Low credit offtake in Punjab irks RBI

The Reserve Bank of India has expressed concern at the low credit-deposit (CD) ratio of commercial banks in Punjab, especially in rural and semi-urban areas. Although the overall CD ratio of commercial banks in Punjab stood at 69.4 per cent during the period July 2007-June 2008, against the statuary requirement of 60 per cent, the CD ratio of commercial banks in rural and semi-urban areas is 50.79 per cent and 46.72 per cent, respectively. In urban areas the ratio is 96.15 per cent.

Although during the period the CD ratio of commercial banks in urban areas increased by 3.97 percentage points against the corresponding period last year, in rural areas it witnessed a decline of 3.83 percentage points as compared to the corresponding period last year.

The CD ratio in the districts of Jalandhar, Kapurthala, Nawashahr and Hoshiarpur has been less than 40 per cent during the period (July 07-June 08). However, the ratio of these districts has improved over the same period.

At the State-Level Bankers Committee (Punjab), held today in Chandigarh, it was decided that consistent efforts by all concerned were needed to reach closer to the next CD ratio target in these districts.

Further, the Lead District Managers of these districts have been advised by the conveyer bank (Punjab National Bank) to converge meetings of special sub-committees (SSCs) of the District Level Coordination Committee at least once in a quarter. It will help in keeping track of the CD ratio of banks in the district.