Composition and Ownership Pattern of Deposits with Scheduled Commercial Banks: March 2009*

This article presents an analysis of composition and ownership pattern of outstanding deposits with Scheduled Commercial Banks (including Regional Rural Banks) as at the end of March 2009. The data on ownership of deposits are collected from a sample of branches of Scheduled Commercial Banks, under the reporting system of the annual Basic Statistical Return (BSR)-4. The BSR-4 return captures data on outstanding deposits as on March 31, according to type of deposits accounts (viz., Current, Savings and Term deposits) classified by broad institutional sectors, (viz., ‘Household’, ‘Government’, ‘Private Corporate (Non-Financial)’, ‘Financial’ and ‘Foreign’ sectors) of the economy. The ownership pattern of estimated deposits is analysed according to the Population groups, States/Union Territories and Bank groups. The article also provides comparative position of composition and ownership pattern of bank deposits in March 2008.

The major highlights are:

• Current, savings and term deposits accounted for 12.0 per cent, 23.3 per cent and 64.7 per cent, respectively, of the total deposits reported by the banks in March 2009. The share of current deposits in total deposits, as on March 31, 2009 registered 1.5 percentage points decline over the position a year ago. While the share of savings deposits remained by and large the same in both the years, for term deposits it increased by 1.9 percentage points.

• ‘Household’ sector with 58.3 per cent share in total deposits, was the largest holder of outstanding deposits as on March 31, 2009; its share was 58.1 per cent a year ago. By end-March 2009, the share of ‘Private Corporate (Non- Financial)’ in total deposits recorded a rise, while ‘Financial’ and ‘Foreign’ sectors depicted a decline, compared to the previous year.

• Term deposits contributed 73.5 per cent to incremental deposits during 2008-09 (63.1 per cent during 2007-08), while current deposits accounted for a reduced accretion at 5.2 per cent (18.3 per cent in 2007-08).

• The share of current deposits in total deposits recorded an increase in case of ‘Private Corporate (Non-Financial)’ and ‘Household’ sectors while it registered a decline in case of ‘Financial ‘ sector. On the other hand, the relative share of term deposits in total deposits increased in the case of ‘Private Corporate (Non-Financial)’ and ‘Household’ sectors, and declined in the case of ‘Government’, ‘ Financial’ and ‘Foreign’ sectors.

• The share of term deposits in total deposits of metropolitan areas stood at 72.4 per cent as on March 31, 2009 which was higher compared to 69.8 per cent in the preceding year. Saving deposits accounted for 43.5 per cent and 39.8 per cent share in total deposits of rural and semiurban areas, while their share remained unchanged at 14.8 per cent in metropolitan areas.

Introduction

The sample survey on composition and ownership pattern of bank deposits with Scheduled Commercial Banks (SCBs), including Regional Rural Banks (RRBs), is conducted by the Reserve Bank of India under the system of Basic Statistical Returns (BSR) through the BSR-4 return on an annual basis and the results are published in the Reserve Bank of India Bulletin. The results of the survey as on March 31, 2009 are discussed in this article. The survey schedule was designed to capture branch-level data on ownership of deposits, classified according to broad institutional sectors and sub-sectors for each type of deposit, viz., current, savings and term, including interbank deposits. Out of 79,056 branches of SCBs as on March 31, 2009 a sample of 16,055 branches was selected as per the sampling design explained below. Of the 16,055 bank branches selected, valid filled-in schedules were received from 15,521 branches resulting in a response rate of 96.7 per cent.

