Credit-deposit (CD) ratio in Assam is much below the RBI benchmark

STAFF REPORTER

GUWAHATI: The trend of the credit-deposit (CD) ratio of the scheduled commercial banks in Assam has been less than the stipulated benchmark of 60 percent as per RBI guidelines.

A study by the State Government said, "The banks could exceed the target of only 48.62 percent credit against deposit in the state as of March 31, 2022. It is against the RBI’s stipulated CD ratio of 60 percent."

The study said that of the 33 districts in the state, only 12 districts have crossed the 60 percent benchmark threshold fixed for CD ratio, while 19 districts have reached the 40 to 60 percent level. Two districts have a CD ratio of less than 40 percent. In total, there were 20 low-performing districts in need of special attention and intervention by the commercial banks. The deposits of all banks in the state in fiscal 2021–22 were around Rs 1.89 lakh crore compared to around Rs 92,000 crore in credit.

According to sources, there is a tendency that the banks in Assam are reluctant to extend credits to agriculture and small-scale sectors, besides the weaker section of the population, etc. They have the stereotyped excuse that the repayment record in the state is not up to par. A section may have poor repayment records, but for that the whole population of the state should not suffer.

The study said, "The annual credit plan of the banks in Assam for the year 2021–22 shows that, against a target of Rs 16,744 crore in credit to agriculture and related sectors, the achievement was 34.61 percent. Of the target achieved, 18.79 percent was under crop loan. The achievement was less than the target achieved for the previous financial year. However, the crop loan is one of the most important means of short-term advance extended to the farmers to procure seeds, fertilisers, machinery, etc."

The public sector banks are the major suppliers of credit requirements to the state. The share of credit for private sector banks in Assam was approximately 36 percent, while the same for public sector banks was approximately 66 percent.

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