Although the agriculture-based states CD ratio has improved marginally from 30% at the end of the second quarter of 2009-10, it is much below the target of 40%. CD ratio for the largest bank in the state-- Tripura Grameen Bank -- has dropped by 2% till December 2009.
According to a senior PSB official, lack of big industrial houses in Tripura is the main reason for its low CD ratio. According to him, almost 90% of the lending in the state is towards the priority sector, much higher than 30-35% in other developed states. But credit towards industry or core sector is significantly low.
While deposit in the state has grown by 27.74%, advances have grown by 18.8%. Such growth does not translate into any significant increase in the CD ratio as
According to industry estimates, almost 2 lakh farmers have to be given Kisan Credit Cards (KCC).
The banks in the state have decided to distribute that within next three years. While 65,000 KCC will be given during 2010-11, 70,000 will be given in 2011-12 and 75,000 in 2012-13. The agriculture department of the state will prepare village and blockwise list of farmers eligible for KCCs by June this year.
Although the state has, so far, been able to distribute 1.03 lakh KCCs to the farmers, almost 33% of that is not in operation at present.
But government officials of the state feel that merely distribution of KCCs will not solve the problem of credit crunch in the state. Even if all the farmers are issued KCCs, that will not bring significant change in the CD ratio, said an official.
Moreover, many of the corporate houses get their loans from outside Tripura, which does not help in improving the states CD ratio, said the official.
Banks support so far in funding self-employment schemes is not satisfactory. In fact, lending by the banks in the North-east is very low. CD ratio of banks needs to be improved to ensure that there is sufficient credit available for investment.
In order to improve penetration of formal banking institutions in the State Level Bankers Committee of Tripura is working on a timeframe to set up and open branches and banking outlets through business correspondent model. It is likely to connect all the blocks by September 2010.