CM pulls up banks for poor loan sanctions

PATNA: Expressing dissatisfaction over the performance of lead and other banks in Bihar on various parameters, particularly CD ratio and loan advance targets, CM Nitish Kumar on Wednesday warned them not to route the deposits in Bihar to rich states.

Addressing the 46th quarterly State Level Bankers Committee (SLBC) meeting here, the CM said little progress has been made in issuing Kisan Credit Cards (KCCs) this year and advancing loans for education, agriculture and investment purposes.

"The CD ratio in Bihar is still a poor 40%, compared to the national average of 78%. Hard-earned money of Biharis should be used in Bihar, not in other rich states," Nitish told the bankers. The CD ratio of seven lead banks - SBI, Central Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda. Union Bank of India and UCO Bank - is nearly 35% while Federal Bank among private banks tops the chart with a ratio of 86%.

The CD ratio of all the commercial banks stands at 36.11%. Of the total deposit of Rs 14,938 crore, these banks advanced loan of Rs 5,394 crore as on September 30, 2013.

"With the help of banks, a good investment environment can be created in Bihar," the CM said while pointing out that Bihar has no big industries and very few manufacturing units have come up despite the fact that the state is a big consumer market. "If the Centre accords us special category status, then big industries will certainly come up here," he added.

Expressing concern over the small number of education loans advanced by the banks, the CM said a large number of students from the state lack financial support. If they are provided loans, they can pursue higher education better, he said. Data shows that all the banks lag far behind their targets for advancing education loans. Against the target to extend such loans to 17,278 individuals, the SBI financed only 3,410 students, while Canara Bank's achievement was 55%, highest among all the banks.

Agriculture minister Narendra Singh and industries minister Renu Kumari Kushwaha also complained about the slow progress by banks in advancing loans to farmers and distribution of KCCs. Nitish said by September last this fiscal year, the banks had achieved only 8.71% of the target of issuing new KCCs and 23.77% in renewal of old cards. Singh said against the target of Rs 1,848.59 crore, only Rs 217.69 crore had been advanced as loan to farmers.

The CM also expressed concern over the slow progress in setting up brick and mortar branches of banks in rural areas despite a directive to this effect by Union finance minister P Chidambaram at the 44th SLBC meeting at Rajgir in May last. Such units prove most effective in attracting villagers to open accounts, Nitish said, adding no gram panchayat should be left without a brick and mortar bank.

TOI, Patna

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