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Dismal performance by banks in priority sector

By Correspondent
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GOALPARA, Nov 30 - Inspite of having immense potential in agriculture, the flow of institutional credit to this sector in Goalpara district remains quite dismal, as is evident from the average Credit Deposit (CD) ratio of 35% as at the end of March, 2015 which is very low by all means in comparison to the stipulated RBI norms of 60%.

While official figures show disbursement of Rs 2,744.00 lakh to 4,843 beneficiaries under the Kisan Credit Card (KCC) category, with a moderate 35% physical and 39 % financial target achievement respectively across the district, the AGV bank branches at Matia, Rangjuli and Dhupdhara have registered a whopping 712%, 176 % and 102% achievement of financial targets respectively, portraying the inconsistencies prevailing among various banks in maintaining the requisite CD ratio. It may be mentioned that the Oriental and the private banks like AXIS, HDFC and ICICI have shown no loan disbursement, though they were assigned physical targets of 250 beneficiaries each.

Earlier talking to this correspondent, the Deputy Commissioner JVN Subramanyam, while being aware of the adverse CD ratio, said that he has already initiated certain measures like appointing subcommittees with the ADC (Dev) as the chairman and LDM, UCO Bank as member secretary of various Government line departments to facilitate credit flow. He said that he is also taking up with the banks to initiate various procedural changes at the district-level bankers meetings for an overall improvement in the CD ratio. He also informed that emphasis has been placed on loan recovery through Bakijai and NABARD has been asked to conduct financial literacy camps to educate people on management of money and on various facilities extended by banks.

The LDM, UCO Bank J Ali Sikdar told this correspondent that new initiatives have already been taken to improve the flow of credit to the priority sector, as per instructions as discussed in the recent DCC /DLRC meetings. He also said that the CD ratio has marginally improved from 35% to 40% as at the end of September, 2015.

On the other hand, serious reservations are being expressed in concerned circles on the health of the local economy and especially on the marginal flow of bank credit to the priority sector, apart from agriculture, despite bank deposits having registered substantial growth in the last few years.

Those seeking improvements in the credit flow opine that the district administration must come forward and take stern action against these errant banks and stop keeping deposits of different government departments in it.

The banks should instead of concentrating on settlements of bad or old debts under Bakijai scheme, should shift their focus to improvement of the CD ratio, they said and suggested that other bank instruments like business correspondents, linking SHGs and farmers� clubs should be activated, to increase the much-needed credit flow to the rural economy.

An official of the Agriculture Department said that the practice of preparing potential linked credit plan (PLP) by the NABARD every year remains only on paper, as the potential targets earmarked for improvement in the rural economy, have never been achieved. The official also said that one must search for the root causes as to why the financial targets are never surpassed.

It may be mentioned here that the targets earmarked in various sub sectors under PLP 2015-16 are Rs 8517.00 lakh under crop production, maintenance and marketing (crop loan), Rs 7557.70 lakh under term investment for agriculture and allied activities (Agric. term loan) and Rs 2487.25 lakh in the MSME sector.

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Dismal performance by banks in priority sector

GOALPARA, Nov 30 - Inspite of having immense potential in agriculture, the flow of institutional credit to this sector in Goalpara district remains quite dismal, as is evident from the average Credit Deposit (CD) ratio of 35% as at the end of March, 2015 which is very low by all means in comparison to the stipulated RBI norms of 60%.

While official figures show disbursement of Rs 2,744.00 lakh to 4,843 beneficiaries under the Kisan Credit Card (KCC) category, with a moderate 35% physical and 39 % financial target achievement respectively across the district, the AGV bank branches at Matia, Rangjuli and Dhupdhara have registered a whopping 712%, 176 % and 102% achievement of financial targets respectively, portraying the inconsistencies prevailing among various banks in maintaining the requisite CD ratio. It may be mentioned that the Oriental and the private banks like AXIS, HDFC and ICICI have shown no loan disbursement, though they were assigned physical targets of 250 beneficiaries each.

Earlier talking to this correspondent, the Deputy Commissioner JVN Subramanyam, while being aware of the adverse CD ratio, said that he has already initiated certain measures like appointing subcommittees with the ADC (Dev) as the chairman and LDM, UCO Bank as member secretary of various Government line departments to facilitate credit flow. He said that he is also taking up with the banks to initiate various procedural changes at the district-level bankers meetings for an overall improvement in the CD ratio. He also informed that emphasis has been placed on loan recovery through Bakijai and NABARD has been asked to conduct financial literacy camps to educate people on management of money and on various facilities extended by banks.

The LDM, UCO Bank J Ali Sikdar told this correspondent that new initiatives have already been taken to improve the flow of credit to the priority sector, as per instructions as discussed in the recent DCC /DLRC meetings. He also said that the CD ratio has marginally improved from 35% to 40% as at the end of September, 2015.

On the other hand, serious reservations are being expressed in concerned circles on the health of the local economy and especially on the marginal flow of bank credit to the priority sector, apart from agriculture, despite bank deposits having registered substantial growth in the last few years.

Those seeking improvements in the credit flow opine that the district administration must come forward and take stern action against these errant banks and stop keeping deposits of different government departments in it.

The banks should instead of concentrating on settlements of bad or old debts under Bakijai scheme, should shift their focus to improvement of the CD ratio, they said and suggested that other bank instruments like business correspondents, linking SHGs and farmers� clubs should be activated, to increase the much-needed credit flow to the rural economy.

An official of the Agriculture Department said that the practice of preparing potential linked credit plan (PLP) by the NABARD every year remains only on paper, as the potential targets earmarked for improvement in the rural economy, have never been achieved. The official also said that one must search for the root causes as to why the financial targets are never surpassed.

It may be mentioned here that the targets earmarked in various sub sectors under PLP 2015-16 are Rs 8517.00 lakh under crop production, maintenance and marketing (crop loan), Rs 7557.70 lakh under term investment for agriculture and allied activities (Agric. term loan) and Rs 2487.25 lakh in the MSME sector.

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