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Boost Priority Sector Credit: Odisha Government to Banks

Govt asks commercial banks to cover unbanked gram panchayats

Published: 23rd February 2016 04:56 AM  |   Last Updated: 23rd February 2016 04:56 AM   |  A+A-

BHUBANESWAR: The State Government on Monday asked commercial banks to augment credit to priority sector in Odisha and cover unbanked gram panchayats (GPs) under the financial inclusion programme.

The Credit Deposit Ratio of all banks in the State decreased from 75.87 per cent of December, 2014 to 71.95 per cent during the corresponding period last year due to low growth in advance portfolio in comparison to growth in deposit.

Addressing the State Level Bankers’ Committee meeting here, Chief Secretary Aditya Prasad Padhi said the core banking activity is to advance credit. The credit flow to entrepreneurs is the lifeline of economy.

“Programmes like Start Up India, employment generation, livelihood enhancement and other economic activities remain unrealised without adequate credit flow to agriculture and Micro Small and Medium Enterprise (MSME) sectors,” Padhi said.

Even as agricultural advances by banks in the State have increased by `4441 crore from December, 2014 to December, 2015 registering 15.66 per cent growth, the Chief Secretary said the contribution of public sector and private banks is very disheartening.

home.JPGWhile cooperative banks have played a leading role by meeting about 70 per cent of the credit need of farmers, the credit lending by commercial banks is only 30 per cent. Padhi made a strong plea to banks to improve their priority sector lending particularly to farm sector. He also emphasised on financing to MSME sector which is a prime driver of economic growth.

Expressing concern over poor progress in financial inclusion plan, the Chief Secretary requested regional heads of commercial banks to achieve the target of extending banking facility to all unbanked GPs by opening brick and mortar branches or through banking correspondents (BCs).

Emphasising on opening of banks in unbanked GPs of backward districts like Malkangiri, Nuapada, Nabarangpur and Kandhamal, Padhi said the State Government will bear the entire cost of V-Sat connectivity and provide office space at GP level to banks that will open new branches.

As per SLBC data, the State has 4765 bank branches by the end of December, 2015 of which 2604 branches are in rural areas.

Around 99 new branches were opened in the State from April, 2015 to December, 2015.

Additional Chief Secretary, Finance R Balakrishnan suggested formation of thematic sub-groups on various sectors for more focused growth strategies. Sectors like agriculture, fishery, poultry, textile, MSME, handicraft, and food processing were suggested to be dealt separately through these sub-groups.

It was decided that thematic sub-groups consisting Secretary of department concerned, commercial banks interested in a particular sector and one subject matter specialist as member will hold meetings frequently to review progress of bankable projects and sort out problems, if any.



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