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Vinson Kurian

THIRUVANANTHAPURAM, Oct. 28

GETTING the non-resident Keralites (NRKs) to meaningfully invest their sizeable deposits with the banks home can help raise the State's credit-deposit (C-D) ratio, a vexatious issue that has seen successive Governments and nationalised banks locking horns over.

According to Mr G. Umesh Shenoy, General Manager (Kerala Circle), Canara Bank, and convenor of the State-Level Bankers' Committee (SLBC), if the NRIs can be brought around to investing their money in viable projects, it will help in two ways.

Firstly, NRI money lying idle in the banks can be put to good use.

These monies are parked with banks in savings or term accounts simply because there are no avenues for investing.

Secondly, assuming that they identify a viable project to invest, it is possible for banks to raise matching funds.

This will lead to a situation where deposits will come down and advances look up, taking the C-D ratio along with it, Mr Shenoy told Business Line.

On whether he expected the impending Global Investors' Meet (GIM) to throw up viable proposals, Mr Shenoy said, "Yes. The situation could definitely change if the Government initiates some efforts in that direction."

However, he was apprehensive about tourism projects especially since the State had to contend with imponderables of its own making, such as bandhs and hartals.

"Tourists will definitely find it very awkward to be greeted with bandhs and get themselves stranded. Bandhs in Kerala are 100 per cent successful unlike in most other places. And they are becoming increasingly frequent these days.''

On whether banks had been given C-D ratio targets by the previous Government, he said that some promises were also made by the latter in respect of implementation of a slew of projects. A "congenial atmosphere" was also sought to be created for attracting more such investments. "But, unless project proposals are concretised, banks cannot be expected to dole out money. Banks do not advance money merely for the sake of raising C-D ratio. We have a responsibility for ensuring timely recoveries too," he said.

"Keeping that in mind, we can advance money only for proposals that are bankable and which are able to generate sufficient profit to repay.''

Asked if he would look at the Cochin International Airport Ltd (CIAL) as a possible target for investment, Mr Shenoy said that proposals of such nature are under the bank's consideration.

However, a problem with large companies, such as Kochi Refineries Ltd (KRL), is that they are able to raise money on their own from the market at attractive terms through commercial papers and other instruments, he said.

"They are either cash-rich or raising their own funds. Bank intermediation is not always required. This is another reason why bank borrowing is coming down in the State.''

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