Lend more, expand service: Odisha government tells banks

The Odisha government on Monday asked banks to increase their credit deposit (CD) ratio and open branches in all Gram Panchayats (village councils) in the state.

The villages without banks should be covered either by bank branches or by RBI-mandated "business correspondents" and lending to agriculture and small businesses should be prioritised, Chief Secretary Aditya Prasad Padhi said while addressing the state level bankers' coordination meeting here.

Credit deposit (CD) ratio is an indication of how much a bank is lending out of the deposits it has collected. A higher CD ratio indicates greater lending out of deposited funds.

"We are concentrating on sectors like agriculture, Micro, Small and Medium Enterprises (MSME), fisheries and animal husbandry, so that credit flow to these areas could be improved," Padhi said.

The government also sought to provide banking facilities in 75 percent of Gram Panchayats that currently lack them, he said.

"Core of banking is advance of credit. Credit flow to entrepreneurs is the lifeblood of the economy. The programmes like Start Up India, employment generation, livelihood enhancement, etc., remain unrealized without adequate credit to agriculture and MSME sectors," the chief secretary said.

Commercial banks currently account for only 30 percent of the lending to the farm sector which has been primarily served by the cooperative banks, he said.

He urged the commercial banks to catch up with cooperative banks.

The government would fund telecom connectivity and provision of office space for banks that would open new branches in unbanked Gram Panchayats of Malkangiri, Nuapada, Nabarangpur and Kandhamal and other backward districts, Padhi said.

Available data shows that the total number of bank branches in Odisha went up to 4765 by the end of December 2015, out of which 2604 branches are in rural areas.

Ninety nine new branches have been opened in the state from April 2015 to December 2015.

The bank deposits in Odisha stood at Rs.2,08,753.59 crore by December 2015, a growth of 9.63 percent over the previous year, said an official statement.

On the other hand, bank loans had come down during the same period. The Credit Deposit ratio declined from 76 percent by the end of December 2014 to 72 percent by the end of December 2015, said the statement.

However, lending to "priority" sectors including agriculture, increased to Rs.66,072 crore by December 2015, a growth of about 20 percent over the previous year.