RBI stresses entrepreneurship in NE to raise CD ratio

SHILLONG: The Reserve Bank of India today said entrepreneurship activity in Northeast should be improved and encouraged to raise the credit-deposit ratio in this area.

"If CD ratio of the Northeastern states is to be raised, then entrepreneurship activity in this area should be improved and encouraged," RBI Deputy Governor K C Chakrabarty said.

"CD ratio depends on big industries, but here we do not have much of those big industrial projects because of a variety of reasons," he said.

The RBI official maintained that in such a case, financial literacy should be taken on a war footing to increase the number of those who wants credits from banks.

Putting a word of caution, the RBI official said many people in NE did not need credit, they needed money in the forms of subsidies, grants etc.

Notwithstanding the backwardness of the region in terms of financial exclusion, the RBI Deputy Governor said banks and state governments have to work towards achieving overall growth.

"There is no inclusive growth without financial inclusion, which is linking everybody with banks," Chakrabarty said.

Financial inclusion in Meghalaya, with 291 bank branches, is about 37 per cent, lower than the national average, state Chief Secretary W M S Pariat said.

Cautioning 12 commercial banks whose CD ratio is less than 20 per cent, Pariat said these banks needed to improve their performance.

Congratulating the RBI for setting up an office in the state, Pariat said, "This would go a long way in facilitating the expansion of the banking and financial services sector, so much needed by our people."

The chief secretary said the government has initiated an Electronic Benefit Transfer mechanism for routing government payments to beneficiaries under MGNREGS by using biometric smart cards.