Pranab tells LIC to open branches in 18 districts in South India

Out of the 156 districts in the seven States/Union Territories in South India, 18 do not have a branch of the Life Insurance Corporation of India (LIC). Four districts do not have branches of non-life insurance companies, said the Union Finance Minister, Mr Pranab Mukherjee, at a press conference after chairing the meet with the chief ministers of south zone States/Union Territories and heads of public sector banks (PSBs) in Bangalore on Sunday.

Mr Mukherjee said he has instructed the LIC and non-life insurance companies to ensure that all districts have at least one branch or a satellite office in these districts in the coming year.

According to him, the southern region enjoys a healthy credit-deposit (CD) ratio. Tamil Nadu, Andhra Pradesh Karnataka and Kerala have shown an impressive growth of 177.2 per cent, 114.9 per cent, 74.6 per cent and 75.9 per cent. CD ratios of Pondicherry, Andaman and Nicobar, and Lakshadweep is, however, less than the 60 per cent benchmark.

Flow of credit

The overall flow of credit to the micro and small enterprises sector, which is next only to agriculture in terms of employment generation, is satisfactory, said Mr Mukherjee.

According to him, the outstanding MSE credit from PSBs by the end of March 2011 increased by 36.3 per cent against the target of 20 per cent growth.

He added that all southern States, except Andhra Pradesh, have attained the target of 20 per cent credit to the MSE sector. Except Andhra Pradesh and Tamil Nadu, all other States have achieved the target of 50 per cent credit flow to micro enterprises within the MSE sector.

He urged the State Governments to devise suitable schemes to improve credit flow.

On financial inclusion, the Finance Minister said nearly 11,114 villages, out of the 14,612 villages allotted to the southern States for provision of banking services, have been covered by the end of October 2011, which is 76 per cent of the target.

“For achieving the balance 24 per cent, we require a bit of effort on the part of the State Governments and banks,” he said.