BHUBANESWAR: Odisha government on Monday asked the commercial and nationalised banks to ensure credit flow to agriculture and MSME sector and open branches in all Gram Panchayats in the state.
It asked the banks to boost up credit-deposit (CD) ratio and cover unbanked GPs either through brick and mortar branches or banking correspondents.
Addressing the state level bankers’ coordination meeting here, Chief Secretary Aditya Prasad Padhi said the commercial banks’ credit flow to agriculture is only 30% against 70% for cooperative banks.
He urged upon the banks to improve agricultural financing at par with cooperative banks.
“The credit flow to entrepreneurs is the life and blood channel of the economy. The programmes like start up India, employment generation, livelihood enhancement, etc. remain unrealized without adequate credit flow to agriculture and MS ME sectors”, said Padhi.
Emphasising on the opening of banks in unbanked GPs of the backwards districts like Malkangiri, Nuapada, Nabarangpur and Kandhamal, Padhi said that government would bear the cost of V-Sat connectivity and provide office space at GP level to the banks that would open new branches in those areas.
In the first phase, the State government will fund the opening of 60 bank branches in Kandhamal, Malkangiri, Nabarangpur and Nuapara districts, the chief secretary informed.
Earlier, the state government had also decided to transact all GP funds, government grants to GPS and subsidies to people, etc. through the bank at GP level.
Additional chief secretary (Finance) R. Balakrishnan emphasised on the formation of thematic sub-groups on various sectors for more focused growth strategies.
Available data show that a total number of banks in Odisha has increased to 4765 by the end of December 2015 out of which 2604 branches are in rural areas. Around 99 new branches have been opened in the state during the period from April 2015 to December 2015. Till now near about 75% of the remote GPs do not have a branch of any bank.
The deposit in the banks in the state has increased to 208753.59 crores by December 2015 thereby showing a growth of around 9.63% over last year for the same period. On the other hand, the credit advance has come down during the period from December 2014 to December 2015.
The Credit Deposit ratio by the end of December 2014 was around 76% which came down to around 72% by the end of December 2015.
The credit advance to priority sectors including agriculture has increased to Rs 66072 crore by December 2015 thereby showing an increase of around 20% over the last year.