Apex Bankers to gather at Patna to discuss state of the East, North-East

This summer, public sector bank chiefs have a new destination on their travel schedule – Patna. That’s because Finance Minister Pranab Mukherjee has decided to bring the bank chiefs face to face with chief ministers of nine states in Bihar’s capital.

The agenda for the meeting is to address complaints of poor credit flow that states in the East and North-East have had for years.

So, on June 14, Mukherjee will hold two rounds of meetings at Samvaad, the conference centre at Chief Minister secretariat in Patna.
The first meeting, which is scheduled to kick off at noon, will be tripartite talks between the Centre, the state chief ministers and the 28 bank chiefs. “States have a lot of grievances which complain of lack of bank credit. The finance minister is trying to see how much of it is genuine. If the deficiency is on our part, the government might set a target,” said a bank chief, who has been invited for the meeting. The finance secretary of an eastern state said that credit-deposit ratio is their biggest area of worry.

According to the latest available Reserve Bank of India data, the credit-deposit ratio in the eastern region comprising Bihar, Jharkhand, Orissa, Sikkim, West Bengal and the Andaman and Nicobar Islands, was 48.9 at the end of March 2009, compared to the national average of 72.6. In the North-East the CD ratio was estimated at 35.8.

While bankers cite low income levels in the eastern and north-eastern part of the country, state governments also blame the lack of branches for dispensing loans as the main reason for low credit. Against the national average of one bank branch for every 15,000 persons, in the North-East the number was 21,000 and in the eastern states it was 19,000 at the end of June 2009.

Mukherjee, who has not reviewed the performance of public sector banks for a year, decided to club the exercise with the grievance redressal session in Patna.

Though the meeting has been convened at the behest of the finance ministry, the logistics are being handled by the Bihar government, official said.