Stratified sampling design was used for selection of branches of banks for this survey. The branch-wise data on outstanding aggregate deposits as on March 31, 2009 based on quarterly BSR-7 return, formed the base for construction of the frame. All the branches of the SCBs in the country were first stratified into basic strata based on State/Union Territory, population group of the centre where bank branch was located, and bank group. The population groups are (i) rural, (ii) semiurban, (iii) urban and (iv) metropolitan. Five bank groups, viz., (i) State Bank of India and its Associates; (ii) Nationalised Banks; (iii) Regional Rural Banks, (iv) Other Indian Scheduled Commercial Banks or Indian Private Sector Banks and (v) Foreign Banks, were considered for the purpose. Thereafter, each stratum was sub-stratified into 3 size classes of deposits (up to `25 crore, `25 crore to `100 crore and `100 crore and above). Thus, 1,083 ultimate strata were formed. All the branches having deposits of `100 crore and above were included in the sample. A sample of 15 per cent branches was selected from each of the ‘`25 crore to `100 crore’ strata, using Simple Random Sampling (SRS) technique. Similarly, 10 per cent of the branches were selected from ‘up to `25 crore’ strata. The minimum sample size for each stratum was fixed as 5 and if a stratum had fewer than 5 branches, then all the branches of such stratum were included in the sample. Accordingly, the selected sample consisted of 16,055 branches of 171 SCBs (Including Regional Rural Banks).

Results ^#

The article presents the results of the survey encompassing various classificatory characteristics of deposits with Scheduled Commercial Banks. Section I presents a brief review of the trends and pattern of ownership of deposits over long period from March 2000 to March 2009. Detailed analysis of the results relating to the survey as on March 31, 2009 is provided in subsequent sections. Section II outlines, at the aggregate level, the composition by type of deposit account and ownership pattern of deposits by broad institutional sectors. Section III analyses ownership pattern of deposits by type of account and institutional sectors. Section IV discusses ownership pattern of deposits according to population groups and States/ Union territories, as also for major metropolitan centres. Section V covers ownership pattern according to bank-groups, viz., State Bank of India (SBI) and its Associates, Nationalised Banks, Regional Rural Banks (RRBs), Foreign Banks and Other Scheduled Commercial Banks or Indian Private Sector Banks (OSCBs). Three categories of deposit accounts covered in the survey are current, savings and term deposits and are inclusive of inter-bank deposits. The broad sectors covered in the survey are ‘Household’, ‘Government’, ‘Private Corporate (Non-Financial)’, ‘Financial’ and ‘Foreign’ sectors.

I. Trends in Composition and Ownership Pattern of Deposits

Chart 1 presents shares of different types of deposits, viz., current, savings and term deposits over the 10 year period 2000-2009. During the period, the share of term deposits in total deposits varied in the 60.4 per cent to 64.7 per cent range while that of savings deposits ranged between 23.3 per cent and 26.4 per cent.

The trend in ownership pattern of deposits, according to major sectors is depicted in Chart 2. The household sector remained the largest holder of bank deposits, though its share showed a steady decline over the recent years; its share which was about two-thirds of total deposit during 2000-2003, declined thereafter and is around 58 per cent during 2006-2009. The share of ‘Private Corporate (Non-financial)’ sector has steadily increased over the years and stood at 14.5 per cent in 2009. The shares of ‘Government’ and ‘Financial’ sectors in total deposits also witnessed an increase during 2004-2009 compared to the position during 2000-2003. On the other hand, the share of ‘Foreign’ sector continues to record a decline.

II. Ownership Pattern of Deposits: Aggregate Level

II.1 Composition of Deposits by Type of Account

The composition of aggregate deposits by type of account, viz., current, savings and term deposits during 2008-09, indicated decline in the share of current deposits by 1.5 percentage points and an increase by 1.9 percentage points in the share of term deposits (Chart 3). The current deposits and saving deposits accounted for 12.0 per cent and 23.3 per cent of total deposits as on March 31, 2009. Term deposits accounted for 64.7 per cent of total deposits in March 2009.

The total outstanding deposits with SCBs, including inter-bank deposits, as on March 31, 2009 at `40,39,695 crore recorded 21.7 per cent increase over the outstanding deposits (`33,18,641 crore), as on March 31, 2008 (Statement 1); the growth rate for the previous year (March 31, 2008) was higher at 22.9 per cent. During the year 2008-09, growth in current deposits at 8.3 per cent was substantially lower than the previous year’s growth (33.8 per cent). On the other hand, growth in savings and term deposits increased to 19.6 per cent from 17.1 per cent and to 25.4 per cent from 23.0 per cent, respectively (Table 1).

