The Hindu Business Line : Gleanings from the report on trends and progress of banking

Ask bankers how they plan to raise resources and you get a lecture on financial inclusion and "banking the unbanked". We now have some statistics provided by the regulator to nail this rhetoric. According to the Report on Trends and Progress of Banking in India of the Reserve Bank of India, about 1,250 branches were opened between July 2004 and June 2005 across the country. Only 15 of these were in "unbanked" centres. The record only deteriorates in the next year (July 2005-June 2006) when 933 branches were opened. Of these, only two were opened in "unbanked" centres.

Computerisation expenditure

Public sector banks have incurred an expenditure of Rs 10,676 crore on computerisation and development of communication networks during the past six-and-half years. The top spender was State Bank of India, which incurred a sum of Rs 2,814 crore. The other top spenders were Bank of India (Rs 1,008 crore), Punjab National Bank (Rs 768 crore) and Bank of Baroda with an expenditure of Rs 474 crore during the same period.

Sensitive Lending!

Lending to sensitive sectors by public sector banks was up 95 per cent to Rs 1,71,618 crore in 2005-06. Loans given to capital market, real estate and commodities sectors are classified as "sensitive sector lending". Such lending constituted 15 per cent of their total loans. The lending to real estate sector at Rs 1,56,903 crore, accounted for the maximum growth in such lending.

For new private banks, sensitive sector lending was up about 56 per cent at Rs 74,608 crore. But the proportion of sensitive sector lending as a percentage of total loans was higher at 32 per cent. Lending to commodities sector by new private banks showed a two-fold jump to Rs 2,985 crore.

Consumer boom?

There are a number of reports on how the country is enjoying a boom in consumption expenditure. One would have thought that this would reflect in higher bank financing of consumer durables. But they are clearly not in the party. Bank financing to the consumer durables sector, actually dropped to Rs 8,783 crore in 2005-06 compared to Rs 9,083 crore in the previous year.

Tolerant society!

If one were to go by the statistics provided by the RBI on complaints received against banks, one would have to either compliment the banks for splendid customer service or bemoan the tolerant attitude of customers in general.

For a sector that services millions of customers, the number of complaints received totals less than 5000! SBI, by virtue of its huge distribution of branches, tops the list with 1,100 complaints, followed by ICICI Bank at 783, HDFC Bank at 374, Citibank at 335, and Punjab National Bank at 293 complaints.