Capturing the evolution of the financial landscape in the country over the last 50 years, Patra underlined that the patterns of financial intermediation are changing. Industry has been a major recipient of bank credit, but its share in total credit has declined from 60 per cent to 27 per cent during 1972-2022, roughly equivalent to services and retail loans.
In the retail sector, borrowing by individuals is now more than 40 per cent as compared to less than 10 per cent in 2000. It has introduced a unique phenomenon – the share of small loans – aggregating to Rs. 10 crore – overall credit has increased from 45 per cent in 2014 to 60 per cent in 2022″ Patra said in his speech at the central bank’s in-house conference on “Basic Statistical Returns”.BSR)” is one of its leading data dissemination platforms.
Another notable feature is the rise of corporate treasuries with lesser role of term lending institutions and new avenues for short-term financing to large firms. has resulted in an increase Reliance Gradual reduction in the share of banks, other than large firms, on long-term funds working capital in total debt. Banks’ asset portfolio has become longer with term loans accounting 65 percent of their total debt. “This change has brought its mark of related changes in valuation, risk management and pricing of loans,” Patra said.
The BSR is constantly being upgraded to capture structural changes in the banking system and economy and serves well as a policy guide where central bankers’ policy is increasingly data driven.
He highlighted all the areas that BSR covers which can help policy makers. now we have one commercial Bank Branch for every nine thousand citizens, a far cry from one branch per forty thousand citizens in 1972. Commercial banks maintain around 2.25 lakh customer service points including over 1.75 lakh ATMs. Co-operative banks also have a significant network of branches and ATMs. In addition, over nine lakh Fixed Point Business Correspondents (BCs) bring banking services virtually door to door. Digital banking has become a reality.
The reach and spread of banking networks has improved the mobilization of financial resources in the economy. The number of deposit accounts per thousand population has increased from 43 in 1972 to over 1,600 now. families It currently accounts for 63 per cent of the total bank deposits. This is also reflected in an increase in the ratio of bank deposits to income per capita from 15.8 per cent to 71.2 per cent and in the ratio of credit to income from 12.2 per cent to 51.3 per cent in the period 1972 to 2022. “The branches in rural, semi-urban and urban areas have contributed to this huge financial intermediation,” Patra said.