last Banks have had to struggle a lot to meet the increasing demand for loans in the last two financial years. Such a situation has arisen due to lack of large deposits with banks. This has been claimed in a report. Credit rating firm Infomerics Ratings said in a report that scheduled commercial banks (SCBs) disbursed loans worth Rs 1,64,98,006 crore in the financial year 2023-24, which is the highest outstanding loan till date. However, in percentage terms the growth rate of credit to deposits increased from 75.8 per cent to 80.3 per cent.
less deposits, more loans
The Reserve Bank of India’s April 2024 bulletin says the incremental credit-deposit ratio (ICDR) stood at around 95.94 per cent in March 2024. Whereas on March 8 it was 92.95 percent. According to the report, it can be seen that the credit of scheduled banks has increased much more than the growth of deposits even on a quarterly basis. The growth of bank credit outpaced the growth of deposits during FY 2018-19 to FY 2023-24. It said the lack of alternative investments and adequate cash base in the unorganized sector, especially in rural areas, slowed down the pace of deposit accumulation.
people investing in stock market
According to the report, the proportion of individual investors below 30 years of age has continuously increased. The share of youth in the registered investor base has increased from 22.6 percent in FY 2018-19 to 39.9 percent by FY 2024-25 (by July 31, 2024). This trend reflects the growing interest in equity markets among young investors. The report says the share of investors aged 30-39 years remained relatively stable over the same period. Whereas the share of people above 40 years of age has decreased. On the results of this report, True North Financial Services Chief Executive Officer Rochak Bakshi said that banks and the government should make joint efforts to increase the deposit ratio. He said banks need to return to the old trend of raising small deposits from the common people instead of chasing bulk corporate deposits. He also suggested the government to think about reducing the tax on interest received on deposits.