II.2 Ownership Pattern by Institutional Sectors

The classification of bank deposits by institutional sectors as on March 31, 2008 and 2009 is presented in Statement 1. The ‘Government’ sector deposits constituted 14.0 per cent of total deposits with SCBs in March 2009, which was 0.5 percentage point higher than that in the previous year (13.5 per cent). During 2008-09, the ‘Private Corporate (Non-Financial)’ sector recorded an increase in its share in total deposits to 14.5 per cent from 13.0 per cent while the share of ‘Financial’ sector declined to 8.9 per cent from 10.3 per cent. The share of ‘Household’ sector, the largest shareholder of the deposits with the SCBs increased to 58.3 per cent as on March 31, 2009 from 58.1 per cent in 2008 (Chart 4). The share of deposits of ‘Foreign’ sector as at end-March 2009 stood at 4.3 per cent, compared to 5.1 per cent a year ago.

III. Ownership Pattern by Type of Deposit Accounts and Institutional Sectors

The ownership pattern according to major sectors and type of deposits as on March 31, 2008 and 2009 is depicted in Charts 5A and 5B. The ‘Household’ sector, which was the largest holder of total deposits outstanding with SCBs, also held the largest share across the three types of deposits, viz., Current, Savings and Term deposits. As regards current deposits, the share of ‘Household’ sector in total current deposits increased to 43.7 per cent in March 2009 from 40.7 per cent a year ago. During 2008-09, the share of ‘Financial’ sector in total current deposits declined to 9.1 per cent as on March 31, 2009 from 16.3 per cent a year ago. The shares of ‘Government’ and ‘Private Corporate (Non-financial)’ sectors improved by about 2.7 percentage points each during the period. The share of ‘Foreign’ sector deposits in current deposits declined to 2.1 per cent as on March 31, 2009 from 3.4 per cent a year ago.

‘Household’ sector accounted for the bulk of saving deposits in March 2009 with the largest share of 83.6 per cent, which was, however, lower than the share of 85.4 per cent in March 2008. The share of ‘Government’ sector in savings deposits improved by 1.1 percentage points during 2008-09 and stood at 9.1 per cent as on March 31, 2009. The ‘Private Corporate (Non-financial)’ and ‘Financial’ sectors had negligible shares in savings deposits both in 2008 and 2009, while the ‘Foreign’ sector accounted for 6.0 per cent of savings deposits.

As regards term deposits, share of the largest constituent, viz., the ‘Household’ sector increased marginally to 51.9 per cent from 51.5 per cent a year ago. The share of ‘Private Corporate (Non-Financial)’ sector in term deposits improved by 2.0 percentage points to 17.2 per cent during the year under review. The ‘Financial’ and ‘Foreign’ sectors registered about one percentage point decline in their shares in term deposits during 2008-09, and held 11.7 per cent and 4.1 per cent shares, respectively, while that of the ‘Government’ sector remained almost unchanged (15.1 per cent in March 2009).

The percentage shares of the deposits in incremental deposits of the major sectors are presented in Table 2. During 2008-09, about three-fourth (73.5 per cent) of the incremental deposits were contributed by term deposits, as compared to 63.1 per cent in 2007- 08. The share of current deposits in incremental deposits at 5.2 per cent in 2008-09 was much lower than that observed in the previous year (18.3 per cent), while the share of savings deposits in incremental deposits (21.3 per cent) was higher as compared to that in 2007-08.

Term deposits accounted for 66.1 per cent of incremental deposits during 2008-09 in the case of ‘Household’ sector and in the case of ‘Government’ and ‘Private Corporate (Non-Financial)’ sectors their share was 64.0 per cent and 85.7 per cent, respectively.

During the year in the case of ‘Financial’ sector, while term deposits witnessed 15.2 per cent increase, the current deposits declined by 39.5 per cent. In the case of ‘Foreign’ sector also current deposits registered a decline (32.3 per cent), and the incremental deposits of this sector during 2008-09 were in the form of saving deposits.

IV. Ownership Pattern of Deposits According to Population Groups/ States and Union Territories/ Metropolitan Centres

IV.1 Population Groups¹

The ownership of deposits classified by population groups is presented in Statement 2. The metropolitan centres accounted for the largest share (56.5 per cent) in total deposits as on March 31, 2009, compared to 57.3 per cent share as at end-March 2008. The share of deposits of rural centres (7.8 per cent) in March 2009 was also lower than that in March 2008 (9.1 per cent). The semi-urban and urban centres recorded an increase in the share of deposits to 13.6 per cent from 13.0 per cent and to 22.1 per cent from 20.6 per cent, respectively, during the period.

