In the last two financial years, banks have had to struggle a lot to meet the increasing demand for loans. Such a situation has arisen due to the lack of large deposits with the banks. This claim has been made in a report. Credit rating related Infomerics Ratings said in a report that scheduled commercial banks (SCBs) disbursed loans worth Rs 1,64,98,006 crore in the financial year 2023-24, which is the highest outstanding loan ever. However, in percentage terms, the growth rate of loan to deposit ratio increased from 75.8 percent to 80.3 percent.

less deposits, more loans

The Reserve Bank of India's April 2024 bulletin says that the incremental credit-deposit ratio (ICDR) stood at around 95.94 per cent in March 2024. Whereas on March 8, it was 92.95 per cent. According to the report, it can be seen that even on a quarterly basis, the loan growth of scheduled banks has increased much more than the growth of deposits. During the financial year 2018-19 to FY 2023-24, the growth of banks' loans outpaced the growth of deposits. It said that alternative investments in the unorganized sector, especially in rural areas, and adequate cash base slowed down the pace of deposit collection.

People investing in the stock market

According to the report, the proportion of individual investors below the age of 30 has increased steadily. The share of youth in the registered investor base has increased from 22.6 percent in FY 2018-19 to 39.9 percent by FY 2024-25 (till July 31, 2024). This trend reflects the growing interest in equity markets among young investors. The report says that the share of investors aged 30-39 years remained relatively stable during the same period. While the share of those above 40 has decreased. On the results of this report, Rochak Bakshi, Chief Executive Officer of True North Financial Services, said that banks and the government should make joint efforts to increase the deposit ratio. He said that banks need to return to the old trend of collecting small deposits from common people instead of chasing bulk corporate deposits. He also suggested the government to think about reducing the tax on interest received on deposits.