Banks in J&K fail to meet lending target

CD ratio for state 48% as compared to RBI’s minimum 60% mark

Srinagar, Publish Date: Mar 22 2018 11:55PM | Updated Date: Mar 22 2018 11:55PM
Banks in J&K fail to meet lending target

Banks operating in Jammu and Kashmir continuously fail to meet the 60 percent credit-deposit (CD) ratio, the minimum disbursement target set by the Reserve Bank of India. 

Following poor performance of the banks on the lending front, Chief Secretary BB Vyas has expressed ‘concern over failure to meet the CD ratio target’ during the State Level Bankers Committee (SLBC) meeting held last month in Jammu,said a senior banking executive who was part of the meeting.

As per the minutes of the meeting, the CD ratio for the October-December quarter was only 48 percent against the target of 60 percent. 

“....House placed on record that the credit deposit ratio of banks in J&K state stood at over 48% as on 31st December, 2017, which was far behind the target of 60% CD ratio to be achieved by March 31, 2018 as per the stipulations of Governor, Reserve Bank of India. Chief secretary observed that in some of the districts, mostly in Jammu division, the CD Ratio was alarmingly low,” reads the minutes of the 107th SLBC meeting.

As per official data, J&K have extended a total credit of Rs 17,188 crore in favor of nearly 5.66 lakh beneficiaries under priority sector as well as non-priority Sector upto the end of Q3 of current financial year against annual credit plan target of around Rs 28,800 crore for 9.70 lakh beneficiaries.

“Deputy vommissioner, Pulwama, presenting his analysis on the low CD Ratio in Jammu as compared to Valley, stated that credit disbursement in Kashmir valley happen to be more owing to the fact that Kashmir is known for horticulture Sector,” the minutes read.

“In this regard he stated that the districts of Shopian and Baramulla have higher CD Ratio because of being horticulture hubs. Apart from that, cottage industry is on a higher success pedestal in Kashmir valley than in Jammu. In reply to the comment of principal secretary finance as to why the CD ratio in districts of Kulgam and District Pulwama is lesser than district Shopian, though all these districts belong to the same geography, the deputy commissioner Pulwama clarified that in Shopian 100 percent of the area is covered under the horticulture for which credit needs are higher, whereas in Kulgam and Pulwama districts the land is abundantly covered under paddy and the crops grown in these two districts are mostly consumed locally, as a result there is less requirement of credit in these districts as compared to Shopian,” it adds.

Further the meeting stated that the issue of title deeds had come out to be one of the major impeding factors for dispensing housing sector loans and it was observed that people either do not have the title deeds available, or the title deeds are inadequate or not updated.

“Chairman J&K Bank attributed low credit flow to the housing and education sectors to the delays faced by the people in getting clearance from the Revenue Department. He stated that because of these delays borrowers prefer to avail high-cost personal loans for their housing needs or the educational needs than taking the housing loan and educational loans with comparatively lower interest rates, as the borrowers are subjected to the hassles of acquiring title deeds of their properties. He expressed optimism that as soon as the digitization of land records in the state is completed, the process for acquiring the title deeds will become easier for the borrowers, which will lead to increase in flow of credit under these sectors,” the minutes of the meeting state.


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