Global Investors Summit done, Uttar Pradesh turns to banks for credit line

The state has exhorted banks and financial institutions to support the investment roadmap by providing loans to the GIS projects

Virendra Singh Rawat Lucknow
Bank, money, Banks

After garnering investment proposals worth Rs 33.50 trillion at the Global Investors Summit (GIS) 2023, the Uttar Pradesh (UP) government has asked commercial banks to loosen their purse strings for private sector projects.
The state has exhorted banks and financial institutions to support the investment roadmap by providing loans to the GIS projects.

The pool of GIS projects is likely to play a major role in improving the credit deposit (CD) ratio of banks. Currently, the CD ratio of UP is nearly 53 per cent, but the Yogi Adityanath government is striving to touch 60 per cent.
“Today, the CD ratio of UP is 53 per cent compared to 46 five years back. Although it has increased, there is a need for further improvement to expand the scope of banking credit,” he said at a session on the banking sector.

UP Finance Minister Suresh Khanna said the GIS projects would not see the light of the day without the active support of the financial institutions. “The banks should provide easy loan facilities, so that the state harvests the benefits,” Khanna told the top management of leading banks.
In a report, the National Bank for Agriculture and Rural Development (Nabard) has also indicated poor access to institutional credit, lack of availability of raw materials at an appropriate cost, outdated design/skill development, and lack of common facility centres as impeding the growth of the micro, small and medium enterprises (MSME) sector.

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Meanwhile, NABARD has estimated credit infusion of Rs 1.05 trillion to the MSMEs in UP during the financial year 2023-24. This will be 9 per cent higher than Rs 97,000 crore of the credit flow projected to the sector in the current fiscal year.
2022-23 (FY22-23)
Since UP is targeting to double its merchandise exports to Rs 3 trillion by 2027, the higher credit flow to the MSMEs would bolster the sector by overcoming the working capital requirements.
The total number of MSMEs in UP is pegged at 9 million. The sector accounts for 60 per cent of the state’s industrial output, and is the second largest creator of employment - after agriculture and allied activities.

Apart from credit, UP is anchoring the MSMEs to market their products globally through popular ecommerce platforms such as Flipkart and Amazon.
Nabard has also estimated an additional credit potential of Rs 6,200 crore in UP for boosting exports in 2023-24.

First Published: Feb 20 2023 | 10:13 PM IST

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