The ‘Household’ sector accounted for the largest share in total deposits in each of the population groups. The share of ‘Household sector’ was 86.0 per cent in rural areas, 77.1 per cent in semi-urban areas, 67.4 per cent in urban areas and 46.4 per cent in metropolitan areas as on March 31, 2009 (Statement 2). ‘Individuals (including Hindu Undivided Families-HUFs)’ were the major constituent of the ‘Household’ sector in all the population groups. This sub-group accounted for about 86.0 per cent of deposits of ‘Household’ sector in rural and semi-urban centres, while their share was lower at 75.4 per cent in metropolitan areas. Among the ‘Individuals (including HUFs)’, farmers accounted for 30.0 per cent of deposits in rural areas, while their share was 6.0 per cent and 2.7 per cent in Urban and Metropolitan areas, respectively. Farmers’ share in deposits of ‘Individuals’ in semi-urban areas was 15.4 per cent. Wage and Salary-earners accounted for 17.7 per cent of deposits of individuals in Metropolitan centres, while their share was relatively lower in 13.1 per cent-14.4 per cent range in other population groups. ‘Businessmen’, ‘Traders’, ‘Professionals and Selfemployed’ persons held 13.2 per cent-14.0 per cent of deposits owned by ‘Individuals’ in all population groups, except urban areas where their share was marginally higher at 15.6 per cent.

Deposits from the ‘Government’ sector constituted 8.2 per cent and 10.7 per cent of the total deposits in rural and semi-urban areas, respectively, as on March 31, 2009. The share of deposits held by the ‘Government’ sector in the urban and metropolitan areas, stood higher at 14.9 per cent and 15.2 per cent of total deposits, respectively. The ‘Private Corporate (Non-Financial)’ and ‘Financial’ sectors together accounted for less than 5.5 per cent of rural and semiurban centres’ deposits, while their combined share was higher at 13.2 per cent and 34.6 per cent in Urban and Metropolitan centres.

The share of ‘Foreign’ sector deposits, comprising deposits of non-residents and foreign embassies, etc., in total deposits, across population groups, was the highest in semi-urban areas (6.8 per cent), followed by urban areas (4.6 per cent), metropolitan areas (3.8 per cent) and rural areas (3.1 per cent). Deposits from ‘Non- Residents’ was the major constituent of ‘Foreign’ sector deposits and maintained same order among population groups as for the total ‘Foreign’ sector deposits. Distributional pattern of total deposits by their type and population groups, as on March 31, 2009 remained similar to that a year ago, with metropolitan centres accounting for the highest share and rural centres accounting for the lowest share in all types of deposits (Chart 7). In respect of current deposits, the metropolitan centres accounted for a share at 60.1 per cent, while the shares of urban and semi-urban centres were lower at 24.0 per cent and 11.6 per cent, respectively. Metropolitan centres recorded a decline in their share in current deposits during 2008-09, from 65.2 per cent to 60.1 per cent, while all other population groups registered an increase. Metropolitan centres held a share of 36.0 per cent in savings deposits in 2009. The shares in savings deposits of urban, semiurban and rural centres were 26.2 per cent, 23.2 per cent and 14.6 per cent, respectively, in March 2009. In the case of term deposits, metropolitan centres held the highest share of 63.2 per cent, followed distantly by urban (20.2 per cent), semi-urban (10.5 per cent) and rural (6.0 per cent) centres.

The distribution of deposits according to type and population groups indicated that across all population groups, term deposits accounted for the largest share in total deposits in March 2009 with 72.4 per cent share in metropolitan centres, and between 49.9 per cent and 59.3 per cent in other centres (Chart 8). The share of current deposits as at end-March 2009 declined across all population groups, except for the rural population group. The share of savings deposits in March 2009 was observed to be lower than that a year ago across all population groups except metropolitan population group where it remained at 14.8 per cent. The share was the highest at 43.5 per cent in rural centres, followed by 39.8 per cent in semi-urban centres. In metropolitan centres, the share of term deposits increased to 72.4 per cent from 69.8 per cent, a year ago. In Urban centres, it increased to 59.3 per cent from 57.5 per cent. In rural centres, the share of term deposits witnessed a 0.6 percentage point increase and stood at 49.9 per cent in March 2009.

