ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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POLITICS-Criminals Last Resort

priority sector advances by banks is sure to hurt the growth of those centres which have otherwise a significant potential for generating non-farm employment and production activities. More than 40 per cent of bank deposits are generated in such areas including small-size urban centres. Semi-urban centres produce about 20 per cent of bank deposits, but the most disquieting aspect has been that the banks have been increasingly desisting from expanding their lending activities in such areas. As against the prescribed target of 60 per cent, the credit-deposit ratio of these semi-urban branches, which had ranged from 52 per cent to 54 per cent during the 1980s, declined to 47.5 per cent in March 1992 and further to as low a figure as 39.9 per cent in March 1994. While it is true that the economies of semi-urban centres have trading as a dominant profile, such a sharp reduction in the proportion of deposits deployed as credit in these centres is indicative of an acutely biased credit delivery system which is hindering the goal of a more diversified pattern of development. Similarly, the reluctance of banks to expand lending business in rural and semi-urban areas would appear to give the impression that many of the existing bank branches in such centres are uneconomic, which, in turn, would make the banks even more reluctant to expand their branches.

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