NRIs dont need Bank Loans for Ventures

Loans is a word that does not exist in the dictionary of many businessmen in four districts of the states, which are flush with NRI remittances.

When a majority of businessmen in Kutch, Anand, Kheda and Navsari need money for a venture, they do not head for banks looking for loans. Rather, they dig their own pockets. And no amount of promotional activities by banks which have to ensure that atleast 60 percent of their deposits are dispersed as loans, has helped to improve the dismal credit deposit (CD) ratio of below 30 percent in these districts. Otherwise the CD ratio of the commercial banks in the state hovers around 65 percent.

Gujarat has more than 8 lakh NRI accounts with total NRI deposits for Rs 17,486 crore. NRI deposit worth Rs 8,390.15 crore is distributed by these for districts.

While these districts have the maximum number of NRGs, two Dangs and Porbander, have a low CD ratio of 25 percent, due to poor business activity.

According to the latest review report of the State Level Bankers' Committee, CD ratio ratio of commercial banks in Kutch, Anand, Kheda and Navsari is 22.78 percent, 24.85 percent, 27.30 percent and 17.92 percent respectively, says Dena Bank GM, Purshotam Kumar.

ICICI Bank's senior general manager; international retail product group, Anup Bagchi says remittances from NRIs make a higher contribution to the country's forex reserve of $160 billion than FII and FDI. And, Gujarat receives one of the highest remittances. However, RBI has asked all banks to set up their credit activities in these districts in order to improve the CD ratio.


//Source: indiapost.com/