Monday, March 21, 2016

Is data meant to please the bosses in Banks?



“The growth in CASA deposits moderated due to decline in savings deposits that in turn got reflected in overall decline in deposit growth.
Bank-group wise, PSBs recorded decline in CASA deposits while PVBs and FBs recorded higher growth during 2014-15.” 
The decline would have been more alarming but for JAN Dhan.










RBI recently released the BSR statistics for 2014-15 read with the Trend and Progress of Banking reveals some interesting results. While the aggregate deposits amounted to ₹ 89,221 billion, registering a growth of 12.1 per cent in 2015 as against 13.4 per cent in the previous year, the PMJDY accounts swelled to 144mn in 2015 constituting 17.4% increase in the group.

Economic Survey 2016-17, GoI in page 52 talking of JAM mentioned that 120mn accounts under Jan Dhan were opened in just ‘last year’ (Is it Jan-Dec or April-March, it is for us to configure).

Chart 2.21 of the Trend and Progress of Banking in India however confirms that the PMJDY accounts are the basic savings bank deposit accounts. Then read this statement on CASA deposits in the Report.

Then the data on population group wise deposits and credit in the BSR 2015 shows that the rural savings deposits showed a steady increase in the number of accounts during the last three years while the semi urban savings deposit accounts showed a marginal decline during 2014-15 compared to the previous year.  Just during the year 14-15, the increase in rural and semi-urban areas amounting to about 140mn accounts could be attributed to in majority the PMJDY.
GROWTH OF NUMBER OF SB DEPOSITS ACCOUNTS IN BANKING INDUSTRY FROM MARCH 2012 TO MARCH 2015

Population Group
No of Saving Bank  Deposit Accounts ( IN CRORES)

31-3-2012
31-3-2013
31-3-2014
31-3-2015
RURAL
24.13
28.84(19.5)
35.39(22.4)
43.70(23.5)
SEMI-URBAN
19.65
23.55(19.8)
28.58(21.4)
34.52(20.8)
URBAN
13.02
14.62(12.3)
16.84(15.2)
19.81(17.6)
METRO
13.48
15.25(13.1)
16.95(11.1)
18.38(15.8)
TOTAL
70.27
82.27
97.77
117.03

(Source: Statement 1.18 of Basic Statistics Returns of Scheduled Commercial Banks 2012 to 2015 of RBI)

Admitting that several accounts could be with zero-balance, the banks were supposed to open overdraft accounts after six months of operations. Data reveals that banks opened such accounts only in respect of 0.65% of the total number of accounts as at the end of December 2015.  

Financial inclusion efforts acclaimed as the best in the world post PJMDY actually gained mileage in rural areas and suffered in semi-urban and urban areas. But the traction in terms of deposits in PMJDY indicates that the urban and metro areas showed significant growth.

RBI seems to be content with the data submission and aggregation but not its correctness across the population groups and different schemes. Already there are wide ranging discussions on the actual position of NPAs versus that reported by the Banks. In spite of computerization of records it is enigmatic that such data discrepancies should occur and banks are eager to project what they are not – particularly in the PSBs.

Had it not been for the Prime Minister’s Jan Dhan Yojana the performance in savings bank deposit accounts would have been far more disappointing. This is the only silver lining in the dark clouds of NPAs.

The burden of the story is that the banks are eager to show performance that draws the attention of FM and PM and the data is like a bikini suit. Growth oriented economy cannot afford the luxury of such showmanship.
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