Palakkad’s plummeting CD ratio causes concern

Raise it to an ideal 75%, banks told at review meet where several institutions were pulled up for failing to disburse loans

A district-level banking review meeting here on Wednesday raised concern at the sharp fall in Palakkad’s credit-deposit (CD) ratio. Several banks were pulled up for failing to disburse loans in the first quarter ending June.

Reviewing the banking statistics, Lead District Officer and Assistant General Manager of the Reserve Bank of India V.V. Visakh urged the banks to raise the CD ratio to an ideal 75%. “You should spend a minimum of three-fourths as loans,” Mr. Visakh said.

He warned that Kerala had become the State with the lowest CD ratio in the country. “This is a matter of serious concern. You are making deposits; and other States are giving in loans,” he said.

The meeting suggested that an action plan be formulated for public sector banks to improve their credits. The banks in the district could achieve only 15% of the target in the last quarter. When public sector banks attained only 9%, private sector banks 12%, and cooperative banks 25%.

Banks such as Axis Bank, CSB Bank, Bank of Baroda, Punjab National Bank, Karur Vysya Bank, Kotak Mahindra Bank, Yes Bank, and ESAF Bank were found to have performed abysmally, especially in disbursing educational and industrial loans. The meeting underscored that the district had immense potential for industrial loans.

Be humane

Addressing the meeting, Ramya Haridas, MP, urged the banks to treat the requests for educational loans in a humane manner. “Use your knowledge and expertise that you gained from elsewhere for the development of this district. And show a human face while dealing with educational loan requests, because that will be an investment of much larger value,” she said.

Mr. Visakh too urged the banks to be empathetic when dealing with educational loans.

Appoint nodal officer

He also suggested that all banks appoint a nodal officer for improved communication with the Lead Bank.

“The district development officer is the single point of contact for the people and their representatives. Communication with the banks will become easier only if they have a nodal officer,” he said.

Kavitha Ram, assistant general manager of NABARD, urged the banks to promote long-term lending in agriculture.

Non-farm sector

She also asked them to focus on non-farming sector lending. The district’s credit in non-farming sector was found low.

Deputy Collector for Revenue Recovery Abbas V.E., citing a particular example in an SBI loan recovery, raised the government’s concern at the failure of the bank in paying 7.5% due to the Revenue Department. SBI regional manager Anandanarayanan K.R. said he would examine the case in question.

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