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Twelve banks fail to meet CD ratio norms
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Twelve commercial banks operating in Odisha, including top private sector lender ICICI Bank have failed to meet the minimum CD (credit deposit) ratio of 60 prescribed by the Reserve Bank of India (RBI).
While ICICI Bank had a CD ratio of 58.50 (as on June 30, 2012), other private banks like Indus Ind Bank and Federal Bank fared worse with CD ratios of 30.90 and 27.49 respectively. Three other private sector lenders- ING Vysya Bank (6.34), South Indian Bank (4.81) and Laxmivilas Bank (11.90) have even more abysmal CD ratios.
Among public sector lenders, six banks- Bank of India (53.86), Bank of Maharashtra (38.27), Punjab & Sind Bank (36.74), State Bank of Travancore (57.92), Syndicate Bank (27.13) and Vijaya Bank (33.72) did not meet the RBI mandate on CD ratio, according to latest data compiled by State Level Bankers’ Committee (SLBC).
“I’m told that the overall CD ratio of banks in the state is 77. This is higher than the RBI norm of 60 but we should not be complacent. The CD ratio of State Bank of India (SBI) is a mere 60. The CD ratio can exceed 80 and in some cases can also move beyond 100. Commercial banks need to step up lending to the agriculture sector as most of the loans to this sector are advanced by the cooperative banks,” state finance minister, Prasanna Acharya said here at the 128th SLBC meeting.
Latest SLBC data reveals that the CD ratios of Deogarh (34.89), Gajapati (38.02), Jagatsinghpur (36.46), Kandhamal (38.2), Malkangiri (21.05), Rayagada (37.57) and Sambalpur (16.06) have disappointingly low CD ratios.
S Chandrasekharan, executive director, UCO Bank and chairman of SLBC-Odisha said, “Banks in Odisha have met all major parameters except DRI (differential rate of interest) advances. While banks are performing as per expectations in financing for government sponsored schemes, recovery under such schemes is very dismal. We expect the government to examine our recommendations made in respect to amend the prevailing Odisha Public Debt Recovery Act.”
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