Source: BL
Context:
RBI’s latest data highlights that Scheduled Commercial Banks (SCBs) have struggled to mobilise deposits and expand lending in rural India (“Bharat”) compared to semi-urban, urban, and metropolitan areas over the last 25 years.
Key Highlights:
Credit Growth (2000–2025)
- Rural loans increased 30 times but still less than the overall 41 times average.
- Cities and metros saw faster loan growth, mostly due to retail loans like housing, vehicles, and personal credit.
- Meaning: How much bank lending (loans) has grown in rural, semi-urban, urban, and metro areas.
Deposit Growth (2000–2025)
- Rural deposits rose 20 times, lower than the overall 28 times average.
- Semi-urban deposits grew 22 times, urban 26 times, while metros grew the fastest at 36 times.
- Meaning: How much money people and businesses keep in banks as savings, current accounts, or fixed deposits.
Credit-Deposit Ratio (CDR)
- Went up from 56% in 2000 to 80% in 2025.
- Meaning: Shows how much of the deposits collected by banks are being given out as loans.
- Higher ratio means banks are lending more compared to the deposits they get.
Urbanisation Trends
- Urban population increased from 28% in 2000 to 37% in 2024.
- Rural population reduced from 72% to 63% in the same period.
- Meaning: More people are moving to cities, fewer people live in villages compared to before.
Important Concept You Should Know for RBI Exam
About Scheduled Commercial Banks (SCBs)
| Aspect | Details |
|---|---|
| Meaning | Banks listed in the Second Schedule of the RBI Act, 1934. |
| Facilities Available | Eligible to borrow from RBI, use clearinghouse facilities, and access liquidity support. |
| Types Included | 1. Public Sector Banks 2. Private Sector Banks 3. Foreign Banks in India 4. Regional Rural Banks (RRBs) |
| Eligibility (Section 42(6), RBI Act, 1934) | – Capital Requirement: Minimum paid-up capital & reserves of ₹5 lakh (practically higher required). – Depositor Safety: Should not conduct business harmful to depositors. – Affairs Management: Must be in the interest of depositors and the public. – Compliance: Must satisfy RBI that it can follow RBI Act & Banking Regulation Act. |
