A meeting held last week provided a platform for the bankers and the state government officials to vent their ire against each other. Both blamed each other in the presence of the parliamentary committee. However, the arguments put forward by the state government officials were more persuasive.

Disgusted, industrial development commissioner of Bihar GS Kang went to the extent of asking the committee to relegate the Prime Minister's Rojgar Yojana (PMRY) entirely to the bankers. "Our job is to forward the schemes and applications. It takes nearly six months for bankers to disburse the loans," Kang said. He was of the view that most bankers donot take such meetings seriously.

In the current year, against a target of covering nearly 23,500 people under the PMRY, only 4,000 applications have been sanctioned till date. Out of these, banks have dibursed loans to only 1,600 persons. Against the limit of Rs 1 lakh, the average loans disbursed to persons amounted to Rs 65,000 only.

Kang also expressed deep concern over the role of the Reserve Bank of India (RBI) Patna unit, and asked the RBI representative to take the officials of the state government into confidence and take action against the erring bankers who have not disbursed the loans in time.

Reacting to criticism, a banking sector representative said: "There is no credit absorption capacity in Bihar. Infrastructure is poor, law and order is poor and recovery too is very poor."

Institutional finance secretary of Bihar PP Sharma, who also attended the meet observed that altogether 16 regional rural banks (RRBs) have been exempted from the service area approach. Sharma said as many as47,000 villages have not been benefitted by a single PMRY scheme.

The annual report brought out by the institutional finance department of Bihar mentions that the fall in the C-D ratio pertaining to the RRBs in Bihar was from 55 per cent in 1991 to 27.95 per cent by the year ending March 1998.

After the state government set up an enquiry committee on erring NBFCs in the state, the deposits in the RRBs soared by at least Rs 572.35 crore in a span of just one year. The RRBs in the state had a deposit of Rs 1,601.25 crore by the year ending March 1996 and the following year for the same period, the RRBs had mustered a deposit of Rs 2,173.6 crore. This data has been released by the RBI.

Sharma also highlighted the success stories. He mentioned that the tea industry in the Kishanganj area has flourished. Tea production in the area has reached 80 lakh kg with 32 planters cultivating an area of 9,000 hectares. However, Sharma was critical of the fact that the State Bank of India (SBI) has not shown interest tofinance such tea projects.

Industrial development commissioner Kang also said the state produces surplus foodgrains, but bankers have not disbursed a loan of even Rs 100 crore to the farmers till date. In all, one-third of bank branches in Bihar have been zero-lending branches. "Out of the Rs 48,000 crore worth of non-performing assets (NPAs) in the country, Bihar records a total of Rs 670 crore. The bankers have not been financing the industries in the name of a vast NPA," Kang said.

When asked about the plans to meet the target of disbursing Rs 1,000 crore to improve the C-D ratio of the state, institutional finance secretary PP Sharma told The Financial Express: "Commercial banks have at least 3,085 branches in the state and the RRBs 1,895. The target credit flow for the last quarter of 1998-99 is expected to be Rs 319.72 crore from RRBs and Rs 1,001 crore from commercial banks."