By RABINARAYAN JENA, OP
Bhubaneswar: Odisha is witnessing significantly slower bank credit growth compared to the national average, with the state’s growth rate standing at just 9 per cent against the national figure of 20 per cent. This leaves Odisha 11 percentage points behind the national average, highlighting the underutilisation of the state’s lending and credit potential.
Despite considerable opportunities for credit expansion and financial transactions in Odisha, banks have failed to fully tap the available potential. This concerning picture of the state’s banking sector emerged during a recent meeting of the State Level Bankers’ Committee (SLBC).
At the SLBC meeting convened by the Finance Department, Principal Secretary Sanjeeb Kumar Mishra urged banks to step up their lending activities, particularly in the horticulture sector. He pointed out that Odisha has immense potential for horticultural development and stressed the need for greater credit support and financial assistance to promote the sector.
Mishra also called upon banks to treat horticulture as a distinct sector rather than clubbing it with conventional agriculture. He urged them to take proactive steps to introduce dedicated schemes and specialised credit facilities to support horticultural activities and unlock the sector’s growth potential. The Joint Secretary of the Union Finance Ministry, meanwhile, highlighted concerns over Odisha’s Credit-Deposit (CD) ratio.
He advised banks to address discrepancies between the CD ratio figures published by the Reserve Bank of India (RBI) and the SLBC, stressing the need for uniform and consistent data for the state across both institutions.
He also expressed concern over the declining performance of banks under the Annual Credit Plan (ACP) over the past two years and called for immediate corrective measures to improve credit disbursement. Despite provisions under certain government schemes allowing collateral-free loans of up to Rs 20 lakh, credit flow in Odisha has remained below expectations.
Banks have allegedly failed to adequately implement these provisions, creating hurdles for aspiring entrepreneurs and discouraging new business ventures. The SLBC Convenor and Managing Director of UCO Bank urged banks to achieve their sector-specific lending targets every quarter and conduct regular reviews of their performance.
He also stressed the need for speedy approval of loan applications under government-sponsored schemes and timely disbursement of sanctioned loans. The meeting further sought government intervention to address infrastructure-related challenges faced by Rural Self Employment Training Institutes (RSETIs) to ensure their smooth functioning.
Additionally, the committee recommended that the Finance Department issue appropriate directions to expedite the process of obtaining district collector’s approval in loan recovery cases under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. Odisha has significant potential for growth in sectors such as industry, agriculture, micro and small enterprises, and self-employment.
However, the sluggish flow of bank credit has emerged as a major challenge to the state’s economic growth, a senior Finance Department official said.
