Aggregate deposits moved up sharply by Rs 6,212 crore for the fortnight ended February 28, 1997 and correspondingly the currency in circulation fell by Rs 1,233 crore during the same period, indicating money coming back into the banking system.
The rise in deposits is against a fall of Rs 690 crore seen during the fortnight ending February 14. The fall was a reversal of consistent upward movement of deposits and an aberration, said bank heads. Incidentally, currency in circulation, during the second week of February had gone up by Rs 1,303 crore, giving rise to speculation money moving out of the banking channels, observe money market players.
Bank aggregate deposits increased to Rs 4,88,860 crore during the fortnight ending February 28 from Rs 4,82,648 crore on February 14, that is a fortnightly growth of 1.3 per cent. Further, the demand as well as time deposits have moved upwards during the period by Rs 3,780 crore and Rs 2,430 crore, suggesting a balanced liabilities portfolio growth for the banks.
With the financial year coming to a close banks are preferring to leverage their investments over lending operations. This can be seen from the fact that bank's investments registered an increase of 3.2 per cent, that is it moved up Rs 5,908 crore on February 28. However, bank commercial credit or the non-food credit crawled up by Rs 937 crore to Rs 2,67,928 crore on February 28 from Rs 2,66,991 crore on February 14 -- an increase of just 0.4 per cent.
"At present, banks are selective and cautious in sanctioning and disbursing fresh credit, nevertheless commercial credit is gradually picking up suggesting that the money has started rolling in the economy", a senior nationalised bank official said.
Bank investment in government paper jumped to Rs 1,61,224 crore on February 28 as against Rs 1,55,442 crore on February, while investment in other approved securities moved up to Rs 31, 816 crore from Rs 31,690 crore during the same period.
Furthermore, other assets in the banking system has also increased, money at call and short notice and balance with other banks increased by Rs 1,379 crore and Rs 902 crore respectively.
The Reserve Bank of India's foreign exchange assets continue to move northward due the apex bank's aggressive intervention in the forex market. This has also resulted in increasing the country's foreign exchange reserves.
The foreign currency assets increased to US$ 21.16 billion on March 21 from $20.09 on March 7. The assets stood under $20 billion levels at $19.69 on February 28 -- on the day of presentation of the Union budget. The foreign exchange reserves crossed the $24 billion mark on March 7 to touch $24.7 billion as against $23.67 billion on February 28.
Incremental ad hocT-bills, over March 31, 1996 levels, came down to Rs 1,165 crore on February 28 as against Rs 3,080 crore on February 14. This brings the total outstanding treasury bills to Rs 30,610 crore as on February 28 from Rs 32,525 crore on February 14.
