The scope for making too many deductions is limited, especially since the figures put out for non-performing assets on a quarterly basis, and provisions made for them, are often rough estimates. Nevertheless, topline growth has been modest, showing no indications of a turnaround. Spreads continue to be under pressure, with interest rates on advances falling, while deposit rates have not moved down to the same extent. Operating expenses have risen, but that's due to the industry-wide wage hike. Some banks have posted lower operating profits, and have attempted to reduce the impact on net earnings by lower provisions. The lower spreads will continue to impact profits, but thehope is that rising volumes will make up for that. RBI data for all scheduled commercial banks show that the drop in credit usually during the slack season is much lower this fiscal than during the last year. The busy season should see topline growth pick up.

It would also not be right to read too much into the banks' Q1 results, because bank credit is a lagging, rather than a lead indicator. When a recovery occurs, companies initially draw on their inventories to push sales, and only when they are sure that demand will be sustained do they start approaching banks to finance higher inventory. But if quarterly results are to be meaningful, the same level of disclosure is necessary for quarterly figures as for annual results.