Credit flow to the northeast is still poor. This is the conclusion of senior bankers. They met representatives of NE state governments in Shillong with Reserve Bank of India Deputy Governor Vepa Kamesam in the chair. They discussed ways and means to improve credit –deposit ratio in the region. Though in the last few months, the situation has improved in general, it is felt that much more needs to be done.

The meeting reviewed the progress made by banks in each State in issue of Kisan Credit Cards and Micro-finance through self-help groups. It was observed that the banks should put in more efforts in this area and the State Government agencies should also offer their support for success of these schemes. Indian Institute of Bank Management at Guwahati should also organize training and sensitisation programme for bank and government officials in the region, the speakers at the meeting felt.

P. M. Sirajuddin, Joint Secretary, Union Ministry of Finance (Banking division) and Sajal Mitra from DONER also attended the deliberations.. The team of bankers was led Mr Hariharan, Deputy Managing Director, State Bank of India, Prithvi raj, Executive Director, UBI and V. N. Saxena, Executive Director, Central Bank of India, Dr KG Karmakar, Executive Director, NABARD. Meghalaya was represented Mr P J Bazeley, Additional Chief Secretary,, Tripura by Finance Secretary R K Mathur,  and Asam by Bijayendra, Finance Secretary.

The Deputy Governor expected that the state governments should now be able to utilize the RIDF funds provided by the NABARD for projects relating to agriculture and allied activities like water resource management and water harvesting, etc. Speaking on agricultural finance, Kamesam noticed that banks have reduced rate of interest on such loans and some banks have brought it down to 8.5 per cent for loans up to a specified limit. He added that different banks have fixed different limits for such loans consequent upon lower interest rates prevailing. Kamesam, while on the issue of district central cooperative banks and urban co-operative banks, advised the state governments to improve their working with a view to protect the interest of depositors. Some of the state governments brought to his notice the need of setting up of additional currency chests.

The Deputy Governor explained that consistent with its clean note policy, the Reserve Bank has been liberal in permitting banks to set up currency chests and said that any bank that meets the prescribed standards and safeguards would be considered favourably for a currency chest.

The next review of bank credit flow will be held six months later.

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