Nitish Kumar nudges banks for better credit flow
Chief minister Nitish Kumar Monday asked bankers to ramp up the annual credit plan (ACP) with a view to improving the credit flow in the state to aid government’s efforts to create adequate job opportunities for migrant workers who wish to stay back and work here.
The chief minister, who was addressing bankers at the 72nd state level bankers committee meeting, said people of the state are inclined to deposit their savings with the banks. “But against a deposit mobilization of Rs 3,71,783 crore in 2019-20, banks have disbursed loans worth Rs 1,52,257 crore in Bihar and deployed the rest in developed states. Bankers must reverse the trend and contribute in bolstering economic activities and job creation by pushing up the dismal C:D ratio of 43.03% somewhere near the national average,” he said.
The first step would be to increase the ACP target and, at the same time, augment their branch presence at the panchayat level to ensure that none of the 8,386 panchayat remains without a bank branch. “We are ready to provide space in panchayat bhawans and government buildings as banking presence will help boost credit flow into labour intensive micro, small and medium enterprise sector, along with agriculture and allied activities (animal husbandry), handicraft and handloom sectors for creating job opportunities,” he said.
The chief minister’s remark came in the backdrop of a continued slide in C:D ratio, from 45.38% in 2017-18 to 44.04% in 2018-19, and, now, to 43.03% in 2019-20 and a stagnation in the ACP targets for financial year 2020-2021--the same as FY 2019-20--at Rs 1,45,000 crore at a time when the state was in the midst of a pressing need to accommodate its non-resident workers in the wake of a reverse migration triggered by Covid-19 induced lockdown.
Kumar said banks must take up the task to open an account for everybody and also increase the credit limit for over 9.5 lakh self-help groups (SHGs) to Rs 3-10 lakh from the current limit of Rs 1-5 lakh. “Similarly issuance of kisan credit card (KCC) should be stepped up as only 50,000 new KCC have been issued, against 3.70 lakh fresh applications. The access to subsidized credit invariably goes a long way in spurring agriculture-related activities,” he said.
The CM appreciated bankers for carrying out banking operations, during the lockdown period, which, he said, helped the state in ensuring direct benefit transfer into the accounts of beneficiaries to the tune of Rs 8,500 crore.
Deputy chief minister-cum-finance minister Sushil Kumar Modi, in his video interaction with media persons, said the government has laid down its expectations from the banks, as it was the first SLBC meeting of the current fiscal and major part of the first quarter remained under lockdown.
As for the loan disbursal of Rs 1,05,400 crore that stood at 72.69% of the ACP target of Rs 1,45,000 crore for 2019-20, Modi said that the bankers attributed it to prevailing slowdown and beginning of the imposition of lockdown in the month of March. “We are in the process of mitigating their concern regarding verification of land possession by providing then direct online access to land records for loan purposes,” he said.
Deputy CM said that as many as 17 banks have been identified as laggards in loan disbursal and the ACP achievement in 27 districts have been found to be way behind the average performance. “We will keep a close watch and also ensure that nearly 12 lakh dairy farmers, who are also the members of COMPFED, are provided KCC to have access for soft loans for expanding their business,” Modi said.
Besides them, 74,000 street vendors have been identified for providing financial assistance of Rs 10,000 and 23,951 collateral free loan beneficiaries are being sanctioned Rs 638 crore as part of the initiative to provide them 20% additional working capital to tide over the crisis caused by lockdown. “The extension in moratorium period for farmers, from June to August 31, will benefit 11.39 lakh KCC holders,” the deputy CM said.