CD ratio of banks in Punjab declines 2.1%

The overall credit deposit ratio (CD) of commercial banks in Punjab witnessed a decline of 2.1 per cent from 71.5 per cent as on September 2008 to 69.4 per cent as on September 2009. The fall suggests there has been decline in credit offtakes. The CD ratio of urban areas has witnessed a decline of 9.93 per cent, while the CD ratio of rural areas registered a decline of 1.51 per cent. However, the CD ratio of semi-urban areas witnessed an increase of 5.61 per cents.

The proportion of loans generated by banks from the deposits received is known as credit deposit ratio.

It is worth mentioning that there is statutory requirement to maintain CD ratio of 60 per cent. According to State Level Banker’s committee (SLBC) data, CD ratio in rural areas as on September 2008 was 50.52 per cent. It plunged to 49.01 per cent during September 2009, witnessing a decline of 1.51 per cent. The total deposits in rural areas as on September 2009 was Rs 29,247 crore while advances were Rs 14,334 crore.