NR deposits up by 36.33% in one year

The increase, in actual terms, came to Rs.20,220 crore from the level of Rs.55,663 crore in June 2012 to Rs.75,883 crore in June this year.

The slide in the value of the Indian rupee has given a big impetus to the flow of non-resident (NR) deposits into the commercial banking system in Kerala, judging by the statistics presented at a meeting of the State Level Bankers’ Committee (SLBC) here on Friday.

The NR deposits registered a whopping growth of 36.33 per cent during the one-year period from June 30, 2012, to June 30 this year. The increase, in actual terms, came to Rs.20,220 crore from the level of Rs.55,663 crore in June 2012 to Rs.75,883 crore in June this year.

Overall growth

The overall growth in deposits during the same period came to only 14.19 per cent (by Rs.29,724 crore from the level of Rs.2,09,490 crore in June 2012, to Rs.2,39,214 crore in June this year).

In other words, a bulk portion of the deposits’ growth had come from the non-residents.

The growth in domestic deposits, in actual terms, came to only Rs.9,504 crore during the one-year period, against the growth of Rs.20,220 crore registered by NR deposits.

Deposit basket

Heavy flow of NR deposits in recent times is altering the overall composition of the deposit basket in the State’s banking system.

In fact, the trend had begun on a slow note in March 2011, when the domestic deposits accounted for 76.67 per cent of the total deposits. In June 2012, the share of domestic deposits in the total deposits was 73.43 per cent. This went down to 68.28 per cent in June this year, the decrease over the one-year period being 5.15 per cent.

Touching upon this transformation in the composition of the deposit basket, Reserve Bank of India (RBI) Regional Director Salim Gangadharan told the SLBC meeting that the commercial banks in the State now had a new challenge before them.

The CD ratio as in June this year came to 72.88 per cent, slightly above the level of 72.56 per cent recorded in June 2012, but when NR deposits boost the overall deposit basket at a fast pace, the banks would have to work harder than at present on their credit portfolio to prevent the CD ratio from falling.