Commercial banks are facing a new dilemma.
In a trend reversal, banks are facing a peculiar situation of falling deposit growth and soaring credit off take.
As per Reserve Bank of India (RBI) figures, the growth in aggregate deposits of commercial banks came down Rs 93,086 crore to Rs 15,97,502 during April-September 24, 2004 period as against a growth of Rs 1,19,229 crore in the same period of last year.
This is a fall of Rs 26,143 crore in deposits in the last six months.
‘‘The fall in deposit growth is not surprising. I won’t be surprised if money is flowing from banks to stock markets. The sharp rally in stock markets has prompted many people to pull out funds from even fixed deposits and invest in stocks,’’ said a senior BSE broker who preferred anonymity.
Banking sources also don’t rule out the possibility of money going to money market instruments.
