Panaji: With the state economy slowing down, bank business in Goa appears to have taken a hit.
On Monday, local banks disclosed 11 per cent and 7 per cent decrease in deposits and advances, respectively during the quarter ended March 31, 2019, a period that is traditionally considered as ‘busy’ when business is generally considered good for all industries.
The decrease in deposits occurred, as banks faced a dearth of NRE deposits from non-resident Goans as well as lower domestic deposits from local residents. The NRE deposits were Rs 8,967.5 crore as on March 31, 2019, compared to Rs 14,352 crore as on December 31, 2018. The domestic deposits stood at Rs 63,880.5 crore as against Rs 67,565 crore as on December 31, 2018.
Banks said that the decline in deposits is a reflection of sluggish economy and an indication of lower savings by households. Residents are feeling the pinch of the mining industry closure and lack of opportunities in the state, said bankers.
The decline in advances (loans) is being attributed to poor consumption and manufacturing with key sectors such as automobiles and real estate in the grip of recession and a few new industrial units in the state. Bankers said that the demand for finance is poor in Goa.
The information on poor bank deposits and advances was disclosed at the state-level bankers’ committee meeting conducted by lead bank, State Bank of India, in a city hotel on Monday morning.
Along with slowing down of business, banks also disclosed no let-up in the non-performing assets (NPAs).
Goa is considered a deposit-rich state, as banks receive bountiful deposits from residents, who believe in savings and maintain a healthy bank balance. Further, the inflow of funds from non-residents is also robust, especially in the second half of the year.
Bankers said that the drop in deposits in the last quarter of 2018-19 is on the heels of a lacklustre year when overall deposit growth was muted. The credit-deposit ratio for the year ended March 31, 2019 was 30.5 per cent as against 31 per cent as on March 31, 2018.
With the state caught in a financial crunch, Chief Minister Pramod Sawant has sought a financial package from the Centre.
Approximately three lakh Goans are directly and indirectly dependant on mining and closure of the industry has adversely affected incomes of the people. With residents facing a money crunch, there is no surplus left for savings, according to bankers.