Patna:The Bihar government has approved a set of recommendations from a high-level committee tasked with reviewing the performance of banks operating in the state.
Deputy Chief Minister and Finance Minister Bijendra Prasad Yadav has endorsed the committee’s recommendations, which include stricter monitoring of banks with poor lending performance and possible restrictions on government deposits if improvements are not made within six months.
The committee, chaired by Development Commissioner Mihir Kumar Singh, was constituted to review banking operations, credit disbursal and financial inclusion indicators in Bihar.
Government deposits may be withheld from poor performers
The committee recommended a ranking system for banks based on a 100-point performance index linked to key state banking indicators.
Banks showing limited improvement in the Credit-Deposit (CD) Ratio and those achieving less than 50% of targets under key parameters will be placed under enhanced monitoring. Banks achieving less than 60% of their Annual Credit Plan (ACP) targets will also be reviewed.
The finance department said banks that fail to improve their performance over the next six months could face restrictions on receiving government deposits.
Focus on raising credit flow
The committee recommended revising the state’s Annual Credit Plan to support higher lending levels.
It suggested setting the ACP target at a minimum of 80% of projected deposits to improve Bihar’s CD Ratio. NABARD has been requested to revise its Potential Linked Plan (PLP), which has been estimated at Rs. 3.55 lakh crore for the current year.
The State Level Bankers’ Committee (SLBC) has been asked to formulate a revised ACP based on the updated projections.
Larger banks asked to improve lending
The committee observed that Bihar’s CD Ratio improves significantly when the deposits of large banks such as State Bank of India (SBI) and Punjab National Bank (PNB) are excluded from calculations.
According to the review, the state’s CD Ratio stands at 68.16% after excluding SBI deposits and rises to 72.75% when both SBI and PNB are excluded.
The committee recommended assigning higher credit targets to major banks to improve overall lending performance in the state.
Push for Jan Samarth portal integration
To streamline credit delivery under government-backed schemes, the committee recommended integrating applications for Kisan Credit Cards (KCC) and other loan programmes with the Union government’s Jan Samarth portal.
Officials said the portal would allow applicants to access multiple banks through a single platform and improve monitoring, application processing and credit disbursement.
The committee also recommended awareness campaigns at the panchayat level to encourage farmers and self-help groups to submit KCC applications through the portal.
Fifteen banks identified for closer monitoring
The committee has recommended close monitoring of 15 banks, including:
- UCO Bank
- Union Bank of India
- Central Bank of India
- Punjab National Bank
- Bank of India
- State Bank of India
- IDBI Bank
- Indian Overseas Bank
- Bandhan Bank
- Bank of Maharashtra
- Karnataka Bank
- Unity Small Finance Bank
- IndusInd Bank
- Utkarsh Small Finance Bank
- Karur Vysya Bank
The finance department said formal communication would be sent to these banks, urging them to improve performance against state banking targets.
Committee to conduct regular reviews
The high-level committee was constituted following a decision taken at the 95th quarterly meeting of the State Level Bankers’ Committee held on January 22 this year under the chairmanship of Bijendra Prasad Yadav.
The panel will conduct periodic reviews of Annual Credit Plan achievements, Credit-Deposit Ratio trends and financial inclusion indicators, while recommending corrective measures to strengthen banking services and credit delivery across Bihar.
The committee comprises the Development Commissioner as chairperson, with representatives from the finance department, Reserve Bank of India, NABARD and State Bank of India among its members.
