Record desposits in Bihar banks in 2006-7

Banks in Bihar have achieved record deposits of over Rs 56,000 crore during the financial year 2006-7, an increase of Rs 14,000 crore compared to the previous financial year (2005-6).

Banks in Bihar have achieved record deposits of over Rs 56,000 crore during the financial year 2006-7, an increase of Rs 14,000 crore compared to the previous financial year (2005-6).

According to Deputy Chief Minister and Finance Minister Sushil Kumar Modi this is good news and an indication of the growing economic activity in the state. However, the bad news is that banks have failed to improve the Credit-Deposit Ratio (CDR) and it remains as low as before at less than 40.

The primary reason behind the record deposits, however, is said to be the high rate of interest paid by the banks during the end of the last financial year that attracted customers who parked their money in the banks.

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Though credit disbursement by different banks has been credible with 87 per cent of the target fulfilled, it has failed to improve the CDR due to a record increase in deposits. In 2006-7 different banks were given a target of disbursing a credit of Rs 10,000 crore. Against this the credit figure is Rs 8,738 crore of which Rs 5,500 crore is in the priority sector, while Rs 3,237 crore in the non-priority sector.

Along with the scheduled banks, private banks too, despite having very few branches in the state, have cornered a good portion of the total deposit of Rs 56,341 crore.