Kolkata: A day after the Reserve Bank of India (RBI) urged banks to bridge the gap between deposit and credit growth, two public sector banks reported subdued deposit mobilisation yet again.
Bank of Maharashtra (BoM) and Uco Bank declared sub-10% deposit growth in contrast to high teen growth in advances on a year-on-year basis at the end of the first quarter to June 30.
Whether it is Pune-headquartered BoM or Kolkata-headquartered Uco, the trend remains the same.
In the provisional business numbers shared with stock exchanges, BoM said its deposits grew 9.44% year-on-year to Rs 2.67 lakh crore with current and savings account ratio dipping to 49.86% at the end of June from 50.97% a year back. Its advances rose 19% to Rs 2.09 lakh crore leading to a spurt in credit-deposit ratio to 78.18% from 71.89%.
Uco has an almost similar story to tell with deposits growing 7.39% to Rs 2.68 lakh crore and outstanding loan portfolio expanding 17.78% to Rs 1.94 lakh crore. Its CD ratio rose to 72.5% from 65.79%.
In the financial stability report released last week, the central bank warned about high credit growth as the rate of growth in deposit mobilisation has fallen behind significantly.
The divergence in credit and deposit growth has been persisting for two to four years, RBI said.
“Despite the divergence in credit and deposit growth, elevated CD ratio and narrowing credit-GDP gap, credit growth at 16.1% as on May 31, 2024 (net of merger of Housing Development Finance Corporation with HDFC Bank) remains sustainable and within the range of 16-18% beyond which it may lead to higher impairments,’ it said in the report.
