Punjab's rural sector has 'lowest' CD ratio: Report

With overall credit deposit (CD) ratio of banks in Punjab dropping for the period ending June 2014, the rural sector in the state has recorded the "lowest" ratio in comparison to that of in urban and semi-urban sectors.
Bank's CD ratio in Punjab's rural sector plummeted to 60.76 per cent as on June 2014 from 63.21 per cent in corresponding period of last year, as per latest report of State Level Bankers' Committee (Punjab) report.
CD ratio denotes how much a bank lends out of the deposits it has mobilized. The low ratio indicates banks are not making full use of their resources for banking activity.

Notably, Punjab government had already expressed concern over the low deposit ration in rural sector as compared to overall CD ratio. The state government had even called up the banks to raise the ratio.
Punjab's overall CD ratio has also dropped by 2.20 per cent to 77.70 per cent as on June 2014, as per SLBC report.
However, CD ratio in semi urban and urban areas stood at 64.66 per cent and 94.83 per cent. The ratio, which is a key parameter to assess bank's fiscal health, declined in semi-urban and urban areas by 1.47 per cent and 7.61 per cent respectively.

Among four districts, CD ratio (including NRI deposits) in Jalandhar and Hoshiarpur declined by 0.66 per cent and 0.61 per cent to 32 and 30.43 per cent respectively. Kapurthala and Nawanshahr's CD ratio was 34.29 and 36.40 per cent.

The CD ratio of Jalandhar, Hoshiarpur, Kapurthala and Nawanshahr districts have been monitored since 2006 as per recommendations of expert group by Government of India under the Chairmanship of YPS Thorat, as these districts had below 40 per cent CD ratio in year 2005.
A monitorable action plan was drawn up for these four districts in order to raise their CD ratio to targeted level of 60 per cent by March 2015.

Among district wise CD ratio, Fazilka has maximum CD ratio of 147.53 per cent, followed by Mansa at 126.28 per cent, Ferozepur at 124.70 per cent and Muktsar at 124.42 per cent, as per report.
Average CD ratio of public sector banks in Punjab was worked out at 76.89 per cent while private banks had 83.13 per cent.