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Poor CD Ratio In 10 Dists

Bhubaneswar: As many as 10 out of 30 districts in Odisha have a Credit-Deposit (CD) ratio less than the Reserve Bank of India (RBI) stipulated norm of 60 per cent by the end of financial year 2021-22.

The districts are—Angul (58.59 per cent), Cuttack (55.85 per cent), Deogarh (55.85 per cent), Gajapati (47.29 per cent), Jagatsinghpur (41.82 per cent), Keonjhar (40.16 per cent), Malkangiri (53.80 per cent), Mayurbhanj (48 per cent), Puri (55.35 per cent) and Sundargarh (58.99 per cent).

However, there was no district with CD ratio below 40 per cent in the State till March end, 2022. Recently held by the State Level Bankers’ Committee (SLBC) the issue came up for discussion.

The top three districts with high CD ratio are—Jharsuguda (305.26 per cent), Boudh (130.04 per cent) and Rayagada (118.90 per cent). Similarly, the bottom three districts are—Gajapati (47.29 per cent), Jagatsinghpur (41.82 per cent) and Keonjhar (40.16 per cent).

While total Deposit as on March end was Rs. 4,30,073.31Crore, Advance Utilized in the State is Rs. 3,10598.74 Crore. Thus, the CD ratio stood at 72.22 per cent.
Total Deposit as on March end of 2021 was Rs. 381178.48 Crore and Credit was Rs. 237111.94 Crore. So, the CD ratio by the end of financial year 2021-22 was 62.20 per cent.

The CD ratio of public sector banks has been increased from 48.23 per cent (by the end of FY-21) to 60.63 per cent (FY-22). The CD ratio of RRBs slightly increased to 42.21 per cent from 41.43 per cent.

Similarly, the credit-deposit ratio of cooperative banks increased from 124.79 per cent to 129.18 per cent and small finance banks from 219.78 per cent to 224.56 per cent by the end of last fiscal.

However, the CD ratio for Private Sector Banks have decreased from 77.65 per cent as on 31.03.2021 to 72.47 per cent as on 31.03.2022 (especially Axis Bank, Bandhan Bank, HDFC Bank, ICICI Bank).

The main objective of the RRBs is to provide credit to the local people and other banking facilities to the small, marginal farmers, agricultural laborers, small artisans, etc. However, the lower CD ratio hinders the fulfillment of credit aspiration of the people. As on 31.03.2022, CD ratio of Odisha Gramya Bank is 43.08 per cent and that of Utkal Grameen Bank is 40.57 per cent.

It is observed that the CD ratio of RRBs is lowest. Therefore, Odisha Gramya Bank & Utkal Grameen Bank have been asked to take all necessary steps for increasing the CD ratio.

In the FY 2021-22, total Priority Sector loan disbursement is Rs.1,02,590.26 Crore against the annual target of Rs.1,10,241.02 Crore. Thus, the achievement under ACP is 93.06 per cent.

The credit flow to housing and education segments under the priority sector is quite low, where the annual credit plan (ACP) achievement is only 34 per cent.

The MSME sector is the backbone of the State’s economy and plays a significant role in employment generation. The ACP achievement for this sector in FY 2021-22 is Rs. 4,2691 crore which is 103 per cent of the target i.e. Rs. 41,325 crore. However, the growth in credit to this sector over the last year is less than 10 per cent.