Nitish seeks effective steps from Rajan to boost bank CD ratio

Bihar Chief Minister Nitish Kumar today drew attention of Reserve Bank of India (RBI) Governor Raghuram Rajan towards low cash deposit (CD) ratio of banks in the state and sought effective steps for its improvement.
Kumar sought effective RBI initiative to improve the CD ratio during a meeting with Rajan at his residence.
The Bihar Chief Minister told the visiting RBI Governor people of the state have a habit of depositing major shares of their savings in banks due to which the cash volume of banks have increased, an official statement said here.
But the banks are not disbursing loans in this proportion, he told Rajan.

He told him that if Bihar gets special category state status, it could pave way for its development through greater investment, facilitating network of industries.
Rajan headed a sub-committee set up by Finance Minister P Chidambaram, which redefined criteria for declaration of backwardness of states. The report had put Bihar in the category of least developed states.

On basis of that report, Kumar had intensified his demand for special status. He has already announced the issue would top JD(U) agendas in the 2014 elections.
Kumar stressed on the encouragement of banks for industries based on agriculture and food processing and told Rajan that the state government has made a provision to provide 35 per cent assistance for setting industries in the state, the statement said.

Nitish Kumar informed him the state government was giving top priority to the energy sector and allocating huge resources in the field.
The RBI Governor also stressed on big investments in the energy sector to spur economic development of the state, the statement said.
The Chief Minister narrated the success story of the government's 'cycle scheme' to Rajan who evinced interest in the project and praised Kumar for "innovative" thinking resulting in qualitative improvement in primary, secondary and higher education, it said.
They also discussed on different aspects of agriculture roadmap 2012-17 formulated for Bihar to boost the farm sector and allied fields, the statement read.

Kumar requested the RBI Governor for opening brick and moller bank branches and increase in flow of educational loans in the state.
RBI regional director for Bihar and Jharkhand M K Verma and state Finance Commissioner (resources) Sanjeev Hans were present during the meeting.
The RBI Governor also attended a closed door discussion with state government officials on social and economic development in Bihar, the statement added.