There has been a meagre accretion of Rs 632 crore to the aggregate deposits of the banking system during the fortnight ended April 24. While time deposits increased by Rs 3,412 crore, demand deposits declined by Rs 2,780 crore. In the current fiscal, aggregate deposits have grown by 1.5 per cent as against one per cent in the same period of the last financial year.
nDuring this period funds flow to the productive sectors of the economy declined by Rs 3,469 crore. While food credit increased by Rs 706 crore, non-food credit dipped by Rs 4,175 crore, bulk of it being accounted by the decline in loans, cash credit and overdrafts. A negative growth in flow of funds is characteristic at the beginning of every financial year. Funds flow from banks to productive sector had declined by Rs 2,030 crore in the corresponding period in 1997-98. However, this year funds flow has increased by Rs 1,033 crore, a growth of 0.3 per cent.
nThere has been a sharp increase in investments by banks in government and other approved securities. This portfolio has increased by Rs 12,294 crore in the current fiscal as against a rise of Rs 10,679 crore in the last financial year during the same period. During the fortnight ended April 24, investments by banks in government and other approved securities increased by Rs 6,440 crore.
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n As on April 24, the credit deposit ratio, investment deposit ratio and cash deposit ratio were 52.90, 37.71 and 9.20, respectively.
nOn the interest rate front, latest figures released by RBI reveal that corporates were issuing commercial paper during the first fortnight of April at a rate of 11.75-18 per cent. It is expected that the rates would have declined since then. The yields on treasury bills have declined.
nThere was a marginal decline in the foreign currency assets (FCA) of Reserve Bank of India (RBI) during the week ended April 30. While the value of gold held by RBI increased by $126 million, the FCA of the apex bank dipped by $two million. With the stock of special drawing right securities unchanged, the forex reserves went up by $124 million to $29,452 million, composed of $26,237 million of FCA and $3184 million of gold. During the current fiscal, by April 30, forex reserves have increased by $85 million.
nOn the fiscal front, while the government can be expected to have reduced its reliance on ways and means advances (WMA) from the Centre, the latest published figures pertain to April 24. The recourse to WMA on April 24 was Rs 8,224 crore, down from Rs 9,411 crore on April 1.