“There is no financial crisis in the state. The state government is just accessing facilities (extended by the RBI),” Subbarao told mediapersons after meeting the chief minister. State Minister for Finance Asim Dasgupta, who was also present at the meeting, said the main issues discussed were opening of new branches in villages that have population of more than 2,000, regulating the Micro Finance Institutions (MFIs) and increasing the Credit Deposit Ratio (CDR).
“In West Bengal, there are 7,486 villages with more than 2,000 population but without any bank branches. We have set a target of 2,581 villages where we will set up bank branches by March 31, 2011. By the end of September this year, we have been able to set up branches in 324 villages. We will have to accelerate our pace of work,” said Dasgupta. He said out of 2,581 new branches, 125 will be housed in concrete buildings and remaining 2,456 will be run by banking agents. “We will designate self help groups who will be the banking agents with power to lend money,” the minister added.
The banks, Dasgupta said, will be told to increase the amount of loan they give to common people. “In Andhra Pradesh, the total amount of agricultural loan disbursed last year was Rs 40,000 crore whereas in West Bengal it was just Rs 8, 300 crore. This year we have set the target at Rs 20,000 crore,” Dasgupta said.
The RBI has, however, expressed its reservation of the poor CDR of Bengal. “The CDR in West Bengal is lower than the national average. It has to be reversed,” Subbarao said. During the meeting, they discussed how to increase the ratio.
On the issue of regulating the NMFIs, Dasgupta said: “Allegations regarding charging high interest, mode of recovery etc have been raised from time to time and we will take measures to control them in tandem with the RBI.” The state has 21 MFIs.