Tag: deposit growth

Deposit growth in alternative fortnights a contrarian trend: SBI Ecowrap

Banking & Finance

[ad_1]

Read More/Less


The abrupt increase and subsequent slump in deposits of all scheduled commercial banks (ASCBs) in the fortnight ended November 5, and the preceding fortnight ended November 19, respectively, are contrarian trends, according to the State Bank of India’s economic research report, Ecowrap.

“While it may be exactly difficult to decipher the increase and subsequent decline, it does pose questions on liquidity management, financial stability, or a shift in behavioural trend in customer payment habits through digitisation and hence, lower currency leakage and concomitant deposit bulge or both,” said Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI.

Also see: NBFC NPAs could increase by a third due to tightening of norms: Ind-Ra

Referring to an increase of ₹3.3-lakh crore in deposits in the fortnight ended November 5, Ghosh observed that this has never happened during a Diwali week as there is always a currency leakage and concomitant deposit decline. This is also the fifth largest increase in any fortnight in the last 24 years, he added.

Looking back

The report noted that such huge incremental addition has happened only a few times, with higher deposits accretion (than the current year’s fortnight) occurring during the fortnight ended November 25, 2016 (₹4.16-lakh crore), September 30, 2016 (₹3.55-lakh crore), March 29, 2019 ( ₹3.46-lakh crore), and April 1, 2016 (₹3.41-lakh crore).

However, the increase in November 2016 was because of demonetisation and the March and April fortnightly increases could be attributed to seasonal year-end bulge. In this respect, the current deposit bulge requires a detailed explanation, Ghosh said.

Deposit build-up and market rally

Referring to ₹2.70-lakh crore slump in deposits during the fortnight ended November 19, 2021, Ghosh believes that it is possible there was a large influx of deposits into the banking system for the fortnight ended November 5, 2021, in anticipation of a buildup in stock market rally post primary issuances of new age companies and others.

Also see: FIDC seeks relaxation on IRACP norms

However, when such rally did not materialise, the bulge in banking deposits slumped and almost 80 per cent of the deposit bulge was withdrawn.

Ghosh said interestingly, the amount of money parked in fixed reverse repo window jumped from ₹0.45-lakh crore on October 19 this year to ₹2.4-lakh crore on November 17, and has remained at such level till December 1. However, the significant jump in digital transactions has also resulted in lower usage of cash in current fiscal, and ideally could also have resulted in a surge in deposits for the Diwali week.

Growth in deposits

The report said though the deposits growth remained the same in Q2 (2.6 per cent) as compared to Q1 (2.5 per cent), sequentially at all-India level, apart from Metro regions, it has decelerated quarter over quarter (q-o-q), particularly in rural areas, indicating the current economic recovery is mostly urban-led and rural economy is still recouping.

Meanwhile, the ASCB’s credit has increased by ₹1.18-lakh crore (7.1 per cent y-o-y) during the fortnight ended November 5, which may be due to festive demands.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Bank credit may catch up to deposit growth

Banking & Finance

[ad_1]

Read More/Less


Bank credit seems to be catching up to deposit growth, going by the Reserve Bank of India’s data.

The advances of all scheduled banks increased by ₹31,692 crore in the fortnight ended July 30. Deposits during the reporting fortnight were up ₹33,886 crore.

With the increase in advances, banks’ outstanding investment in central and state government securities came down by ₹13,514 crore, as per RBI’s “Scheduled Banks’ Statement of Position in India”.

The advances portfolio of all scheduled banks declined by ₹49,490 crore in the previous fortnight ended July 16, 2021. However, deposits swelled by ₹63,398 crore.

Vidya Shankar, Principal Director (Ratings), and Hemant Sagare, Senior Manager (Ratings), Brickwork Ratings (BWR), observed in a report that the measures of the Government and RBI have always been proactive in enhancing credit growth to support the business cycle across segments.

“While advances to the industry continue to grow slowly, measures including vaccination and the unlocking of services will surely assist in its revival, with supportive measures from the regulator for this segment as well.

“The business community also seems to be better prepared to accept the pandemic and resume their business activities under the ongoing pandemic scenario,” the authors said.

Considering the existing asset quality levels, a likely increase is expected over the medium term. However, BWR is of the view that maintaining healthy capitalisation levels shall assist the appetite of banks for enhancing their credit risk.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , ,

Bank of Maharashtra tops PSU banks in terms of loan, deposit growth

Banking & Finance

[ad_1]

Read More/Less


State-owned Bank of Maharashtra (BoM) has emerged as the top performer among public sector lenders in terms of loan and deposit growth during financial year 2020-21.

The lender recorded 13.45 per cent increase in gross advances at ₹1.07 lakh crore in 2020-21, as per the published data of BoM.

