Bihar Government Implements Strategic Recommendations to Enhance Banking Performance

The Deputy Chief Minister and Finance Minister of Bihar, Mr. Bijendra Prasad Yadav, has endorsed the recommendations made by a high-level committee established to evaluate the performance of banks in the state. Chaired by Development Commissioner Mr. Mihir Kumar Singh, the committee has proposed a stringent five-point strategy aimed at improving banking operations. The finance department has made it clear that banks exhibiting poor performance will be closely monitored, and if no improvements are observed within the next six months, their government deposits will be completely halted.

Recommendation 1

The committee suggests that to enhance the state's Credit Deposit (CD) Ratio, a minimum target of 80% of the projected deposits for the financial year should be established. Consequently, NABARD has been requested to revise the Potential Linked Plan (PLP) for this year, which has been set at ₹3,55,532 crores. Based on this, a new Annual Credit Plan (ACP) should be requested from the State Level Bankers' Committee (SLBC).

Recommendation 2

Regarding the state's CD Ratio, the committee notes that if only the State Bank of India (SBI) deposits are excluded, the current CD Ratio stands at 68.16%. If both SBI and Punjab National Bank (PNB) are excluded, the CD Ratio rises to 72.75%. In comparison, smaller banks are performing significantly better.

In conclusion, it is crucial to assign higher ACP targets to these major banks to improve the CD Ratio.

Recommendation 3

It has been decided that various government schemes related to bank loans should be integrated with the Jan Samarth portal of the Ministry of Agriculture, Government of India, coordinated by SLBC. This integration will allow all banks to receive applications directly, facilitating monitoring and loan distribution for all government schemes. Therefore, it is recommended that Bihar also utilize the Jan Samarth portal, similar to other states.

Recommendation 4

Awareness campaigns should be conducted at the Panchayat level to upload KCC applications on the Jan Samarth portal. This will help target the increase of KCC accounts through self-help groups and the 50 lakh farmers who have already created their IDs.

Recommendation 5

The committee recommends that banks with minimal improvement in their CD Ratios, scoring below 50%, should be closely monitored. Additionally, those with ACP achievements below 60% should also be monitored to ensure they improve their performance. If no progress is made in the next six months, their deposits will be restricted. Letters will be issued from the Finance Secretary to these banks to encourage improvement. The list of 15 major banks includes:

UCO Bank,

Union Bank of India,

Central Bank of India,

Punjab National Bank,

Bank of India,

State Bank of India,

IDBI Bank,

Indian Overseas Bank,

Bandhan Bank,

Bank of Maharashtra,

Karnataka Bank,

Unity Small Fin. Bank,

Indusind Bank,

Utkash Small Fin. Bank,

Karur Vysya Bank

It is noteworthy that the Bihar government established this high-level committee to strengthen the banking system and ensure timely achievement of financial goals. This initiative was taken following the decisions made during the 95th quarterly meeting of the State Level Bankers' Committee (SLBC) held on January 22, 2026, under the chairmanship of Deputy Chief Minister Mr. Bijendra Prasad Yadav. The committee will regularly review the achievement of the Annual Credit Plan (ACP) targets and the CD Ratio within the state, while also issuing guidelines for necessary corrective measures to enhance financial progress and banking services. The structure of the committee is as follows:

Chairperson: Development Commissioner, Bihar.

Members: Additional Chief Secretary, Finance Department, Bihar.

Member: Director, Reserve Bank of India (RBI)

Member: Chief General Manager, NABARD (NABARD)

Member: Chief General Manager, State Bank of India (SBI)