RBI to nudge commercial banks to increase CDR in Bihar

Patna, Feb 18 – RBI Governor D. Subbarao today assured that the central bank will nudge commercial banks to increase the Cash Deposit Ration (CDR) to boost economic and industrial activities in Bihar.

The CDR in Bihar, though has improved in the past 5-6 years, at 34 per cent, it was still about half of the national ratio, he said at the plenary session of the Global Summit on Changing Bihar here. The ever improving CDR was both a challenge and an opportunity to Bihar which must be dealt with, Rao said, adding that the central bank was playing its role by nudging the commercial banks to improve CDR in Bihar.

In an apparent embarrassment to Chief Minister Nitish Kumar, who was sitting by his right on the dais, Rao sought to make light of the state government’s demand for improvement in the CDR in the state saying that commercial banks have told him that there was no demand for credit in Bihar. Bihar should expand its economy beyond agriculture and service sector to industries to take advance of the improvement in the CDR as was the case in other states, he said.

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