Bank deposits and advances in the state have stagnated in the current financial year, according to a the State Level Bankers Committee (SLBC) report for the October to December quarter of the fiscal 2018-19. Overall deposits have grown by 1.94 per cent, while overall advances have grown by 8.35 per cent. Market players say that rise in advances is more to meet the liquidity of industries and is less because of actual growth. They also said that stagnation in deposits could be because of lower savings and a fall in trust on banks. According to the report, bank deposits stand at Rs 6,75,228 crore, a rise of 1.94 per cent over Rs 6,62,394 crore in the last quarter of the previous fiscal. Bankers said that this is because of deliberate lower interest rate to reduce cost of deposits. "Earlier, banks used to offer incentives to depositors. This time no such sops were offered. So deposits have not grown," said a banker with the condition of anonymity. However, Bhagyesh Soneji, former chairperson of ASSOCHAM in Gujarat said that this also reflect that lower wage hike and increasing costs have taken a toll on savings of the masses. "People are able to save less, so obviously deposits are stagnating. Moreover, there are concerns over safety of banks. Merger and other measures in Public Sector Banks have eroded the confidence of masses," said Soneji. The scenario in advances is also similar. Total bank advances stand at Rs 5,84,439 crore, a rise of Rs 45,047 crore or 8.35 per cent over Rs 5,39,392 crore. Of this, priority sector has a share of Rs 35,258 crore of incremental loans and within it, MSME advances has a share of Rs 24,947 crore. It grew by 26.30 per cent during the fiscal. "Major part of the rise is because MSMEs need more funds to maintain their liquidity. Special measures to reach out to small business as well as relaxation in norms of Non Performing Assets (NPA) has also enabled them to raise more loans. No doubt there is some growth in MSMEs as well," said Vasa. Soneji said that overall slower growth in advances reflect overall slowdown in the economy. "GDP figures are being revised downwards, IIP figure also reflect that manufacturing sector is not doing well. Agriculture has also major challenges. Service sector is also facing a problem," she said.

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