Expressing concern over the declining credit-deposit (CD) ratio in Kerala, Industries Minister P. Rajeeve has urged banking institutions to complement the State’s efforts to become industry-friendly.
While addressing the Assembly on Thursday, Mr. Rajeeve took a critical view of the lack of efforts made by banks in boosting credit growth. This has considerably hampered the prospects of entrepreneurs who wished to float industrial ventures.
National CD ratio
While the national CD ratio stood at 71%, the corresponding figure in Kerala presented a dismal picture. The ratio fell from 65.2% in 2020 to 62.3% last year, while many other States boasted healthier rates. The CD ratio was much higher in Tamil Nadu (101.7%), Andhra Pradesh (131.5%) and Telangana (93.2%), Mr. Rajeeve said.
He said the issue had been raised at a recent State Level Bankers’ Committee (SLBC) meeting during which banks were encouraged to ramp up their loan disbursement.
“Sadly, banks that have their roots in Kerala are yet to respond favourably to the demand. The CD ratios of Catholic Syrian Bank (38.43%), Federal Bank (41.59%) and South Indian Bank (52.17%) remained abysmally low. Despite being expected to play an instrumental role in boosting local economy, the State Bank of India (SBI) too had a low CD ratio of 50%,” Mr. Rajeeve said.
A different path
According to him, Canara Bank, the Lead Bank in the State, has charted a different path by recording a CD ratio of 93.14%. The bank has also decided to waive off ₹500 crore from dues that had to be repaid by cashew factories. “Such emulative models are bound to go a long way in boosting industries,” the Minister added, while responding to a question by M. Rajagopalan [CPI(M)].
