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RBI focus on small industry
- Apex bank to deepen reach

- Move to curb fraudulent offers

Guwahati, Feb. 7: The Reserve Bank of India today emphasised on raising credit to micro, small and medium enterprises (MSME) and agriculture sectors and “deepening” financial inclusion in Assam.

Addressing newspersons after the apex bank’s central board meeting here this afternoon, RBI governor D. Subbarao said he had met Assam chief minister Tarun Gogoi yesterday and discussed issues relating to greater penetration of banking facility in unbanked villages with a population of over 2,000, increasing credit to MSME sector and curbing unincorporated bodies from collecting money through fraudulent offers.

“At the special SLBC (state-level bankers committee) meeting yesterday, we discussed issues related to credit to the MSME sector and the need to deepen financial inclusion in the state. Towards this end, banks have agreed to raise credit to the MSME sector by Rs 3,800 crore in 2013-14 and to open 200 additional rural bank branches in the state during 2013-14,” Subbarao said.

The RBI central board today reviewed the current economic situation, global and domestic challenges and policy responses. “The board meets at least once every quarter. The meetings in Mumbai, Chennai, Calcutta and New Delhi are held after the Union budget, while the rest are held in state capitals by rotation. The last time the board met in Guwahati was in 2003,” he said.

The RBI governor said the apex bank would assist in checking fraudulent practices by unincorporated bodies. “Police officers will be trained to prevent fly-by-night operators from cheating people,” he added.

The SLBC meet also decided that Nabard and the state government would form one lakh joint liability groups in 2013-14 to encourage credit to agriculture and allied activities.

It was also decided in the meeting that banks would strictly adhere to existing guidelines of not asking for any collateral from MSME borrowers if the loan was covered by Credit Guarantee Fund Trust for Micro and Small Enterprises Scheme.

On the low credit deposit ratio in Assam, the RBI governor said, “The CD ratio in Assam at present is around 47 per cent, which is lower than the national average (around 77 per cent). The chief minister had expressed concern in this regard and that the CD ratio needs to be raised.”

CMO sources said Gogoi had urged the RBI governor yesterday to consider a system of incentives and disincentives for banks whose credit deposit ratio is below 40 per cent and to devise an effective strategy for bringing the ratio at par with the national average.

The RBI governor and deputy governors also interacted with frontline managers and business correspondents of banks from the city and rural Assam yesterday. The objective of the meeting was to understand experiences and issues faced by them in deepening financial inclusion in the state.

Gogoi urged Subbarao to initiate measures to improve institutional credit in the agriculture sector, the sources said.

“Credit available for agricultural activities is only 20.4 per cent of the total credit given by banks,” Gogoi had pointed out in yesterday’s meet. He also underscored the need to open 2,400 bank branches in Assam.

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