Adityanath hints at low credit formation, asks banks to improve CD ratio

UP's CD ratio stands at 57% compared to a national average of 78%

Uttar Pradesh chief minister Adityanath has asked commercial banks to improve the credit deposit (CD) ratio in the state to match the national average.

As compared to the national CD ratio of 78%, the corresponding figure for UP stands at a much lower level of 57%. This indicates lower credit formation in the state and flight of capital/savings to other states.

Adityanath exhorted banks to not only increase the number of branches, especially in rural areas of the state, but also holding credit camps to improve the low CD ratio in the country’s most populous state.

He underlined that branches should be opened in every village having a population of more than 5,000, apart from other remote areas. The CM, while chairing the state level bankers’ committee (SLBC) meeting here recently, also advised commercial banks to offer priority lending to farmers for procuring farm implements.

Stressing the importance of investors and bankers in positioning UP as the country’s ‘growth engine’, he noted the state was ready to play an important role in making India a $5 trillion economy by 2024.

Nudging bankers to contribute towards the objective of UP touching a $ 1 trillion economy mark in the next 5 years, the CM said the state was targetting an annual growth rate of 10% through meticulous planning and harnessing of all available resources.

Meanwhile, Adityanath instructed banks to fulfill their mandate of distributing 2.5 million Kisan Credit Cards in the state.

He also underscored the vitality of the micro, small and medium enterprises (MSME) sector in augmenting industrial growth and generating jobs in the state. Recalling the flagship One District, One Product (ODOP) scheme run by the state government to revitalise MSMEs and traditional industries, he urged bankers to provide greater momentum in extending credit facilities to the MSME sector and unlocking their potential.

Meanwhile, the CM thanked Bank of Baroda (BoB) for providing Rs 1,500 crore loan for the proposed Bundelkhand Expressway and said lending for infrastructure development was the key for composite growth.

Adityanath said the state government was zealously working towards ramping up mega infrastructure in UP, including Purvanchal Expressway, Bundelkhand Expressway, Ganga Expressway, Jewar International Airport, Defence Corridor, apart from inland waterways, power projects etc. He nudged banks to come forward to bankroll such projects and partner in the UP growth story.

Meanwhile, he claimed his government, over the past two years, had improved the industrial climate by bettering law and order, apart from creating a conducive ‘ease of doing business’ environment. He also referred to the successful hosting of UP Investors Summit 2018 and the Kumbh Mela 2019 to buttress his claims. He said the state was poised to become the industrial backbone of India even as he pointed to transparency in governance.