The Odisha government has pulled up commercial banks for not doing enough to install brick-and-mortar branches in unbanked regions of the state. Odisha still lacks bank branches especially in aspirational districts and the ones affected by Left Wing Extremism (LWE).
“The state government is attaching huge importance on DBT (Direct Benefit Transfer). But the success of DBT hinges on the presence of bank branches in rural areas untouched by banking services. Unless financial inclusion is strengthened with brick and mortar branches, the DBT model cannot succeed,” Niranjan Pujari, Odisha’s minister for finance & excise said at the 157th meeting of the State Level Bankers’ Committee (SLBC).
The minister said the state government has 194 schemes for social protection and the process of financial inclusion will be in jeopardy if establishment of bank branches is not taken up in remote areas.
As per the data collated by SLBC, Odisha has 5,395 brick and mortar branches (as on September 30, 2019). However, 4,921 branches need to be opened in the remote, unbanked areas, the minister stressed.
Pujari also expressed his anguish over the underwhelming performance of Banking Correspondents (BCs) in their allocated gram panchayats though he admitted the constraints of online connectivity in some LWE districts.
Review of the SLBC data illustrates the banks have under-performed the credit offtake targets envisaged in the Annual Credit Plan (ACP) for 2019-20.
“In agriculture credit disbursement, the performance of banks has been very poor. Only 38.13 per cent of the target is achieved. Lending has been poor too in the allied sectors. In term loans, the achievement is only 36 per cent of the target though MSME (micro, small & medium enterprises) lending has touched a high of 94.14 per cent”, the minister said.
Speaking on the occasion, Debashish Panda, special secretary, Department of Financial Services said, “Banks are flush with funds. There is hardly any problem of liquidity. And, BC has proved to be a very effective model. People of the community in aspirational and LWE districts have been engaged as BCs.”
Sujata Karthikeyan Pandian, commissioner & director of Mission Shakti stressed on the need to scale up loans to women Self Help Groups (SHGs).
“Our average loan size is only Rs 1.1 lakh and this is quite low compared to other states. We need to ramp it up to at least Rs four lakh. Moreover, our interest subvention level needs to go up to Rs 600-700 crore. Women led SHGs in Odisha are involved in a lot of activities- paddy procurement, electrical meter reading, hospital diet management and take home ration,” she said.