PATNA, June 11 -- The Bihar government issued a strong warning to several nationalised banks over their poor credit-deposit (C:D) ratio in the state. Officials said on Wednesday that the government cautioned banks that their performance would be monitored over the next six months. Failure to improve lending to the people in Bihar could lead to restrictions on placing government deposits with them. The warning was communicated on June 5 to the heads of major banks, including SBI, PNB, BOI, IDBI Bank, Indian Overseas Bank among others. The move is significant because Bihar has an annual government budget of around Rs.3 lakh crore, accounting for nearly 25% of the state's economy, making government deposits a major source of banking liquidity. The action follows the recommendations of a high-level committee constituted by the government to review banking performance and improve state's credit-to-deposit (C:D) ratio. According to the findings of the high-level committee's second review meeting, chaired by Bihar development commissioner Mihir Kumar Singh in Patna on May 18, the state's overall C:D ratio improved to 60.21% in 2025-26 for the first time. However, it remained far below desirable levels due to poor lending performance by some large public sector banks, including the SBI and the PNB. The committee, constituted by Bihar's deputy chief minister Bijendra Prasad Yadav, who is also the cabinet minister of finance, planning and development, is chaired by development commissioner Mihir Singh. It also includes Bihar's finance secretary, regional director of the Reserve Bank of India (RBI), and chief general managers of NABARD and the State Bank of India. The committee reviewed banks' performance based on the state government's "measurement index," annual credit plan (ACP), C:D ratio and implementation of various government-linked lending schemes. The committee observed that SBI alone accounts for nearly 32.4% of total deposits in Bihar, but its C:D ratio stood at only 43.63%. PNB, the second-largest bank in terms of deposits, recorded a C:D ratio of 44.57%. Bank of India's C:D ratio was 43.73%, while Central Bank of India's stood at 46.85%. Financial experts opined that if SBI alone is excluded, Bihar's C:D ratio would rise to 68.16%, and if both SBI and PNB are excluded, the ratio would increase further to 72.75%, indicating comparatively better performance by smaller banks. The high-level committee also recommended revising the annual credit plan targets. They suggested assigning banks lending targets equivalent to at least 80% of projected deposits to ensure that even if 90% of the target is achieved, the state's credit-to-deposit ratio remains near 70%. Following the review meeting, Bihar's secretary (expenditure) Rachna Patil wrote to the chairpersons, general managers and circle heads of the banks concerned on June 5, highlighting their poor lending performance in Bihar. In a letter to SBI chairman Challa Sreenivasulu Setty, Patil said SBI held deposits worth Rs.1.99 lakh crore in Bihar, accounting for 32.4% of total scheduled commercial bank deposits in the state, but had extended advances of only Rs.87,012 crore, which represented 23.48% of credit given in the state. She said the bank had been a "regular poor performer" in providing credit to the people of Bihar. She noted that while the average C:D ratio for scheduled commercial banks stood at 58.68%, SBI's ratio was only 43.63%, making it the third worst performer in the state. Officials said the Indian Overseas Bank was the worst performer, with a credit-to-deposit ratio of 42.20%, followed by IDBI at 43.47%. Patil further said State Level Bankers' Committee, which allocates annual credit plan targets, is coordinated by SBI itself. Yet, the bank failed to improve despite repeated discussions and directions issued in SLBC meetings chaired by Bihar's finance minister, her letter stated. In separate communications to the general managers and regional heads of other banks, the finance department stated that banks whose C:D ratio remains below 50% would be placed under performance monitoring for six months. It warned that if no improvement is seen thereafter, the government may consider withholding deposits from such banks....