It was followed by Punjab & Sind Bank which posted 8.39 per cent growth in advances with aggregate loans at ₹67,811 crore at the end of March 2021.

When it came to deposit mobilisation, BoM with nearly 16 per cent growth was ahead of even the country’s largest lender State Bank of India, which recorded 13.56 per cent rise.

However, in absolute terms SBI’s deposit base was 21 times higher at ₹36.81 lakh crore as against ₹1.74 lakh crore of BoM.

Current Account Savings Account (CASA) for BoM saw 24.47 per cent rise, the highest among the public sector lenders, during the year.

As a result, CASA was 54 per cent or ₹93,945 crore of the total liability of the bank.

According to the announced quarterly numbers, Central Bank of India achieved second spot by recording 11.46 per cent growth in CASA at ₹1.61 lakh crore.

Total business of BoM increased 14.98 per cent to ₹2.81 lakh crore.

For the full year 2020-21, BoM’s standalone net profit jumped nearly 42 per cent to ₹550.25 crore. In the previous year, the profit was ₹388.58 crore.

The bank’s asset quality improved significantly as the gross bad loans or gross Non-Performing Assets (NPAs) dipped to 7.23 per cent of gross advances by the end of March 2021 as against 12.81 per cent by the same period of 2020.

In absolute terms, gross bad loans stood at ₹7,779.68 crore at the end of March 2021, lower than ₹12,152.15 crore recorded in the year-ago period.

Net NPAs came down to 2.48 per cent (₹2,544.32 crore) from 4.77 per cent (₹4,145.38 crore).

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Bank credit growth declines to 5.6 per cent in March

Banking & Finance

[ad_1]

Read More/Less


Bank credit growth decelerated to 5.6 per cent in March 2021 from 6.4 per cent a year ago, the Reserve Bank said on Friday.

On the other hand, aggregate deposits growth accelerated to 12.3 per cent in March 2021 from 9.5 per cent in the same month of the previous year.

Lower growth in credit vis-a-vis deposits led to decline in the all-India credit-deposit (C-D) ratio to 71.5 per cent in March 2021 from 76 per cent a year ago.

Bank credit grows 5.33%; deposits rise 10.94%

Combined credit by bank branches in top six centres (Greater Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata) declined marginally during 2020-21. These six centres together accounted for over 46 per cent of total bank credit.

“Bank branches in urban, semi-urban and rural areas, on the other hand, recorded 9.4 per cent, 14.3 per cent and 14.5 per cent credit growth, respectively, during the year,” the RBI said while releasing the ‘Quarterly Statistics on Deposits and Credit of SCBs: March 2021’.

Public sector and private sector banks recorded 3.6 per cent and 9.1 per cent credit growth, respectively, whereas lending by foreign banks declined during 2020-21.

Metropolitan branches, which account for over half of total deposits, recorded nearly 15 per cent growth during 2020-21.

The share of current account and savings account (CASA) deposits in total deposits increased to 44.1 per cent in March 2021 from 42.1 per cent a year ago.

“The share of private sector banks in total deposits and credit by SCBs (Scheduled Commercial Banks) increased during 2020-21 at the cost of public sector banks,” it said.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

CARE report, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


The rise in retail loans and a slight uptick in corporate borrowings pushed up the bank credit growth marginally during the fortnight ending December 18, though the deposit growth remained flat, CARE Ratings said in a report.

However, as compared to the year-ago period, the credit growth remained low, reflecting subdued demand and risk aversion in the banking system — especially towards the corporate segment. The credit growth on a year-to-year basis worked out to be 7.1 per cent.

The bank credit growth during the reporting fortnight ending December 18, 2020, is being supported by disbursements under the Emergency Credit Line Guarantee Scheme (ECLGS), which has been extended further till March 31, 2020, as per the CARE report.

“The bank credit growth increased marginally compared to last fortnight which can be ascribed to an increase in retail loans along with a marginal uptick in corporate loans,” the report said.

Deposit growth remained flat at 11.3 per cent (as of December 18, 2020) compared to the previous fortnight and increased on a year-on-year basis (10.1 per cent as of December 20, 2019), it added.

“Whereas, in value terms, the bank deposits have declined compared with previous fortnight (decreased by around Rs 1 lakh crore). This similar trend has been observed in the last few years wherein deposits (value) declined during the last fortnight of December,” the report said.

Moreover, as on December 18, 2020, the liquidity surplus in the banking system stood at Rs 4.6 lakh crore. The liquidity surplus can be ascribed to deposit growth outpacing credit growth persistently, CARE Ratings said.

The report further said the credit to deposit (CD) ratio increased marginally over the preceding fortnight but remained low against March 2020 and last year’s level, owing to slower growth in credit.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,