Looking at RBI’s report on Aggregate Deposits and Credit of Scheduled Commercial Banks, we bring to you an analysis of state-level credit and deposits for Scheduled Commercial Banks (SCBs).
The data covers each quarter, from Q4 2014 all the way till Q1 2010.
All the amounts are in Rs. Crores.
Now, it wouldn't be fair to treat each of these states as equals, and hence we split the list into Tier-1 and Tier-2 states. Basically those states that generally have larger deposits and credit are classified as Tier-1. This is done just to identify the smaller states as well, and in no means is a comprehensive or substantive classifier of sorts.
The top 6 Tier-1 states, based on Aggregate Deposits for Q4 2014 are:
We delve further behind-the-scenes to see how each of these states have fared year-on-year in terms of deposits.
Now this graphic shows us the ‘%-age’ change in aggregate deposits, as compared to the corresponding quarter of the previous year.
- As we can see, for Q4 2014, the increase in deposits from Q4 2013 have been quite similar for all the 6 states, between 16.8% and 21.0%.
- Maharashtra and Punjab have been lagging the India-wide average; however, they seem to have picked up of late.
The top 6 Tier-1 states, based on Aggregate Credit for Q4 2014 are:
Year-on-year, this is how the growth in credit advanced has been:
- Banks in Punjab showed whopping growth rates during the period Q3 2012 to Q2 2013; the rates varied between 63.7% and 88.7% (not seen above in the chart as they are massive outliers).
- Contrast that to Q4 2014, wherein they showed just a 7.6% increase in credit, as compared to Maharashtra, which had 23.7% for the latest quarter.
The top 6 Tier-2 states, based on Aggregate Deposits for Q4 2014 are:
The top-most in this list, banks in Himachal Pradesh, had Aggregate Deposits of Rs. 2,97,638 cr., which is only 1/4th that of banks in Uttar Pradesh (Rs. 11,84,628 cr.), the topper among the so-called Tier-1 states. Makes sense then, to view these states separately.
On a year-on-year basis, assessing the quarterly metrics, we see that
We can see here that:
- Uttarakhand has been seeing a consistent increase in growth rates in deposits to their banks over the last few quarters.
- The growth rates for deposits in banks in Chattisgarh has been reducing.
The top 6 Tier-2 states, based on Aggregate Credit for Q4 2014 are:
On a year-on-year basis, we observe that
- Similar to Punjab, Haryana saw a massive surge in credit advanced during the same period, Q3 2012-Q2 2013. The growth rates were between 97.0% and 108.2% for that period!
- We can also see that banks in J&K saw a growth rate of 32.3% for Q4 2014, which was much higher than the rest of the top 6, where growth rates languished between 6.7% and 14.3%.
Deposits have been increasing at a consistent rate over the last few quarters; the India-wide average growth rate for Q4 2014 was 17.1%. States like West Bengal, Uttar Pradesh, Chattisgarh and J&K have been consistently above the national average.
(The most recent number, in August 2014, is down to 13.5%)
Over a period of 4 years, surprisingly enough, Punjab and Maharashtra are 2 states with deposits growing below average. Uttarakhand and Himachal Pradesh too, significantly underwhelm in this aspect.
Credit, on the other hand, has been showing a decreasing rate of growth and the India-wide average stood at 14.0% for Q4 2014; a reduction from 16.7% for Q3. India-wide average growth, at August 22, is down to 10.94%, a five year low!
Tamil Nadu is one state that has been exceeding the average growth rates throughout the period; it currently stands at 14.6% compared to the nation-wide average of 14.0%. J&K too, apart from a few quarters in the middle, has been above the average rate for each quarter.
As we noted, Punjab showed a tremendous spurt in credit during Q3 2012 and Q2 2013, but their growth rates have been on the decline ever since. It currently stands at just 7.6%; almost half of the nation-wide average. Funnily enough, Haryana almost exactly mirrors the growth rates of Punjab; a similar spurt in credit during the exact period, while the growth rate for Q4 2014 was a lowly 6.7%.
The major concern is really that credit growth is slowing, while deposit growth is steady. While this will temper inflation (since demand is falling), it will also stymie growth. At a state wise level, we see a potential slowdown in Punjab and Haryana, as others too begin to show a downtrend.