Credit Deposit Ratio falls 7.30% in Odisha in Q1

“State level bankers committee report has attributed the reason of fall in CD ratio to low growth in advance portfolio”

The credit-deposit ratio (CD ratio), the ratio that determines how much a bank lends out of the deposits it has mobilised, has declined by 7.30 per cent in the state in the first quarter of the current fiscal.

As on June end, the total number of bank branches stood at 4,687.

The ratio has declined to 71.65 per cent in the April-June period compared to 78.95 per cent logged in the same period of the previous financial year.

Contrary to 15.79 per cent growth in the deposit mobilisation by the banks, the incremental growth in advances was a meagre 5.09 per cent, resulting in a decline in the CD ratio. The state level bankers’ committee report has attributed the reason of fall in CD ratio to low growth in advance portfolio.

Deposits of the banks in the state have surged to Rs 197,461.75 crore as on June 2015 from Rs 170,527.24 crore deposits parked with the banks by the end of June, 2014, an increase of 15.8 per cent.

However, the growth in advances remained woeful despite severe reprimands from the state government at various forums. The total outstanding advances, as on June 2015, stood at Rs 141,477.35 crore.

But the CD ratio hovered above the Reserve Bank of India stipulated norm of 60 per cent.

The banks depicted a gloomy picture if the CD ratio is calculated discounting the recommendation of the Usha Thorat committee and is estimated on the basis of advances sanctioned and utilised in the state. On this scale, the CD ratio figure comes to lowly 49.68 per cent with the ratio standing at 38.47 per cent for Public Sector Banks, 66.63 per cent for private commercial banks and 58.93 per cent for regional rural banks (RRBs). The cooperative banks have fared well with a ratio of 118.48 per cent. Only three districts – Bragarh (75.89 per cent), Dhenkanal (93.36 per cent) and Boudh (60.09 per cent) out of 30 districts have recorded CD ratio of more than 60 per cent without taking into account the recommendations of Thorat committee. The CD ratio for 10 districts is below 40 per cent.