With overall credit deposit (CD) ratio of banks in Punjab dropping for the period ending June 2014, the rural sector in the state has recorded the "lowest" ratio in comparison to that of in urban and semi-urban sectors.
As per the State Level Bankers’ Committee (Punjab) report, bank’s CD ratio in Punjab’s rural sector dropped to 60.76 per cent as on June 2014 from 63.21 per cent in corresponding period of last year. CD ratio denotes how much a bank lends out of the deposits it has mobilized. Its low ratio indicates banks are not making full use of their resources for banking activity.
CD ratio in semi urban and urban areas stood at 64.66 per cent and 94.83 per cent. The ratio, which is a key parameter to assess bank’s fiscal health, declined in semi-urban and urban areas by 1.47 per cent and 7.61 per cent respectively.
Among four districts, CD ratio (including NRI deposits) in Jalandhar and Hoshiarpur declined by 0.66 per cent and 0.61 per cent to 32 and 30.43 per cent respectively. Kapurthala and Nawanshahr’s CD ratio was 34.29 and 36.40 per cent.
The CD ratio of Jalandhar, Hoshiarpur, Kapurthala and Nawanshahr districts have been monitored since 2006 as per recommendations of expert group by Government of India, as these districts had below 40 per cent CD ratio in year 2005.