With the year-end fast approaching, banks seem to be making every effort to mobilise resources.
This is underscored by the fact that in the fortnight ended March 8, the banking system saw a robust accretion of Rs 1-lakh crore.
Credit growth continued to gather pace, growing by Rs 56,096 crore in the reporting fortnight ended March 8.
For the major part of the current financial year, deposit growth lagged credit growth. But the trend appears to be reversing in the run-up to the financial year-end.
Govt bonds
According to the Reserve Bank of India’s Scheduled Banks Statement, in sync with the deposit growth, banks investments in central government securities was at Rs 40,987 crore in the reporting quarter.
Banks are required to invest 23 per cent of every Rs 100 they raise as deposits in government securities.
In the reporting quarter so far, bank deposits and credit have grown by Rs 1,59,414 crore and Rs 1,88,095 crore, respectively.
“In the run-up to March-end, bankers leave no stone unturned to bulk up their balance-sheets.
“So, taking short-term deposits and giving short-term loans is the norm. This distorts the picture on deposits and credit,” said a senior public sector banker.