Banking Trends For State Of Chhattisgarh As Compared To Central States And All India Level For Credit Deposit Ratio

Banking Sector is a very important sector for the growth of any area whether that be country, region or state. The effectiveness with which various indicators of banking sector perform determines the economic health. In this article we look at trends of credit deposit ratio for Regional Rural Banks and for Scheduled Commercial Banks from 2014 to 2018. Credit deposit ratio show the rate at which deposits are utilised for issue of credit. Deposit involves costs and only a good issue rate of credit ensures that banks will earn profit. Looking at Table 1 we find that in case of Chhattisgarh State there has been a decline to the extent of 9.12% over the years and it is at very low level of 31.8 to 28.90 % for the period under study. However, when compared to Central Region States we find that these states are performing at a better rate than Chhattisgarh State and their percentage varies from 57.5% to 52.8% and the decrease in this case is only 3.83%. Further, we find that the decrease in case of All India Level is 4.26% which is greater than Central States but the utilisation rate is much higher ranging from 65.20% to 68.10%.

Thus, the efficiency is much higher at All India level, and the Central States especially Chhattisgarh have a long way to go before they can come up to All India level.

Table 2 on the other hand tells that the performance of Scheduled Commercial Banks in Chhattisgarh is much better than their Regional Rural counterparts. The utilisation rate is higher in the range of 48.7 % to 53.2%. The decline in 2018 was by 2.51%. On the other hand, in case of the percent utilisation at Central State level, the range was from 61.5% to 66.3% and there was increase in 2018 over 2014 by 7.15%. In case of All India level, we find that the percent utilisation was much higher ranging from 73.8% to 79%. Though there was a decline in 2018 over 2014 level by 2.91%, here too we find that Scheduled Commercial Banks’ performance is lagging behind their Central State’s region and All India level counterparts, though the difference is lesser. Also, the Central State’s performance deposit utilisation rate growth is better than all India growth rate, as seen in RRB’s case too, but they are still far behind in terms of overall credit deposit ratio utilisation rate.

Thus, we conclude that in terms of credit deposit ratio the performance of Scheduled Commercial Banks is better than Regional Rural Banks. Also, the performance of Chhattisgarh State is lagging much behind other Central States and All India level banks, both in case of Regional Rural Banks and Scheduled Commercial