A recent press report said that the banks are facing a fall in their business in the current fiscal. Reports released by the RBI also said that loans extended by commercial banks in the country have dropped to Rs. 37,407.0 crore during the fortnight ended April 22 to Rs 3,919,000.5 crore. Total deposits have dropped to Rs 5,319,431.5 crore.
The term deposits of the bank have gone up by Rs 36,240.9 crore while demand deposits have gone down by Rs 41,762.1 crore. This has caused the fall of investments to Rs 15,217.3 crore. The trend usually prevails in the period immediately after the year end because the banks will start returning the funds used for window dressing for shoring up their business figures. As a result, there is a fall in business figures. Reports usually call this period as slack season for credit off-take, most of the banks will be busy in either closing their accounts for the previous year or making plans for the current year. Hence, big-ticket loans or deposit mobilization are hardly ever seen during this time of the year.
The Reserve Bank has hiked its key policy rates by 50 basis points and expects banks to raise their lending rates of loans like Home Loan, Personal Loan, vehicle loan etc, which may in turn impact the credit growth.