By Michael Fisher
PANAJI: Goa is probably the only state in India where banks see the state as a milking cow, rather than focussing on trade and industries which have resulted in poor credit-deposit (C-D) ratio. Banks make their money in a lot of ways, such as moving deposit money to branches in other states, this does not affect the deposit base strength, bank sources said on conditions of anonymity.
In spite of reforms and accessibility to bank loans, there are fewer takers, bankers complain. One of the reason for the low C-D ratio is most Goans are credit shy and they pay up their loans. The three main business areas in Goa are NRI deposits, mining and tourism.
Although it is a small state with a low population, it has the country’s 26 banks which have set up a total of over 500 branches and still counting. Most of the banks survive on NRIs deposit growth.
State Level Bank Committee sources said that the C-D ratio in Goa till June 2010 was only 29 per cent, not even half of the national average of over 70 per cent. In March this year, it was 29 per cent while in same month in 2009 it was 32 per cent and in 2008 March it was 35 per cent.
Seeing Goa as a dynamic NRI market, many banks are waiting for RBI approvals to open more branches in villages as they are on a drive to ramp up the NRI (Non-resident Indian) deposit base.
They said India is among the largest recipient of foreign remittances in the world with a whopping $47.9 billion flowing in as of March 2010, and Goa attracts a major chunk after Kerala.
The Margao branch of the State Bank of India boasts a deposit of over Rs 990 crore, out of which over Rs 500 crore is NRIs accounts and the balance is of internal deposits. Till date SBI has disbursed about Rs180 crore as loans.
Bank of India said that it was unfortunate that its C-D ratio was low. In March 2010 its deposit book showed Rs 3,869 crore against Rs 3126 crore for the same period of last year. Total credit had marginally improved to Rs 1,126 in March 2010 from Rs 952 in same period of last year.
IDBI, which is adding more branches to its five, will soon install cash dispensers in super markets, and in cinema halls. Till August 31, 2010, IDBI’s total deposits stood at Rs 800 crore, an increase by Rs 120 crore from Rs 680 crore in 2009-10.
An ICICI Bank officer challenges the low C-D ratio, it is incorrect as most banks marketing officers sit out of Goa and work out the ratio. He said banks make their money in a lot of ways, such as moving deposits money to branches in states, this does not affect a bank’s deposit base strength as it is a different buckets of money.
