The Hindu Business Line : Banks prefer medium-term loans

The pattern of residual maturity of advances of 19 public sector banks with cumulative lending of a little over Rs 5 lakh crore shows that about a third of bank lending is for this tenure.

Banks have been disclosing this information for the past five years.

The pattern of loan maturity has been broadly similar, with occasional variations in individual banks.

At the systemic level, there appears to be a near perfect match of assets and liabilities for this period. Depositors too had preferred to park the bulk of their money in the 1-3-year time bucket.

For some banks such as Central Bank, Vijaya Bank, State Bank of Bikaner and Jaipur, State Bank of Travancore, the proportion of 1 - 3 year loans was extremely high at 50 per cent and above.

Cash credit facilities which are granted for a year and are normally renewed every year are classified in the below one year category of time buckets.

Nearly 40 per cent of the loans were in the below one year category while about 28 per cent of the loans were in the above 3 year category.

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