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Urge For Credit Flow

Bhubaneswar: Finance Minister Niranjan Pujari on Thursday asked all banks functioning in the State to enhance credit flow to housing and education sectors.

Addressing at the 167th Session of SLBC meeting held here at State Convention Centre on Thursday, Mr.Pujari said the two segments which need due attention by all banks under priority sector are housing and education, where the annual credit plan (ACP) achievement is only 34% and need to be improved substantially.

Development Commissioner, Pradeep Kumuar Jena, APC and ACS, Agriculture Sanjeev Chopra, CEO of UCO Bank Soma Shankar Prasad, Principal Secretary, Finance, Vishal Kumar Dev, Secretaries and Senior officials of various departments, RBI, NABARD and SBI attended the meeting.

Stating Odisha is one of the fastest growing economies in the country, the Finance Minister said, over the years, Odisha has been successfully transformed from a poverty ridden state to an economically vibrant state following prudent fiscal management and the model of good governance in the country.

“We have achieved several milestones and added new chapters to our growth story under the dynamic leadership of our CM,” he said.

For the first time, the State has surpassed the Annual Credit Plan Achievement above Rs 1 lakh crore for the year 2021-22.  He congratulated all banks for disbursing credit to the tune of Rs 1.03 lakh crore which is more than 93% of Annual Credit Plan target for the year 2021-22 as compared to their achievement of 88% in 2020-21.

Mr.Pujari expressed happy to note that banks have surpassed the ACP target for MSME, Agri-Allied Sector, Export credit, Social Infrastructure and Financial target for SHGs for the year 2021-22.  He urged all banks to continue the momentum and increase the total credit of take and help expand the credit outreach in the state.

Agriculture continues to be the major source of livelihood for the people of the State. Banks have achieved 95% of the Annual credit plan under this sector by disbursing Rs 44,257 crore loan against the target of Rs 46,586 crore.  The increase is due to higher lending under Agriculture Term Loan.

He advised the commercial banks to improve their performance in the crop loan segment. Majority of the crop loan in the State is still provided by Cooperative Banks (around 60%) and commercial banks account for only 36% of total crop loan.

MSME sector is the backbone of our economy and plays a significant role in employment generation. The ACP achievement for this sector in FY 2021-22 is Rs. 42691 crore which is 103% of the target i.e. Rs. 41325 crore.  However, the growth in credit to this sector over the last year is less than 10%.

Further, low ticket size of loan under PMEGP, PMFME and PMMY is a challenge for the entrepreneurs to expand and sustain their business. The banks are advised to increase the lending as well as the ticket size of loans for overall growth of the sector.

The State Government has fixed a target of Rs 50,000 crore to be disbursed by banks among Women SHGs during next 5 years. Banks have disbursed credit to the tune of Rs. 6836 crore against the target of Rs. 6002 crore which is 114%. However, the average loan size for SHGs is only Rs. 2.2 lakh which is a major hindrance for transforming them into enterprises.

The Bankers have been asked to increase the quantum of 2nd and 3rd dosage of credit to the SHGs and enhance the average loan size to Rs 4 lakh by FY 2022-23 as required under 5T mandate.

Due to low penetration of banking network, a significant portion of State’s population is deprived of basic banking services. At present, the State has 5607 Brick and Mortar Branches present in 2738 GPs which is 40% of the total GPs of 6798. The rest 60% i.e. 4060 GPs are still under-banked, pointed out the Minister.

He urged controlling heads of all banks to open Brick and Mortar branches in under-banked GPs to ensure availability of banking services in remotest corners of the State.

The state has fixed an ambitious target of Rs 1.34 lakh crore under priority sector lending for the year 2022-23. Pujari hopes that the banks in coordination with the district administration will put maximum effort to achieve the target in a time bound manner.

The SLBC meeting was organised to take stock of the major banking activities particularly with respect to achievement under Annual Credit Plan for the Quarter ending March, 2022 and also for the Annual Financial Year 2021-22.