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MUMBAI: The business dynamics of banks
in India are slowly changing. When it comes to mobilising deposits, banks still
rely on bigger metros, but the growth in new loans is happening in smaller
towns. An analysis of the banking
business since 2000 shows that semi-urban areas are witnessing a kind of credit
boom. In 2003, for instance, metros recorded a deposit growth of 21%, against
only 10.7% in semi-urban areas, according to the RBI's latest quarterly
statistics. But credit growth in these pockets was
26.7%, compared with 15.3% in the metros and other urban regions. However, in absolute terms, these small towns
still account for small share in both deposits as well as credit. While smaller
cities such as Panchkula showed a loan growth of 38.5%, they recorded a deposit
growth of only 8.7%. It is similar in other cities: Nasik (19.6% vs 16.6%) and
Belgaum (24.2% vs 14.5%). It's reverse in bigger cities: Mumbai
recorded a 21.1% growth in deposits, against 4.2% growth in credit. Chennai,
too, had a higher growth in deposits at 21.1%, compared with 16.7% in credit
during the year. Ahmedabad recorded a
28.1% growth in credit, against only 10.5% in deposits. There are exceptions,
with cities like Delhi, Bangalore and Hyderabad following a business growth
pattern like smaller towns with a higher growth in loans than deposits. Interestingly, the semi-urban areas have
a smaller branch network than the urban regions and metros. As in end-December,
semi-urban areas had a branch network of 14,953, against 19,767 in urban and
metro areas. Typically semi-urban areas
have a population of a few lakhs, while urban areas have a population over a
million. |
