Why does Assam lag in bank CD ratio?
STAFF REPORTER
GUWAHATI: Despite repeated requests from the State Government, the Scheduled Commercial Banks (SCBs) in Assam neither show their desire to meet the RBI benchmark of credit-deposit (CD) ratio nor do they open more branches as per their population coverage. The low CD ratio in the state makes the situation so precarious that the money deposited in Assam gets invested in other states.
According to RBI guidelines, the CD ratio of SCBs should be 60 per cent. However, till March 2021, the CD ratio in the state was 46.63 per cent on average. For example, in 2010, the deposit in the SCBs in Assam was Rs 49,565 crore against the credit disbursal of Rs 18,311 crore. After a decade, i.e. in 2021, the deposit was Rs 1,75,597 crore against the credit disbursal of Rs 81,870 crore.
According to a government report, Assam lags in population coverage by SCBs. At the all-India level, a bank branch covers a population of 9,074 on average against 12,307 in Assam. According to the report, in some districts in the state, the population coverage per bank is 15,000-20,000. "The low banking service in Assam is reflected by high population coverage per bank branch. Assam had 2925 SCB branches as of March 31, 2021. It is less than two per cent of the total SCB branches at the all-India level. In 2021, the state stood at a 46.63 per cent CD ratio. It was below the national CD ratio of 71.47 per cent," the report said.
According to official sources, the State government repeatedly requested the SCBs to increase their CD ratio in the state. The increase, however, is negligible. 'Poor loan repayment in the state' is the stereotyped reply for the SCBs when they face queries regarding the poor CD ratio.
The report said, "Although rural areas have more bank branches, the share of CD is higher for the urban and semi-urban bank branches. Of the total deposit mobilization by banks for 2021, more than 50 per cent was from urban areas, 27.6 per cent from semi-urban areas and 22.33 per cent from rural areas. On credit disbursement, the share of rural branches was 27.2 per cent, that of semi-urban was 30.31 per cent, and the share of urban branches was 42.49 per cent. It is because of capacity to save and invest in rural people in the state continues to be low. In Assam, only 13 districts have crossed the 60 per cent benchmark fixed for the CD ratio, while 12 districts have reached within 40-60 per cent level, and eight districts have less than 40 per cent. Altogether, 20 poor performing districts need special focus and intervention in the state."
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