government deposits.
Speaking on the occasion, Finance Minister Pradip Amat expressed concern on the low CD ratio of the banks.
“While the deposits of the banks recorded a growth of 15.82 per cent during the last financial year, the credit flow showed a lower growth of 13.65 per cent. I would like to impress upon all the bankers to show positive improvement and bring the CD ratio at par with the national average,” said Amat.
