Commercial Banks’ deposits for the month increase by Rs 25 arba, where lending increases only by Rs 21 arba; see detailed figure

During the first month of the year, the total deposits in commercial banks has gone up from Rs 22.68 kharba to Rs 22.93 Kharba, which is an increment of 1.08%. Similalry, the total lending has gone up from Rs 20.02 kharba to Rs. 20.23 kharba, which is an increment of 1.05% compared to last month.

We can see from the figures that the amount of both the deposits and lending seems to be continually increasing. However, as we see the figure we can see that the amount of deposits have increased by Rs 25 arba, whereas the lending had increased by Rs 21 arba only.

Given the ongoing liquidity shortage in the market and the pressure to maintain the CCD ratio, the commercial banks seem to be contracting their growth in lending and focusing more on acquiring more deposits. However, the situation has loosened up a bit than before, so once the budget is announced the liquidity shortage can be expected to quiet down from the release of the government funds.

See the detailed figure below: