The assets of the banking sector continued to grow at a faster rate than the real economy, resulting in an increase in the assets to GDP ratio to 91.8% at end-March 2008 as compared with 83.5% a year ago, said the Reserve Bank of India, on Wednesday.
However, segment-wise the balance sheets of foreign and new private sector banks expanded at a higher rate as compared with other bank groups. As a result, the combined share of foreign and new private sector bank groups in total assets of SCBs increased further to 25.6% at end-March 2008 from 24.8% at end-March 2007, it added.
The growth rates in the assets of public sector banks and old private sector banks during 2007-08 stood at 23.9% and 21.2%, respectively, were higher than those during the previous year. However, their assets grew at a lower rate than those of SCBs as a whole, it said.
Bank groups-wise analysis reveals that deposits of foreign sector banks grew at the highest rate at 26.8%. While deposits of public sector banks and new private sector banks showed a growth of 23.1%, old private sector banks? deposits increased by 19.8% during 2007-08. Though the growth in deposits of old private sector banks was significantly higher than that in the previous year, their share in aggregate deposits of SCBs declined further, albeit marginally during 2007-08. The share of foreign banks in aggregate deposits increased marginally during 2007-08, while that of public and new private sector banks remained at the previous year?s level.
Aggregate deposits of scheduled commercial banks showed a lower growth of 23.1% during 2007-08 as compared with 24.6% in the previous year. The deceleration in aggregate deposits was on account of moderation in the growth of term deposits (24.8%) as compared to that in the previous year (28.7%). Demand deposits and saving bank deposits showed a higher growth than that in the previous year.
The trend of increasing dependence of banks on certificates of deposit (CDs) continued during 2007-08. The amount of CDs outstanding increased by 58.5% to Rs 1, 47,792 crore by end-March 2008. CDs outstanding as percentage of aggregate deposits increased to 4.5% as on March 28, 2008 from 3.5% a year ago
Among the non-deposit resources, borrowings by banks increased by 22.4% during 2007-08 as compared with a growth of 19.6% in the previous year. Resources raised from the capital market through public issues, excluding offer for sale, in the domestic capital market increased sharply by Rs 30,455 crore during 2007-08 as compared with Rs 1,066 crore during 2006-07. This was mainly on account of good performance of banking scrips in the secondary market, strong financial results of banks, increased need to raise capital in the face of sharp expansion of balance sheets, ensuing implementation of Basel II norms and tightening of capital adequacy norms for sensitive sectors.