Banks credit-deposit ratio declines to 61.31%

With the economic slowdown impacting the demand for credit, the credit-deposit (CD) ratio of the commercial banks in Orissa declined by 4.08 percent by the end of September compared to the same period last fiscal.

It came down to 61.31 percent by September, compared to 62.65 percent by June this year. The C-D ratio of the commercial banks was 65.39 percent a year ago, which is 11.51 percent lower than the 72.82 percent achieved by September 2007, sources said.

While the deposits grew by 27.25 percent to Rs 72,290 crore during the last one year, advances grew by 19.4 percent to Rs 44,355 crore. The absolute growth in advances was Rs 7209 crore compared to a growth of Rs 15,480 crore during the last one year.

Similarly, the C-D ratio of all the banks including the co-operative banks in Orissa was 64.12 percent by September this year compared to 65.23 percent by June 2009, sources added.

However, twelve banks, both in the public and private sector, have lower than the RBI stipulated 60 per cent C-D ratio in the state.

They are IDBI Bank (30.87 percent), Corporation Bank ( 32.49 percent), Punjab and Sind Bank (15.45 percent), Syndicate Bank (34.71 percent), State Bank of Travancore ( 26.28 percent) and Vijaya Bank (19.15 percent) in the public sector and Karur Vysya Bank (18.05 percent), ING Vysya Bank (8 percent), Rajasthan Bank (13.37 percent), South Indian Bank (0.92 percent), Axis Bank (20.88 percent) and Laxmi Vilas Bank (7.91 percent) in the private sector.

The issue of the lower credit-deposit ratio of these banks figured in the recent meeting of the State Level Bankers Committee (SLBC) and they were suggested to gear up their machinery to improve the ratio.

On the other hand, the overall position of recovery of the banks improved to 59.6 percent by September this year compared to 50 percent by March 2009. So the percentage of overdue declined from 49.7 percent to 40.4 percent during this period.

The percentage of recovery in government sponsored schemes declined to 46.68 percent from 50.97 percent by March 2009. It was still lower at 18.33 percent for Pradhan Mantri Rojgar Yojana (PMRY). Since the recovery under the government sponsored schemes is very poor, the banks have been advised to organise recovery camps involving the officials at the block level.