The RBI Governor, D. Subbarao has hinted a probable relaxation of policies in the hilly state of Uttarakhand. The move will encourage banks to expand their operations in the state by opening new branches.
"The Reserve Bank and the government, as the case may be, will relax the policy guidelines to see that there is greater penetration of banking system in the hilly areas," said the Governor.
Top three public sector banks- State Bank of India, Bank of Baroda, and Punjab National Bank have already agreed to increase the credit-deposit (CD) ratio in five districts in the state. Improvement in CD ratio would have to be augmented by the state government's role in small and medium enterprise (SME) loans.
The Governor raised concerns over the per village branch numbers, which need to be improved.
"We have told banks and state government to prepare an operational plan which will focus on taking banks to hilly areas, taking banks to uncovered districts".