Patna, March 6: Banks in Bihar could be facing stern action for allegedly not disbursing loan to small and medium industrial units operating in the state.

Industries and food and consumer protection minister Shyam Rajak said the attitude of most of the banks towards providing loan was not satisfactory and stern action would be initiated if their approach did not change. "The banks operating in Bihar have always been reluctant towards disbursing loans to the industrialists and entrepreneurs. The problem persists and needs to be addressed swiftly."

The minister said the attitude of the banks was the same towards the centrally sponsored schemes meant for the development of small and medium enterprises. "A team has been constituted in the department to talk to the banks, both private and public sector institutions. It will come up with a report in the next fortnight, based on which action will be initiated," said Rajak, who took charge of the industries department last week after chief minister Nitish Kumar expanded his cabinet.

The state government had earlier initiated action against banks for poor accredit ratio. Fourteen banks were blacklisted in August 2012. In the same year in December, the state government blacklisted 13 banks and stopped depositing cash in them. But the decision was withdrawn after the banks assured the government of improving their credit ratio in the state.

Rajak said the focus of the industries department was on drawing investment and developing the Upendra Maharathi Shilp Sansthan, which aims at nurturing and developing different art and craft forms of the state. "The sansthan helps artists to grow and showcase their talent. The industries department will further develop the sansthan providing all necessary help. The state will showcase its creative talents to the country and work is on in this connection. We are also planning to hold some big investors' meet here to draw their attention towards Bihar," Rajak told The Telegraph.