The quarter one of FY 2010-11 seems to have ended at decent heights. The fortnight ended on July 2, 2010 saw a surge in deposits as well as advances by Rs 1,15,162 crore and Rs 91,973 crore respectively.
The previous fortnight had seen a dip in deposits by Rs 23,761 crore despite a rise in loans by Rs 22,343 crore, as per statistics revealed by Reserve Bank of India.
The sudden surge in credit this fortnight has been due to hastened efforts by corporates to take short term loans at sub BPLR rates. Lending below prime lending rate has been stopped with the implementation of base rate from 1 July 2010.
The rise in deposits can be due to bank's offering higher rates for bulk deposits to prevent it from succumbing to the pressure of liquidity squeeze.
As of July 2, 2010, deposits and advances of scheduled commercial banks' stood at Rs 46,32,703 crore and Rs 34,02,390 crore respectively.