Letter to BS: Credit-deposit ratio dropped in 17 states during 2014-17

This is with reference to “Credit-deposit ratio dropped in 17 states during 2014-17” (May 14). To remove this anomaly, states should impose compensatory cess or tax on banks for the difference amount between national average and state average of the CD ratio. This will have three benefits. Banks will start extending more loans to such states. Poor states will get more revenue through cess for infrastructure development. And like retail loans, these loans, not given to business sharks, will have less wilful defaulters.

Sudhir Kumar Sinha   Ahmedabad

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