Credit Deposit Ratio - Implementation of the Recommendations of Expert Group on CD Ratio - RBI - Reserve Bank of India
Credit Deposit Ratio - Implementation of the Recommendations of Expert Group on CD Ratio
RBI/2005-06/202 Date: November 9, 2005 The Chairman / Managing Director Dear Sir, Credit Deposit Ratio – Implementation of the Recommendations of Expert Group on CD Ratio An Expert Group was constituted by Government of India under Chairmanship of Shri Y.S.P. Thorat, M.D., NABARD to go into the nature and magnitude of the problem of low credit deposit (CD) ratio across States / Regions and to suggest steps to overcome the problem. The Expert Group examined the problems and causes of low CD ratio and submitted its report to Government of India. The recommendations of the Group have since been examined and accepted by the Government of India with certain modifications. Accordingly, it has been decided that the CD Ratio of banks should be monitored at different levels on the basis of the following parameters –
Cu = Credit as per place of Utilization The Group has further recommended that :
2. In view of the above suggestions, it has been decided to set up Special Sub-Committee (SSCs) of DLCC in the districts having CDR less than 40, in order to monitor the CDR and to draw up Monitorable Action Plans (MAPs) to increase the CDR. The Lead District Manager (LDM) of the Lead Bank will be designated as the convenor of the SSC, which in addition to District co-ordinators of banks functioning in the area, will comprise of DDM, NABARD, LDO, RBI, District Planning Officer or a representative of the Collector duly empowered to take decisions on behalf of the district administration. The functions of the Special Sub-Committee will be as under:
3. As regards the districts with CDR less than 20 they are generally located in hilly, desert, inaccessible terrains and / or those dependent solely on the primary sector and / or characterized by a breakdown of the law and order machinery. In such areas, conventional methods are not likely to work unless the banking system and the State Government come together in a specially meaningful way. While the framework for implementation for raising the CDR in these districts will be the same as in the case of districts with CDR below 40 (i.e setting up of SSC etc.), the focus of attention and the level of efforts should be of a much higher scale. For this, the Group has recommended that:
4. Banks are, therefore, requested to initiate action for consitution of special Sub-Committees (SSCs) of the DLCCs in the districts having CDR less than 40 and take steps as stated in this circular. The districts having CDR between 40 and 60 will be monitored under the existing system by the DLCC. Please acknowledge receipt. Yours faithfully, |