Kolkata, Oct. 30 -- NITI Aayog Vice Chairman Ashok Lahiri has urged banks to move beyond traditional lending and facilitate investments to accelerate industrial growth in Eastern India, particularly West Bengal.

Speaking at the CII 19th Banking Colloquium, themed 'Banking Beyond Credit: Powering Eastern India's Industrial Growth', in Kolkata on Friday, Lahiri said regional disparities reflected differences in investment opportunities and credit absorption.

India's Credit-to-Deposit (CD) ratio stands at around 80%, against about 360% in China. Credit-to-GDP rose from 70%-76% until 2020 to 82% in Q1 FY27. Highlighting regional variations, Lahiri said the Southern Region recorded a CD ratio of 93.6% in 2023, while the Eastern Region had the lowest at 47.5%. The Western Region stood at 82.8%, the Northern Region at 77.5%, the Central Region at 56.1% and the North-Eastern Region at 50%.

West Bengal's share of the population is higher than its share of national income, while its per capita income of around Rs 2 lakh remains below the national average. Industrial modernisation also affects productivity and credit absorption.

Lahiri identified large-scale investments, including infrastructure projects such as a deep-sea port, and expansion of large industries and MSMEs as key measures to improve the ratio. These could boost institutional credit demand, generate employment & attract further investments. Banks could connect enterprises with finance & investment opportunities, while structured credit & capacity-building programmes could help smaller businesses expand.

CII Eastern Region Deputy Chairman Rudra Chatterjee, MD of Luxmi Group & Chairman of Obeetee, stressed the need to strengthen the MSME ecosystem and help small enterprises scale up.

CII West Bengal State Council Vice Chairman Prithish Chowdhary, Deputy MD of Titagarh Rail Systems, said the State must recognise its investment potential, adding that SBI, Bandhan Bank & UCO Bank originated in West Bengal.

Citing RBI data, Chowdhary said the Western Region accounts for Rs 61.89 lakh crore in scheduled commercial bank credit, against Rs 13.61 lakh crore in the Eastern Region. He called for converting West Bengal's savings base and registered MSME presence into bankable projects.

Eastern India must leverage its strengths in natural resources, connectivity, renewable energy and manufacturing, while deepening integration with domestic & global supply chains, Bandhan Group Chairman CS Ghosh said.

CII ER Financial Services Subcommittee Chairman Bijay Murmuria called for improved capital flows to translate regional strengths into enterprise development and employment. Co-Chairman Samir Agarwal underlined banking's role in enabling investment and economic growth.

Published by HT Digital Content Services with permission from Millennium Post.