Credit-Deposit Ratio goes negative in six districts

The Committee has now asked banks in these districts to set up special sub-committees at the district levels to monitor the CD Ratio. The banks have also been asked to draw up an action plan that can be monitored,to improve the CD Ratio.

At the recently held 120th SLBC meeting on June 25,it was found out that only the Lead District Manager of Porbandar had submitted a report in this regard.

The Lead District Manager of Porbandar has,in the meanwhile,come up with certain suggestions for improving the CD Ratio. It has been suggested that policy decision is taken for exclusion of NRE deposits while counting CD Ratio. The government should declare this area as an industrial zone and extend some relaxation in taxes.

It has also been suggested that since Porbandar district has ample mineral resources,the government should give more lease for mining. Besides,banks should increase their lending in transport business in the district.

The non-submission of IT Returns makes people ineligible for loans. As such,banks should finance against gold ornaments as people in this area have a traditional mentality to hoard gold ornaments,the suggestion said.

It added that corporate finance should also be considered in the district,where the actual fund is spent,even if the registered office is situated outside the district.

SLBC convener,Dena Bank general manager M K Jain said that other lead district managers of the remaining five districts were told to expedite the setting up of special committees to address the issue and submit their reports to the Reserve Bank of India (RBI). He said the RBI had told the Porbandar and other LDMs to send their proposals but has made it clear that the definition of CD Ratio could not be altered to suit any particular district.