UP govt asks banks to enhance credit flow

| | Lucknow
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UP govt asks banks to enhance credit flow

Thursday, 01 December 2022 | PNS | Lucknow

With the objective of boosting the inflow of credit in the state’s economy, the Uttar Pradesh government is working with the public sector undertaking banks to enhance the credit flow and increase the credit-deposit (CD) ratio in the state. 

The increase in credit flow will enable the government to achieve the target of a 1-trillion dollar economy by 2027.

The overall CD ratio in Uttar Pradesh is about 52 per cent, the average CD ratio stands at 40 per cent in comparatively backward regions of eastern, central UP, and districts of Bundelkhand region.

The officials and institutions working for the expansion of UP’s economy are of the firm opinion that unless the credit flow is equitable across different regions, the goal of a 1-trillion dollar economy would remain elusive. The PSU banks have been asked to hike the CD ratio in the three regions from 40 per cent to 60 per cent in the next four months.

Official sources said that apart from increasing the CD ratio, there is a need to focus on the aspirational districts, blocks and towns, while spurring insurance schemes such as crop insurance in the laggard districts.

The sources said the state government had prepared short- and long-term action plans for the composite development of the state.

UP Chief Secretary DS Mishra, during the recent meeting of the State Level Bankers’ Committee (SLBC) here, had said that the role of banks would be crucial for the credit flow in the state. He said that concurrent with the pace of development, big industries would be attracted to UP and job opportunities would be created.

Earlier this year, Chief Minister Yogi Adityanath had asked banks to take steps to increase the state CD ratio. There has been a 9 per cent increase in bank deposits from Rs 13.13 lakh crore in the quarter ended September 2021 to Rs 14.31 lakh crore in September 2022. Similarly, the credit flow jumped from Rs 6.67 lakh crore to Rs 7.51 lakh crore in the corresponding period, a surge of 12.6 per cent.

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