Wednesday, April 05, 2006

FM to meet Bihar bankers in April

Bihar government will convene a state-level bankers meet, to be addressed by union finance minister P Chidambaram, next month to discuss necessary initiatives required for improving the credit-deposit (CD) ratio and lending by banks to the agricultural sector of the state.

Chidambaram has agreed to address the meet after the Budget session of parliament and the date for the meet will be finalised later, deputy chief minister Sushil Kumar Modi said.

He said chief secretary G S Kang was scheduled to visit Mumbai later this month to meet the governor of the Reserve Bank of India to discuss with him ways to improve the CD ratio in the state from the existing 31 per cent to 40 per cent.

Kang would request the governor to ensure enhanced lending by banks, particularly to the agriculture and small scale industries sectors.

The state government has decided to give stamp duty exemption on agricultural loans up to Rs 3 lakh and simplify the process of issuing land possession certificate besides amending several laws to create an atmosphere conducive for improving the CD ratio, he said.

Modi, who also holds the finance portfolio, said the government has raised the exemption limit for agricultural loan to Rs 3 lakh. Earlier stamp duty was levied on agricultural loans above Rs 15,000.

?It is a matter of great concern that the CD ratio of Bihar is just 31 per cent against the national average of 57 per cent,? Modi said, adding the bankers had been asked to achieve at least 40 per cent CD ratio.

Modi said against a deposit of Rs 41,982 crore in the first six months of the current fiscal, the credit flow was a meagre Rs 12,925 crore and held the commercial, rural and cooperative banks responsible for it.

He said the share of banks in the state?s annual credit plan in the small-scale industry sector was below 5 per cent and they have been asked to pay special attention to SSI financing, a core sector for enhancing the CD ratio.

Against a target of Rs 570.92 crore set for SSIs during 2005-06 the achievement was just Rs 158 crore till december 2005, he said.

Banks have been asked to pay special attention to the implementation of the prime minister?s Rojgar Yojana Scheme and assist self-help groups (shgs) seeking loans to start a venture.

Modi said against the over one lakh SHGs functioning in Andhra Pradesh, only 12,000 were registered in Bihar and that banks were reluctant to open their accounts.

Loan up to Rs 10,000 crore would be disbursed with the help of Nabard in the next financial year and a number of measures had been taken to check the flow of capital from the state.

He said of Rs 10,000 crore, Rs 7000 crore has been earmarked for priority sectors like agriculture and SSI and the remaining Rs 3000 crore for the non-priority sector.

Under the priority sector loan of Rs 4,670 crore would be distributed for agricultural sector and Rs 865 crore for setting up industrial units.

Banks have been instructed to issue kisan credit cards, artisan credit cards and self employment credit cards to weavers as the performance of the banks on this front was dismal.
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