The banking business, including deposits and advances (loans), is slowing down in Gujarat, according to a recent report. The growth rate has dropped consistently from 13.59 per cent in 2014-15 to 7.17 per cent, a five-year low. Similarly, deposits growth has dropped to 5.26 per cent, also a five-year low. Advances growth stood at 9.51 per cent, second lowest in five years. Experts say that these are indications that Gujarat's economy is in very bad shape. According to the report of State Level Bankers Committee (SLBC) for January – March quarter of the fiscal 2018-19, total deposits in banks stood at Rs 6,97,250 crore, a rise of 5.26 per cent over Rs 6,62,394 crore in the previous fiscal. Similarly, total advances stood at Rs 5,90,664 crore, a rise of 9.51 per cent over Rs 5,39,392 crore in the previous fiscal. Total business mix of all the banks stood at Rs 12,87,914 crore, a rise of 7.17 per cent over Rs 12,01,786 crore in 2017-18. While total business mix grew by 46.69 per cent in five years, bad loans – measured as Non-Performing Assets (NPAs) – have become 2.89 times (growth of 189 per cent) as much to Rs 38,602 crore. Hemantkumar Shah, a professor of Economics at H K Arts College said that these are indications that the Indian economy, particularly that of Gujarat, is passing through a dangerous phase. "If deposits and advances are slowing down and NPA is rising, it is a sure sign that the economy is in a very bad shape. Slowdown in bank deposits indicate that household savings have come down. This will slow down consumer demand in future. Slowing of growth in loans indicate that manufacturing and consumption is slowing down. Rise in NPA will affect customers' confidence in the Indian banking sector," said Shah. Vikramaditya Singh Khichi, chairman of SLBC said that deposits have slowed down as savings is shifting towards equity market and mutual funds. Another banker with a Public Sector Bank said that the drop in overall banking business indicates that the circulation of money in the economy and business turnover has slowed down. "Earlier, we used to clear close to 6,000 instruments per day. Now, daily clearing (including RTGS and NEFT) has dropped to about 4,000. It means that number of business transactions have drastically come down. This indicates that the economy is weakening," said the banker. He further stated that the economy has been facing stress since the exercise of demonetisation and it has not revived since then. "We often feel that businessmen are no longer interested in continuing with their business. They are finding it hard to stay afloat. Their margins are shrinking," he said. Among advances, only MSME advances have risen. It has witnessed a growth rate of 34.05% over the previous fiscal. But sources in the industry said that it is less of an indication of industry's appetite for loans and more of a necessity to ensure that enough working capital is available to continue to run the business.

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