IV.2 States/Union Territories

The ownership pattern of deposits for end-March 2009 classified according to States/Union Territories is presented in Statement 3. In all the major States and Union Territories, except Maharashtra and Delhi, the bank deposits have been primarily mobilised from the ‘Household’ sector, which accounted for about threefifths of the total deposits. This is brought out by the fact that in 31 States/UTs, share of ‘Household’ sector deposits in total deposits was higher than the all-India share of ‘Household’ sector deposits in total deposits (58.3 per cent). Further, in 10 of these States/UTs, viz., Dadra & Nagar Haveli, Punjab, Mizoram, Rajasthan, Haryana, Arunachal Pradesh, Meghalaya, Jammu & Kashmir, Uttar Pradesh and Puducherry the contribution of ‘Household’ sector deposits to total deposits in respective states was above 75 per cent. These states accounted for 15.5 of total deposits and 20.7 per cent of ‘Household’ sector deposits. 20 States/ UTs had ‘Household’ sector deposits between 60.0 per cent and 75.0 per cent of their respective total deposits. At the other end of the spectrum, Maharashtra and Delhi had 40.3 per cent and 44.4 per cent of their total deposits from the ‘Household’ sector and they collectively accounted for 27.5 per cent of ‘Household’ sector deposits and 38.4 per cent of total deposits in 2009.

In 14 States/UTs, the share of the deposits of ‘Government’ sector in the total deposits as on March 31, 2008 was less than the all-India level share (14.0 per cent). The remaining 21 States/UTs, with combined share of 37.5 per cent of total deposits, accounted for 56.4 per cent of ‘Government’ sector’s deposits. Deposits of this sector had considerable contribution (more than 25 per cent) in the total deposits in 5 States/ Union Territories, viz., Lakshadweep, Sikkim, Manipur, Orissa and Delhi.

The share of ‘Foreign’ sector deposits in total deposits was below 5 per cent in respect of 29 States/ UTs. The ‘Foreign’ sector deposits accounted for 27.8 per cent, 22.5 per cent and 16.3 per cent of deposits in respect of Kerala, Daman & Diu and Goa, respectively. However, the ‘Foreign’ sector deposits were concentrated in the States of Maharashtra, Kerala, Gujarat, Delhi, Tamil Nadu, Karnataka and Punjab, which collectively accounted for 82.5 per cent of total ‘Foreign’ sector deposits. The share of ‘Private Corporate (Non-Financial)’ sector in total deposits in Maharashtra, Delhi and Karnataka was higher than the all-India level (14.5 per cent). About two thirds (66.9 per cent) of ‘Private Corporate (Non-Financial)’ sector deposits were concentrated in these three states.

IV.3 Major Metropolitan Centres

Deposits in Mumbai, Delhi, Kolkata and Chennai, the four major metropolitan centers, are analysed in this section. The ownership pattern of deposits of the four major metropolitan centers, viz., Mumbai, Delhi, Kolkata and Chennai, is presented in Statement 4. The ‘Household’ sector owned the highest share of deposits in each of the centre. The share was observed to be the highest in Kolkata (53.5 per cent) and the lowest in Mumbai (33.1 per cent). The next highest shares of deposits were owned by ‘Private Corporate (Non- Financial)’ and ‘Government’ sectors in the four major metropolitan centres taken together. The highest share of ‘Government’ sector was recorded in Delhi (25.7 per cent), followed by Kolkata (15.3 per cent) and Chennai (10.5 per cent) and Mumbai (9.9 per cent). The share of ‘Private Corporate (Non-Financial)’ sector was the highest in Delhi (24.9 per cent), followed by Mumbai (24.1 per cent) and Kolkata (22.3 per cent) and Chennai (20.3 per cent). The ‘Foreign’ sector accounted for 5.5 per cent and 4.2 per cent of total deposits in Chennai and Mumbai, respectively, while its share was lower for Kolkata (2.7 per cent) and Delhi (2.9 per cent). It was 3.8 per cent in the four major metropolitan centers taken together.

