The Odisha government expressed serious concern over the poor lending by the state’s commercial banks and called on them to take corrective action, as the focus is on providing more credit to the people. for commerce and business.

Senior Finance Secretary Ashok Kumar Meena stressed at a recent meeting of the State Level Bankers Committee (SLBC) that compared to the annual credit plan (ACP) target of Rs 90,395 , 69 crore for 2020-21, the achievement until December 31, 2020 was only Rs. 52,109.89 crore, or 57.65% of the annual target.

The achievement of banks under the total agricultural sector until December 31, 2020 was Rs 25,004.92 crore against the target of Rs 43,282.11 crore, or 57.77% of the annual target. Meena had to point out that banks do not provide credit in the fisheries and agenda sectors, even though there is huge potential in both sectors. Achievement in ACP up to 31 December 2020 in fisheries and dairy was only 13.91% and 16.17%, respectively, while achievement in MSME sector up to this period was 76.85% of the annual target of Rs 43,282.11 crore. Achievement in khadi and village industries was 34.33% and in medium enterprises 55.85% which require special attention.

Meena also said the average loan size for the Self Help Group (SHG) needs to be increased. He pointed out that the main RBI circular of September 18, 2020 imposes a minimum of Rs 6 lakh based on the MCP of SHG on the third link.

Banks were urged to comply with the standards prescribed by the RBI and the SLBC Rural Credit Subcommittee by providing the first dose loan to self-help groups.

In addition, banks were urged to renew and improve SHG loans in the 2nd, 3rd and subsequent years as provided by the RBI circular so that the average loan amount increases to a minimum of 2 lakh by the end of the current fiscal year and, thereafter, to Rs 4 lakh by 2022-23.

Concerns have been expressed about the low credit-to-deposit (CD) ratio of 59.89% of banks as of December 31, 2020. The CD ratio of public sector banks is 51.60% and that of the private sector is 83.82. %. Public sector banks, in particular, have been urged to increase the ratio.

It has been observed that nine districts, Angul, Deogarh, Gajapati, Jagatsinghpur, Keonjhar, Malkangiri, Mayurbhanj, Puri and Sambalpur, have a CD ratio of less than 40%. Meena advised forming and conducting meetings of the CD ratio subcommittee urgently to study the reasons and how to improve the CD ratio to reach the benchmark rate of 60% as stipulated by the RBI.

All SLBC sub-committees should monitor credit flow and other important matters at least quarterly before the SLBC meeting and discuss important matters at the SLBC meeting to resolve issues, urged Meena.

In order to strengthen the penetration of financial inclusion in Aspiring Districts, the Department of Financial Services (DFS) has extended a Targeted Financial Inclusion Intervention Program (TFIIP) to all 10 Aspiring Districts of the state. .

The collectors and responsible district heads (MDLs) of these districts were asked to achieve 100% of the key performance indicators (KPIs).