Commercial banks operating in Odisha have found the going tough for doing business with state PSUs.
With the state finance department setting stringent parameters for such banks to make them eligible for business transactions, most banks have failed to make the grade.
Only 10 banks- seven public sector banks and three of their private sector counterparts are found to be fit to do business with the state PSUs and state level autonomous societies (SLAS) in 2012-13. These banks have been rendered eligible after meeting three criteria- maintaining CD (credit deposit) ratio of 60 and beyond, achieving priority sector advances of at least 40 per cent and meeting a minimum of 80 per cent of the annual credit plan (ACP) target for 2011-12.Among the PSU banks- Andhra Bank, Canara Bank, Corporation Bank, IDBI Bank, Punjab National Bank, State Bank of India and UCO Bank have been found to be suitable bankers. Similarly, three private sector lenders- HDFC Bank, ICICI Bank and Axis Bank have qualified for doing business with the state PSUs.
J K Mohapatra, principal secretary (finance) has urged secretaries of all departments to issue instructions under their administrative control to select these 10 banks for handling their deposits and business.
"The criteria devised for determining the eligibility of banks for this fiscal will also remain the same for 2013-14. Banks who fail to meet the laid down parameters on CD ratio, priority sector lending and ACP target fulfillment will be automatically disqualified”, said Mohapatra.If any SPSU, SLAS, urban local body or development authority has currently given its business to any ineligible bank, it should switch over to an eligible bank. Fixed deposits made in any ineligible bank should be withdrawn on maturity and parked in an eligible bank, the guidelines suggest.
Among the selected PSU banks, Andhra Bank had maintained CD ratio of 65.82 (as on March 31, 2012), had 54.35 per cent of priority sector advances and achieved 80 per cent of ACP target during 2011-12. Corporation Bank with a CD ratio of 61.55, boasts of private sector advances of 120.64 per cent and achieved 181 per cent of ACP for the last fiscal.
Going by the performance of the three private banks who met the eligibility criteria, Axis Bank fared the best with a CD ratio of 74, priority sector advances of 116.72 per cent and achieving 155 per cent of the ACP for 2011-12.