As per the records of the Reserve Bank of India (RBI) the country’s top five centers located in Greater Mumbai, Delhi, Bangalore, Kolkata and Chennai have been doing good business when the country’s banking community is making hard efforts for getting business. The top five centers have accounted for 44.5% of bank deposits and 53.6% of bank lending at the end of 2007-08.
The reason behind trapping of a bigger slice of deposits pie in this year as compared to a year ago can be the down fall of equity market since the beginnings of 2008 other than banks’ aggressive marketing strategies in top business centers.
According to an economist with a leading private bank “when equity market investors, especially online traders offloaded their holdings, the money came directly to the bank coffers. So, the top business centers have seen such automatic growth in bank deposits. Investors have also preferred bank deposits to equities or equity-linked products.”
The results of top five cities bank deposits have been quite surprising which have crossed the average annual deposits growth by several levels. Aggregate deposits have grown by 26.4% to Rs 14.36 lakh crore in the five centers collectively over Rs 11.36 lakh crore a year ago. In 2007-08 the average national deposits growth has been 24.2% over the preceding fiscal. If we see the individual reports Greater Mumbai, Delhi and Kolkata have contributed more to the trend, recording higher-than-average growth. “The significant rise in corporate salaries in bigger cities is another reason behind the higher-than-average growth,” an industry analyst pointed out.
If we compare the credit growth, the top five cities accounted for 53.6% (Rs 12.84 lakh crore) of the gross bank credit of Rs 23.95 lakh crore at the end of 2007-08. As on March 31, 2007, the share was 53.8% (Rs 10.5 lakh crore) of the gross bank credit of Rs 19.5 lakh crore. Interestingly, bank lending grew more in Bangalore (26.3%) and Kolkata (23.2%) than national average (22.8%).
At these bigger centers there is large amount of deposits and loans in comparison to the smaller centers.
As per the data of the central bank the top 100 centers in terms of deposits, have gathered 69.7% of the total bank deposits as on March 31, 2008. Similarly the top 100 centers in terms of bank loans have accounted for 77.8% of total bank credit. While in March 2007, the corresponding share of top 100 centers in aggregate deposits and gross bank credit were 68.9% and 77.4% respectively.
While, as on March 31, 2008 the number of banked centers served by scheduled commercial banks, stood at 34,426. Out of these centers, 28,529 were single-office centers and 54 centers had 100 or more bank offices.
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