New Delhi: While the four metros and big cities like Bangalore may still make up a major chunk of bank deposits, smaller cities are also contributing a significant amount to the kitty of cash-starved commercial banks.
Cities, other than Delhi, Mumbai, Kolkata, Chennai, Pune, Hyderabad and Bangalore, have contributed 54.71% of bank deposits in the third quarter of 2006-07, according to data available with the RBI.
Scheduled commercial banks (SCBs) collected over Rs12,95,000 crore from tier-II and tier-III centres alone in the third quarter of 2006-07 out of the all India mobilisation of Rs23,67,000 crore.
Bankers attribute the growth to emergence of new industries in smaller towns and higher income base. “It is not that only the big cities of Delhi and Mumbai are witnessing industrial growth, new industries are coming out in smaller towns are also adding to the same,” Punjab National Bank executive director K Raghuraman said.
The per capita income of people in smaller towns is also increasing as new industries are set up, providing them a considerable amount of disposable income, which they want to park with the banks, another Delhi-based banker said.
Absence of a suitable alternative like lack of access to the share market and higher interest rates being offered by the banks recently may be the reasons behind this change.
The top hundred centres of deposit mobilisation as per the RBI data contributed 68.2% of total deposits for the quarter ended 31 December as against 66.3% in the same quarter a year ago.