Banks in Karnataka disburse 28% of annual target in Q1

Banks in Karnataka have to quicken the pace of their financial inclusion (FIs) efforts in order to meet the target of covering the remaining 1,682 unbanked villages in the State, said the Chairman of State-level Bankers' Committee (SLBC) – Karnataka, Mr Basant Seth, also the CMD of Syndicate Bank, on Wednesday. Addressing the SLBC – Karnataka meeting, he said an additional 6,029 unbanked villages have been identified with of population of 1,000-2,000 and allocated to the banks through lead district managers (LDMs) for providing banking services. Mr Seth also said banks in the State have disbursed 28 per cent (at Rs 11,543 crore) of the annual target for the current fiscal (2011-12) under priority sector credit during the first quarter (Q1) ending June 2011. Under secondary and tertiary sectors, disbursement stood at Rs 2,003 crore and Rs 1,896 crore respectively. The target under agriculture credit is revised upward to Rs 31,380 crore in tune with national priority. The aggregate deposits stood at Rs 3.5 lakh crore while aggregate advances was Rs 2.6 lakh crore with a credit deposit ratio of 72.71 per cent. The advances to priority sector stood at Rs 1.1 lakh crore crore, constituting 42.44 per cent of credit, surpassing RBI stipulation of 40 per cent. Mr Seth urged the banks to accelerate credit flow to minority communities to improve the level to stipulated 15 per cent. Similarly, the advance to agriculture sector was Rs.47054 crore comprising 18.23 per cent of the total credit, which is above the stipulated level of 18 per cent. Advances to MSME sector stood at Rs 47343 crore.

Speaking on the occasion, Ms Uma Shankar, Regional Director RBI cautioned the banks for 7.3 per cent drop in CD ratio to 72.71 per cent in Q1 FY 2011-12, against 80.01 per cent same period last year. She also cautioned banks to adhered to strict deadline iron out differences with service providers and achieve the set financial inclusion goals by March 2012. “Banking correspondents (BC) model in the state needs to be standardised and rolled out faster. Along with training in banking, banks should also think about providing soft-skill training for BCs,” said Ms Shankar.  Mr S.N.A. Jinnah, Chief General Manager NABARD, said self-help groups (SHGs) are well covered in the State. But few districts have low density of SHG coverage and we need to focus on those districts to push for priority lending. Mr S.V. Ranganath Karnataka Chief Secretary, said the Government is looking for active assistance of Nabard to take up study on national rural livelihood mission.  The State Government is actively studying the proposal of using SHGs to actively increase their involvement in rural development.

HBL