The Hindu : CD ratio undergoes transformation

Online edition of India's National Newspaper
Sunday, Sep 28, 2003

Southern States

Southern States - Kerala

CD ratio undergoes transformation

By Our Special Correspondent

THIRUVANANTHAPURAM Sept. 27. The trend of dipping credit-deposit (CD) ratio of commercial banks, experienced in the State for the last several years, seems to be undergoing a transformation.

The year 2002-03 witnessed a definite reversal of the trend, with the CD ratio recording a quantum jump from 42.79 per cent at the beginning of the year to 45.47 per cent at the end.

According to data culled from a report of the State Level Bankers' Committee (SLBC), the advances given by the commercial banks increased by 22.41 per cent during the year. In absolute terms, the increase came to Rs. 4,944.58 crores (from Rs. 22,061.95 crores at the beginning of the year to Rs. 27,006.53 crores at the end).

The growth recorded by deposits during the period was 14.99 per cent, or, in real terms, by Rs. 7,743.57 crores. The total deposits held by the commercial banks increased from Rs. 51,655.79 crores to Rs. 59,399.36 crores in 2002-03.

The main reason why the banks are flushed with deposits in the State is the heavy flow of funds into the Non-Resident Indian (NRI) accounts. Of the total deposits of Rs. 59,399.36 crores with the banks as on March 31, 2003, a sum of Rs. 28,695.57 crores came from the NRIs.

Deposits in the NRI accounts increased by 16.96 per cent during the year. In absolute terms, the increase was by Rs. 4,161.86 crores.

The State Bank Group, which has 802 branches in the State, accounted for a substantial chunk of the deposits (Rs. 19,510.64 crores).

Together, the CD ratio of the Group is 46.33 per cent. While the State Bank of Travancore achieved a CD ratio of 48.06 per cent, the State Bank of India could touch a CD ratio of only 42.32 per cent.

Among the other public sector banks, the Canara Bank has the biggest presence in the State with 238 branches. Its deposits as on March 31, 2003 came to Rs. 6,076.27 crores, the CD ratio being 45.84 per cent.

The Punjab National Bank, after its takeover of the Nedungadi Bank last year, has 129 branches in the State with deposits worth Rs. 989.26 crores as on March 31, 2003. Its CD ratio was 66.14 per cent.

The Union Bank of India and the Syndicate Bank come next on the list with 120 branches and 118 branches respectively. The deposits held by these banks came to Rs. 2,302.97 crores and Rs. 1,612.30 crores and the CD ratios 53.54 per cent and 34.17 per cent respectively.

Together, the public sector banks other than those belonging to the State Bank Group were holding deposits worth Rs. 19,944.88 crores in the State as on March 31, 2003. Their combined CD ratio was 43.84 crores.

A significant point about the banking sector in the State is the strong presence of regional rural banks. The North Malabar Gramin Bank and the South Malabar Gramin Bank, which have 354 branches together, were holding deposits worth Rs. 1,271.06 crores on March 31, 2003.

These two banks are also very active in encouraging economic activity in the rural areas through the deployment of funds. Their combined CD ratio was 94.58 per cent on March 31, 2003.

Various private sector banks, having a total of 1,035 branches in the State, were having deposits worth Rs. 18,293.05 crores at the conclusion of 2002-03. Their combined CD ratio was 43.05 per cent.

The data given in the SLBC report also bring out the inroads three foreign banks are making in the State.

The Stanchart Grindlays, the HSBC and the Oman International Bank, have already collected deposits worth Rs. 379.73 crores in the State. Their combined CD ratio is 37.97 per cent.

Printer friendly page
Send this article to Friends by E-Mail

Southern States

News Update

Stories in this Section

Disciplinary panel decision a relief to Antony

Final decision on fees on Oct. 1: CM

Rekindle ethos of tolerance: Shekhawat

Home nurses need to be protected: NCW chief

CD ratio undergoes transformation