Disappointed by the performance of public and private sector banks in Bihar, the state government has decided not to deposit government funds in 21 banks. On the matter, the Deputy Chief Minister of the state, Mr. Sushil Kumar Modi, said that the banks failed to provide loans as per the four point criteria because of which the government has decided to withdraw funds from these banks and will not make any deposits in these banks, until further notice.
It is reported that the Bihar state government had directed the banks to provide loans for developmental purposes. To ensure that the banks adhered to the state government's directive, the government provided the banks with ‘four point criteria' of advancing loans. The banks' performance is measured according to this criteria which has parameters such as credit deposit ratio, agriculture sector lending, Kisan credit card and primary sector lending.
On the performance of various banks Mr. Sushil Kumar Modi said that 21 banks, consisting of well known private sector banks - ICICI Bank and Axis Bank, have attained just 25 points out of a total of 100 points. About 13 banks could not attain any points and have scored zero while the rest could score only between 7 to 23 points. As a result, the state government has chosen to withdraw funds from these banks and it will also not make any deposits with them till the time government gives them further orders on the matter.
He also said that he regrets that in spite of having a remarkable loan repayment record, some banks are not advancing loans for developmental causes.