Deposits increased by 21.15 per cent while advances grew by 9.71 per cent

Credit-Deposit (CD) ratio of the commercial banking system in the State fell by 7.17 per cent during the calendar year 2013 from 75.89 to 68.72, indicating a big mismatch between growth in deposits and advances.

Statistics presented at the quarterly meeting of the State Level Bankers’ Committee (SLBC) here on Friday showed that the deposits with the banks increased by 21.15 per cent during the calendar year, while the advances grew by only 9.71 per cent.

The deposits grew from Rs.2,20,489 crore to Rs.2,67,133 crore, while advances increased from Rs.1,67,333 crore to Rs.1,83,583 crore.

The statistics show the mismatch in the growth of deposits and that of credit deployment has been the result of a very high volume of non-resident (NR) contributions flowing into the deposit basket of the commercial banking system. The NR deposits registered a stupendous growth of 44.05 per cent during the calendar year 2013 (from Rs.62,708 crore to Rs.90.331 crore).

Despite a modest growth of 12.06 per cent in domestic deposits (from Rs.1,57,781 crore to Rs.1,76,802 crore), the impressive growth in NR deposits boosted the total deposits by 21.15 per cent during the year.

Credit absorption capacity of the State’s economy, apparently, could not match the high volume of deposits that have come into the banking system during the year.

The steady devaluation of the India rupee against some of the foreign currencies, it appears, is making it an attractive proposition for Indians working abroad to send as much of their savings as possible to their NR accounts back home.

The value of their savings in foreign currencies is going up in terms of the Indian rupee. And Kerala has more than one-and-a-half million people working abroad.

In fact, the share of domestic deposits in the total deposit basket of the banking system in Kerala had been steadily going down since March 2011 due to high influx of NR deposits.

From the level of 76.67 per cent in March 2011, it went down to 75.47 per cent in March 2012 and to 71.11 per cent in March 2013. During the nine months from April to December 2013, the share of domestic deposits in the total deposit basket went down steeper still to touch the level of 66.19 per cent. In other words, 33.81 per cent of the total deposits in the banking system in Kerala belonged to Indians working abroad, as at the end of 2013.


  • NR deposits registered growth of 44.05 per cent

  • Share of domestic deposits in State has fallen


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