Kolkata: Despite banks attributing West Bengal's low credit-deposit ratio to lack of demand, Reserve Bank of India (RBI) views the state has a reasonable appetite for credit.
"I do not agree to the banks maintaining that credit absorption in low in West Bengal due to lack of growth, the state has a good appetite for credit", regional director (east) of RBI B P Kanungo said.
Credit growth is not a function of growth alone, he said adding banks have developed an aversion of taking risks in view of the rise in the deterioration of asset quality.
Banks should now focus more on priority sector and MSME advances instead of eyeing big borrowers where advancing credit was more risky, Kanungo said at an interaction at BNCCI here today.
Banks, he said, were yet to adopt better risk management practices while advancing credit.
Regarding financial inclusion in West Bengal, he said that so far 9805 villages with a population of 2000 each was covered. The target was to cover all 37,945 such villages in the state by March 2018.
On the rogue finance companies operating in the state, he said these entities were not under RBI's supervision and the apex bank could only create awareness among the people.