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Deposit mobilisation

Deposit mobilisation. Introduction. Deposit Mobilization is one of the primary functions of a commercial bank. Deposits mobilized by banks play a key role not only as an important source of funds for banks but also as instrument for promoting saving and banking habit among the people.

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Deposit mobilisation

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  1. Deposit mobilisation

  2. Introduction • Deposit Mobilization is one of the primary functions of a commercial bank. • Deposits mobilized by banks play a key role not only as an important source of funds for banks but also as instrument for promoting saving and banking habit among the people. • Deposits are essential raw material for the banking industry. Commercial banks are expected to make efforts in both the rural and urban areas for mobilizing savings in the form of their deposits which are beneficial to them and the country as well.

  3. The banking sector has played an increasingly important role in in the financial intermediation process by mobilising savings in the form of deposits .

  4. Deposit mobilisation was one of the main objective of nationalisation. During the last years commercial banks are making sincere efforts to mobilise the savings of the community for their channelization in to productive activities.

  5. The two main functions of banks are mobilisation n of resources and chanalise these resources in to various productive purpose.

  6. Deposit mobilisation factors • Two types of factors • Endogenous and exogenous • Exogenous factors are general economic environment of the region, volume of business transactions of the region, confidence of the people in the banking aystem,banking habits of the people and most Important of all the saving potential of the region. These factors however differ from region to region.

  7. exogenous factors are more conducive to deposit mobilisation, banks may fail because of unfavourable endogenous factors such as location and physical fitness of a bank in terms of building, furniture, cheque, clearance, pay slips etc. The major and more important aspect is the man behind the counter. His enthusiasm, energy and ability to serve the customers are the factors that count most.

  8. Mobilisation growth • Nationalisation of 14 major banks in July 1969. Pre nationalisation phase-(1951-52 to 1968-69) 9.5% per annum. 19.2%-1969-70 to 1983-84 1984-85 to 1994-95 & 1995-96 to 2004-2005 it was 18.4% and 15.7% per annum respectively. 2005-06 to 2007-08 21.4% bank deposit.

  9. The bank deposit rose to as high as 71,967.6 billion at end march 2013(it was just 43.4 billion in 1969) • Reasons 1.Inflationary increase in the quantity of currency 2.Rise in national inome 3.Deposit mobilisation.

  10. Growth pattern • Time and demand • Time deposits have grown much higher than the demand deposits. • (64,546.7 billion time deposits while demand deposits only 7420.9 billion at the end of march 2013) • Share of time deposits to aggregate deposit was 89.7% , it was only 10.3% for demand deposits.

  11. State wise distribution of deposits • Maharashtra leads • Maharashtra,gujarath,delhi and tamilnadu 46% at 2012 • 5.5% -punjab and haryana (Credit deposit ratio was 80.8 % in 1976 73.6% in 2010 It rose to 79.1%2013)

  12. Sectoral deployment before nationalisation • 1951-commerce and industry(36 & 34) • Agriculture-2.2%

  13. Sector wise deployment of bank credit • Year on year non-food bank credit 11.3% in 2018 sep-6.1% 2017 • Credit to agriculture and allied activities • 5.8% in 2018 -2017 • Credit to industry 2.3% 2018 0.4% 2017 credit to service sector 24% in 2018 -7% in 2017 Personal loan 15.1% in 2018 -16.8% in 2017

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