Bankers’ panel out to increase Credit Deposit Ratio in 7 districts

Apart from these three districts,the ratio in Dangs,Kheda,Kutch and Panchmahals has remained below 40 per cent,whereas the ideal CD ratio has to be 60 per cent.

Mukesh Kumar Jain,SLBC convenor and general manager of Dena Bank,noted in a recent meeting of bankers that there was no perceptible improvement in the ratio of these districts.

This was despite the setting up of a special sub-committee of the district level credit committees to monitor CD ratios in the districts having the ratio below 40 per cent.

This committee was set up in 2005 under instructions from the Reserve Bank of India to monitor the CD ratio and draw up a monitorable action plan to increase it.

“It is really a challenge for the seven districts to come above 40 per cent,” Jain said at the meeting.

Various reasons were put forward for the abysmally low CD ratio in these seven districts,such as the high level of NRI deposits in Porbandar,Kutch,Anand,Kheda and Navsari districts.

Backward hilly areas and dry land (like in Dangs),lower credit demand,absence of large and heavy industries,and a disappearing trend of financing by district central cooperative banks were also cited as reasons.

One major reason cited was that the deposits and advances in the urban cooperative banks are not being considered while arriving at the CD ratio.

It was suggested that credit monitoring should be taken up to the branch level in these districts.

Also,a representative of SLBC should attend DLCC meetings where items on the agenda would include service area credit plan and CD ratio.

Most importantly,the banks were told to ensure that in no case the CD ratio in these district should be allowed to slip any further under any circumstances.