The Odisha government today asked commercial and nationalized banks to increase Credit Deposit (CD) ratio in the state and cover unbanked gram panchayats either through brick and mortar branches or banking correspondents.
"The banks need to prioritize loan advance to the agriculture and MSME sectors," Chief Secretary A P Padhi said while addressing the State Level Bankers Coordination (SLBC) meeting.
"Core of banking activity is the advance of credit.
The
credit flow to entrepreneurs is the life and blood channel
Of
the economy.
"The programmes like Start Up India, employment generation, livelihood enhancement and others remain unrealized without adequate credit flow to agriculture and MSME sectors," he said.
Stating that around 70 per cent of the credit flow to agriculture sector comes from cooperative banks, Padhi said commercial banks financed only about 30 per cent.
He urged upon the banks to improve agricultural financing at par with cooperative banks.
Emphasizing on opening of banks in unbanked GPs of the backward districts like Malkangiri, Nuapada, Nabarangpur and Kandhamal, Padhi said that the state government would bear the cost of V-Sat connectivity and provide office space at GP level to the banks that would open new branches in those areas.
Earlier, the state government had decided to undertake transaction of GP funds, state grants to GPS and subsidies to people through the bank at GP level.
Additional Chief Secretary, Finance, R Balakrishnan emphasized on formation of thematic sub-groups on various sectors for more focused growth strategies.
It was resolved at the SLBC to hold the meetings of these sub-groups more frequently to review of the progress and sort out the issues.
The total number of banks in Odisha has meanwhile increased to 4,765 by the end of December, 2015, out of which 2,604 branches are in rural areas. Around 99 new branches have been opened in the state during the period from April, 2015 to December, 2015.
However, about 75 per cent of the remote GPs in the state do not have branch of any bank. The deposit in the banks in the state has increased to Rs 2,08,753.59 crore by December, 2015 thereby showing a growth of around 9.63 per cent over last year.
On the other hand, the credit advance has come down during the period from December, 2014 to December, 2015. The Credit Deposit ratio by end of December, 2014 was around 76 per cent which came down to around 72 per cent by end of December, 2015.
Taking note of decline in the CD ratio, Padhi asked
The
banks to enhance the credit investment in the state.
However, the credit advance to priority sector including agriculture has increased to Rs 66,072 crore by December, 2015 thereby showing an increase of around 20 per cent over the last year.
