Shillong, March 15: Members of the Meghalaya Assembly today expressed concern over the low credit:deposit (CD) ratio in the state, and underlined the need to adopt a strong policy to ensure that banks do not refuse to lend out their deposits.

CD ratio is how much a bank lends out of the deposits it has mobilised. It indicates how much of a bank's core funds are being used for lending, the main banking activity.

Raising the issue in the Assembly during question hour, leader of Opposition Donkupar Roy pointed out that the CD ratio of most of the banks in the state were very poor, as he sought to know the steps taken by the government to improve them.

According to the reply given by chief minister Mukul Sangma, there are at least 22 nationalised banks in Meghalaya, including State Bank of India, and their annual CD ratio differed from one another in the last three years.

Sangma, admitting the low CD ratio issue, said it has been one of the concerns of the government.

He said there was a need to open up more bank branches in the state so that people can access banking, promote entrepreneurship by taking advantage of the programmes of the central and state governments, and encourage the people to take loans and look to the banks for credit.

Roy said the low CD ratio has a direct impact on growth of the state as he demanded a specific policy to ensure that banks do not refuse to lend money to people in need.

He said there were many who found it difficult to get credit from the banks in the state, compelling them to seek loans from banks outside the state, leading to money flowing out of the state.

Opposition MLA Paul Lyngdoh said since the SBI received the highest deposits, the government should make sure that the SBI enhances its CD ratio.

Stating that the SBI is the lead bank in the state, Sangma said the funds of the state government are mainly deposited with the SBI, and at present funds of over Rs 782 crore are with the lead bank.

Sangma also hit out at the banks, saying "there is a problem of attitude... at the branch level." The chief minister assured that the state government would come up with a legislation to promote micro-finance in the state.