The quarter ending March 2012 brought mixed news for the banking sector in Gujarat. The total deposits in the banks of the state crossed Rs. 3 lakh crore for the first time. But at the same time, the growth rate in deposits dipped to a five year low.
The growth for the bank for FY 11-12 stood at 17%, while since 2007-08 the growth lingered between 17.5 to 24%. Sustained inflation and high cost of living has caused the savings and deposits to fall.
However there was another good news with the entire banking sector crossing Rs. 5 lakh crore; deposits grew by 16.6% to 3,17,264 crore and advances increased by 25% to Rs. 2,26,760 crore.
"Year-on-year decline in deposit growth must be a worry. Deposit growth has a direct link with household income and if there is any decline in household income then it should a matter of concern," said Dr YK Alagh, chairman, IRMA.
The per capita deposit for the year was Rs. 52,541 compared with the Rs. 2,061, average per capita deposits during 2000-10. The deposits at the end of FY 10-11 were Rs. 2, 72,071 against Rs. 55,049 decade before. During the last 5 years deposits grew by 104% from 1.54.832 crore to Rs 3,17,264 crore.