http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/deposits-grow-14-per-cent-farm-loans-boost-credit-offtake/articleshow/16279096.cms
Banks are seeing a modest growth in both deposits as well as credit, the latest Reserve Bank of India data shows. While aggregate deposits stood at Rs 63 lakh crore as on August 24, loans were at Rs 47 lakh crore. At these levels, the annual year-on-year growth in deposits works out to 14.12 per cent, compared with RBI's projection of 16 per cent. The annual credit growth is 16.66 per cent, almost in line with central bank's projection of 17 per cent for the current fiscal.
On an incremental basis, deposit growth is 6.3 per cent compared with 5.5 per cent a year ago, while loans have grown by 2.4 per cent compared with 2.8 per cent a year ago. At the system level, credit growth has been more or less in line with the projections of the central bank, but deposit growth has lagged this year. The credit to deposit ratio is about 73 per cent — this means out of every rs 100 raised as deposits, banks are lending Rs 73. However, on an incremental basis , the ratio works out to only 30 per cent.
The country's largest bank, State Bank of India, has slashed deposit rates by 50 to 75 basis points (one basis point is 0.01 per cent) as it is surplus in deposits. As per the new base rate system, this will give the bank room to cut lending rate as well. "As of now, we are surplus in deposits. For SBI, the challenge is more in pushing credit," said Pratip Chaudhuri, chairman, SBI, on the sidelines of a banking conference in Mumbai.
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