State Bank of India is likely to get an equity infusion of between Rs.3,000 crore and Rs.4,000 crore within this fiscal year, Chairman Pratip Chaudhuri said.
Mr. Chaudhuri was here to attend a meeting with the Union Finance Minister and the chief ministers and finance ministers of the four eastern and seven north-eastern states. Several other chiefs of banks and financial institutions participated in the meeting whose main agenda was to review credit flow to these states.
He told reporters on the sidelines of the meeting that SBI was expecting this fund-flow to come either by way of rights or common equity. “The government is ready with the cash but some final procedures are necessary.”
At the meeting, Mr. Mukherjee asked states to take steps to improve credit flow to farmers and to the micro and small enterprises sector whose employment-generation potential is second only to agriculture.
“It must be ensured that no eligible farmer is left out,” he told the meeting, referring to the scheme of making available short-term crop loans at an interest rate of 4 per cent. He said that in the first-half of this fiscal, the banking system had already extended a credit of Rs.2.23-lakh crore against the year's target of Rs.4.75-lakh crore. On the oft-repeated grouse of some states like West Bengal about the low credit-deposit ratio, the Finance Minister told the meeting that the region's average was lower than the national benchmark of 60 and in some states it was less than 30 per cent. He urged the states to take pro-active steps to ensure that CD ratio improved.
Mr. Mukherjee urged 10 states to release Rs.198.50 crore required for recapitalising regional rural banks (RRBs) saying that they played a major role in boosting banking activity in rural areas. On financial inclusion, Mr. Mukherjee noted that a massive effort was required by the state governments as well as banks, particularly the RRBs, to achieve the target of covering 23,000 villages allotted to the eastern zone. With a coverage of 12,000 villages till October 2011, a little over 50 per cent of the target (to be met by March 2012) has been achieved.
