Changing Profile of Household Sector Credit
and Deposits in Indian Banking System
-Deepak Mathur
November 30, 2010
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Indian Banking System
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Commercial & Co-operative banks
Commercial – 90 % of system’s assets
170 commercial banks (166 scheduled)
85, 000 branches, 45,000 ATMs
35,000 centres out of 675,000 habitats
660 mn deposit and 110 mn credit accounts
Deposits: Rs. 48 trillion
Credit : Rs. 35 trillion
Employment :1 million
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Basic Statistical Returns
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Statutory and non-statutory returns
Basic Statistical Return (BSR) system
Deposits, Credit, Employment, Investments
BSR-1: Credit (annual, branch level)
– Two parts
– Large accounts: Account level data on several
characteristics
– Small accounts-Branch level purpose-wise data
– Survey of small loan accounts
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Basic Statistical Returns
• BSR-2 Deposits (annual, branch level)
– Broad ownership, Type of deposits
– Term deposits- maturity, Interest rate
• BSR-4 (sample survey, annual, branch level)Composition and ownership pattern of deposits
– Economic sectors- Government, Private Corporate, Financial,
Household and Foreign Sectors, Detailed sub sectors
– Type of deposits-Current/Savings/Term
• Other returns: Investments, Debits to Deposit and Credit
accounts, etc.
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Basic Statistical Returns
• BSR-4 : Survey of ownership pf deposits
– Annual, Sample survey, Branch level data
– Stratified sampling-State/UT, Population
group, Bank group; Size (deposits)
– Ratio Estimator
– Type of Deposit account
– Economic Sectors
• Household sector saving estimation
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Basic Statistical Returns
• Household sector data
– Credit and Deposits
– Individuals accounts
• Males, Females
• Singly or jointly with other individuals
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– Unincorporated bodies
• Partnerships, Proprietary concerns
• Trusts, associations, clubs, etc.
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Household sector-Credit and Deposits
1991-2009
– Deposits-High growth rates
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16.2 % (1991-2009), 17.3 % 2001-09
Though lower than overall deposit growth
Largest constituent of depositor base
Share 80.5 % in 1991, 67.2 % in 2001
About 58 % in recent years
Individuals 90 % in 1991 and 80 % in 2009
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Household sector-Credit and Deposits
1991-2009
– Credit-High growth rates
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16.6 % (1991-2009), 21.5 % 2001-09
Though lower than overall credit growth
A major constituent of borrower base
Share 56.3 % in 1991, 47 % in 2006-07,
44 % in 2008 and 39 % in 2009
Number of accounts
1991: 59 mn (62 mn total)
2009: 104 mn (110 mn total)
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Household sector-Credit and Deposits
1991-2009
– Credit-Deposit Ratio
– Household sector-consistently lower
– Household sector
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1991: 43 %, 2006-07: 57-59 %, 2009: 47 %
– Total credit
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1991: 62 %, 2006-07: 70-72% %, 2009: 71 %
– Differential 13 -20 percentage points
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Household sector-Credit- Purpose
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Personal loans (Housing, Consumer durables,
vehicles, others)
All other loans- productive sectors
Share of Personal loans in total credit
Number of accounts : 1991-27 %, 2009- 65 %
Amount outstanding : 1991-13 %, 2009- 43 %
Personal loans Growth
1991-2009 : 25.5 %, 2001-09: 39.5 %
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Household sector-Credit- Purpose
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Large accounts (1996-2009)
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Agriculture : 10 %
Industry : 1996-2001: 35 %, 2006-09: 20 %
Trade : 10 %, Professionals : 10%
Housing: 1996: 6 %,2006-09: 25 %
Small accounts (2001-06)
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Agriculture : 30 %
Industry : 4 %
Personal loans : 40 %
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Household sector-Credit-Cost, Size
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Weighted average interest rate
Large accounts (1996-2009)
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Small accounts (2004-06)
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In alignment with overall rate for all sectors
No direct relationship
60 to 80 bps difference
Housing loans and Agriculture loans at lower rates
Average size of loan amount
Household sector loans average about 34 % of
all loan accounts average amount
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Household sector-Credit- Type of account
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Short term accounts: Cash credits, overdrafts
and demand loans
Long term loans : Medium term loans and long
term loans
Increase in Long term accounts
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Number : 1996 : 69 % 2009 : 77 %
Amount : 1996 : 42 % 2009 : 67 %
Personal loans – term loans
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Household sector-Deposits-Type of account
Type of account
• Demand deposits: Current and savings
deposits, Term deposits: Fixed maturity
• Term deposits : major share, though declining
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1991: 61 %, 2006 : 51 %, 2009: 58%
Individuals sub-sector similar trend
Household sector: recent years higher
proportion in CASA deposits
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Household sector-Term deposits-Maturity
Maturity of term deposits
• Data for individuals sub-sector
• Original maturity. Maturity brackets:
<1 year, 1-3 years and > 3 years.
• Two-thirds of deposits below 3 years maturity.
• Share of maturity below 1 year declined.
• Average maturity: about 2.4 years (1996-2009)
(for all sectors: Higher 1.9 years in 2009)
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Summary observations
Household sector 1991-2009
• Consistently high growth in deposits and
credit, though lower than overall
• Major share in banking system
– Deposits : 58 % (79 % of which individuals)
– Credit : 39 %
– Credit-Deposit Ratio : 47 %
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Net saver-provider of funds
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Summary observations
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Personal Loans-High and rising share
– 65 % accounts, 43 % amount
– Housing loans : 56 % of personal loans
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Industry-declining share : 20 %,
Agriculture : 10 %, Other services: 10 %
Cost of credit: Similar to all loans
Size per account : one-third of total credit
Long term loans-Increasing share
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Summary observations
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Deposits
– 44 % of current deposits with banks, 85 %
of savings deposits, 52 % of term deposits
– Decline in share of term deposits in total
deposits. Higher proportion of current and
savings deposits.
– Term deposits average maturity higher
compared to all sectors.
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Thank you !
dmathur@rbi.org.in
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