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Sunday, Sep 20, 2009
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Business Daily from THE HINDU group of publications Sunday, Sep 20, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Fixed Deposits Money & Banking - Trends Lakhpatis on the double to banks
M. V. S. Santosh Kumar BL Research Bureau It is an Indian banking industry’s version of the Forbes’ billionaires list. Indian banks carried as of March, more accounts with balances in excess of Rs 1 lakh than a year ago, an analysis of the data on Indian economy published by the Reserve Bank of India reveals. From 7.7 crore such accounts, the number has nearly doubled to 14.5 crore. In value terms, too, the amounts deposited with banks in excess of Rs 1 lakh have shown a similar increase. High-value deposits (Rs 1 lakh and above) have jumped from approximately Rs 11.80 crore as of March 2008 to Rs 14.90 crore, an increase of a little over 25 per cent in one year. That big ticket deposits have risen at a faster rate is evident from the fact that deposits on the whole have grown by only 14 per cent. The RBI study covers 80 commercial banks, 86 RRBs (regional rural banks), four local area banks and 2,137 cooperative banks. Global slowdown and concerns about corporate performance saw investors shifting to safer products such as bank fixed deposits. Indeed, the banking system has seen a gradual fall in the proportion of small-ticket deposits (less than Rs 1 lakh) and thus eligible for deposit insurance protection offered by the Deposit Insurance and Credit Guarantee Corporation (DICGC) in recent years. The ratio of such insured accounts to total deposit accounts was as high as 95 per cent in 2004-05. While DICGC fully guarantees deposits where the principal and interest amount total to less than Rs 1 lakh, for deposits above Rs 1 lakh it guarantees only up to Rs 1 lakh, leaving the rest uninsured. Customers concerned by bank failures globally also seem to be diversifying their accounts across a number of banks. More Stories on : Fixed Deposits | Trends | RBI & Other Central Banks | General Insurance
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