THE BANKING sector in Madhya Pradesh has witnessed a growth in aggregate deposits by 5.40 per cent, which stood at Rs 64,496 crore and total advances by 9.20 per cent, touching Rs 42,327 crore in the second quarter of current fiscal.
Of the total credit flow, priority sector had a share of 60 per cent and agriculture advances formed 35 per cent.
“The State had a healthy index under priority sector advances as well as agriculture advances in comparison to national norms, along with the CD Ratio of 65.63 per cent — also above the national norm,” Central Bank of Indiaa’s executive director K Subbaraman said while chairing the 126th State-level Bankers’ Committee meeting at the Central Bank’s zonal office here on Saturday.
The State in the banking sector also has an achievement – a unique one in the country – by 100 per cent distribution coverage of the Kisan Credit Cards (KCC) in Ratlam district.
“We will replicate the success story in six more districts – Guna, Narsingpur, Hoshangabad, Anuppur, Sidhi and Umaria in the State, which would help in the development of Scheduled Castes and Scheduled Tribes,” SLBC convener and bank zonal manager R P Tripathi said.
Referring to a pilot project for 100 per cent coverage of KCCs and financial inclusion underway in Ratlam and Jhabua districts, Subbaraman said under financial inclusion 2,450 ‘No Frill Accounts’ have been opened in Ratlam district and 7,700 in Jhabua.
“Both investment and consumption demand are on an upswing, with the agriculture sector showing signs of improvement in performance. The demand for bank credit has been growing at above 30 per cent whereas the growth in aggregate deposits has been at around 21 per cent,” he pointed out in his keynote address.
Referring to the robust performance of the economy, Subbaraman lamented that the benefits of growth failed to reach the rural poor in full measure and to improve upon it, the micro credit movement spearheaded by the banking sector could play a vital role.
“SHGs are an important component of this movement and there is need to form more such groups for getting the desired result,” he emphasised.
However, showing concern over only 27 per cent credit-linkage of SHGs, the bank executive director said though 3,42,000 SHGs have been formed by government departments, banks and various agencies, the desired level of linkage with the groups could not materialise.
Stating while money (financing by banks) plays only one component in the development process, there are several other components like proper implementation of schemes, forward-backward linkages et al should properly be monitored for better results.
“Sincere efforts need to be made by government agencies in implementation of policies and schemes related to employment generation in rural areas, in particular, whereas banks would facilitate financing through card schemes,” Tripathi said.
At the recovery front, Subbaraman said in an earlier meeting all State-level controlling offices of banks were asked to prepare a soft copy of the comprehensive list of RRCs pertaining to their banks and submit it to the Directorate of Institutional Finance (DIF). But except the Central Bank none complied with it. “Wrong identification of borrowers, leads to an increase in default rate,” he cautioned.
Taking stock of the performance of banks, Director, DIF, Ashok Barnwal asked them to pull-up their socks to improve some of the banks’ poor performance.
Pointing out the lack of coordination in some cases, he said since every bank has its State coordinator, inter-zone coordination should not be a problem.
MP’s Banking sector (Q2): Highlights & areas of concern
1 Aggregate deposits – Rs 64,496 crore
2 Total advances – Rs 42,327 crore
3 CD Ratio – 65.63 per cent
4 Growth in investments – 48.5 per cent (Rs 1,358).
5 Annual Credit Plan achievement – Rs 5,947 crore (56 per cent)
6 SHG credit-linkage low
7 Micro-credit – instrument of poverty alleviation
8 Bank supported micro-financing institutions not engaging in capacity-building & empowerment of SHGs
9 Mismatch in incremental growth rate between deposits & credit
10 One-time settlement scheme for dues up to Rs 25,000 extended to February 2007