NITI Aayog urges banks to connect businesses with financial resources to boost regional growth

NITI Aayog vice-chairman Ashok Lahiri emphasized that banking institutions must actively facilitate connections between local businesses and essential financial resources. He pointed specifically to the low credit-deposit ratio prevailing across Eastern India, which actively restricts investment flows and constrains broader economic growth. The underlying economic mechanism relies on the credit-deposit ratio as a primary indicator of how effectively local deposits are channeled into productive local loans and investments.

When banks restrict their role solely to traditional deposit-taking without aggressively funding local commerce, regional industrial development and capital formation stall compared to more liquid economic zones. Financial institutions and regional lenders must prioritize credit allocation toward infrastructure projects, industrial expansion, and micro, small, and medium enterprises. Policymakers and banking executives should track regional credit disbursement data and monitor lending targets closely.

Bottom line: improving regional credit access is foundational to accelerating industrial growth and local economic prosperity.