V. Ownership Pattern of Deposits According to Bank Groups

V.1 Composition of Deposits by Type of Account and Bank-Groups

The composition of deposits according to bankgroups is presented in Statement 5. At the aggregate level, the relative shares of different bank groups depicted very marginal changes as on March 31, 2009 as compared with the position a year ago (Chart 9). The Nationalised Banks accounted for the largest share at 47.3 per cent of total deposits as on March 31, 2009, followed by the SBI and its Associates (24.8 per cent), Other Scheduled Commercial Banks(OSCBs) (20.2 per cent) and Foreign Banks (4.7 per cent). During 2008- 09, the share of the SBI and its Associates increased by 2.2 percentage points, while that of other groups witnessed a decline.

The distribution of deposits according to type for the SBI and its Associates and the Nationalised Banks revealed more or less identical pattern, i.e., the share of term deposits being the highest, at about 60.7 per cent to 68.0 per cent, share of savings deposits at about 21.9 per cent to 27.5 per cent and current deposits at about 10.2 per cent to 11.8 per cent. The RRBs had 53.1 per cent of their deposits in savings deposits and 41.2 per cent of their deposits in term deposits. In respect of the OSCBs, term deposits accounted for the largest share of 66.7 per cent of total deposits (Charts 10A and 10B), while in the case of Foreign Banks, they contributed 58.8 per cent to total deposits. Current deposits formed a substantial share (25.2 per cent) of total deposits with Foreign Banks and on the other hand, such deposits for RRBs constituted only 5.7 per cent of total deposits.

V.2 Ownership of Deposits by Institutional Sectors and Bank-Groups

The ownership pattern of deposits according to bank groups as on March 31, 2009 is presented in Statement 6. The ‘Household’ sector accounted for the highest share in total deposits in all bank groups, except Foreign Banks, in whose case ‘Private Corporate (Non-Financial)’ sector deposits had the largest share (42.8 per cent). The share of the ‘Household’ sector in total deposits was at 58.3 per cent for the SBI and its Associates, 64.0 per cent for the Nationalised Banks and 47.6 per cent for the OSCBs while it was the highest at 81.0 per cent for the RRBs. ‘Individuals (including HUFs)’ was the major constituent of the ‘Household’ sector, in all the bank groups, though its share ranged from 23.8 per cent in the case of Foreign Banks to as high as 76.5 per cent for the RRBs, and about one-half each in the cases of the SBI and its Associates and the Nationalised banks.

The share of the ‘Government’ sector deposits was the highest at about 19.9 per cent in respect of deposits with the SBI and its Associates and for the Nationalised Banks it was 16.1 per cent. This sector’s share for the RRBs was at 17.7 per cent and for the OSCBs at 4.3 per cent. ‘Central and State Governments’ and ‘Public Sector Corporations and Companies’ contributed 16.0 per cent to deposits with the SBI and its Associates, as against 10.5 per cent share at all-SCB level.

‘Government’ sector deposits with the RRBs were largely contributed by ‘State Governments’ (9.9 per cent) and ‘Local Authorities’ (4.8 per cent). ‘The Government’ sector held 4.3 per cent of the total deposits with the OSCBs and these were held with shares by ‘Central and State Governments’ and ‘Public Sector Corporations and Companies’ at 2.3 per cent and 1.1 per cent, respectively.

The share of ‘Private Corporate (Non-Financial)’ sector in the total deposits was the highest for Foreign Banks (42.8 per cent), followed by the OSCBs (25.4 per cent). The corresponding shares in total deposits with the SBI and its Associates and the Nationalised Banks were relatively low at 12.2 per cent and 9.2 per cent, respectively, as on March 31, 2009.

The share of deposits from ‘Foreign’ sector was the highest in the case of Foreign banks (12.8 per cent of total deposits), followed by the OSCBs (4.9 per cent), the SBI and its Associates (4.2 per cent) and the Nationalised Banks (3.5 per cent). This sector had a negligible share of 0.2 per cent for the RRBs. All bank groups derived major part of ‘Foreign’ sector deposits from ‘Non-Residents’.