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RBI to nudge commercial banks to increase CDR in Bihar

Last Updated: Friday, February 17, 2012 - 21:58

Patna: Reserve Bank Governor D Subbarao on Friday assured Bihar Chief Minister Nitish Kumar that enough bank credit will be made available for economic and industrial activities in the state.

The central bank, he said, will nudge commercial banks to increase the Credit Deposit Ratio (CDR) so that banks could lend more to boost economic and industrial activities in the state.

Subbarao was speaking at the opening of the 3-day Global Summit on Changing Bihar.

Though the CDR in Bihar has improved in the past 5-6 years, at 34 per cent it was still about half of the national ratio, the RBI Governor added.

CDR refers to the portion of loan given as a percentage of deposits.

The Governor further said the improving CDR in Bihar is both a challenge and an opportunity for banks.

On Kumar's demand for raising CDR in the state, Subbarao said commercial banks have told him that there is not enough demand for credit in Bihar.

Bihar, he suggested, should expand its economy beyond agriculture and service sector to industries to attract more banking funds.

PTI

First Published: Friday, February 17, 2012 - 21:58
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