Financial institutions have become critical for sustaining growth and employment in recent years. Entrepreneurs and even individuals have to rely on these institutions for their capital expenditure needs as also needs for day-to-day operations and their cash flow related mismatches. Financial institutions are intermediaries who receive deposits and on lend it to individuals and entrepreneurs generally for productive purposes for a defined period and purpose. Commercial banks are the principal intermediaries. Overall number of accounts in commercial banks in Meerut increased from 2.75 lakhs in 2012 to over 5 lakhs in 2022 with an annual growth of 7.2 per cent. Total credit disbursed also more than doubled from nearly eight thousand crores to twenty thousand crores. While credit growth kept pace with GSDP growth, accounts grew faster than population growth indicating a greater penetration of banking services. Overall credit to GDP ratio nearly remained at the same level. Sectoral number of accounts, credit disbursed and growth over this period is in Table 11. The share of personal loans during the decade has considerably increased and account for more than one third of total loans. As against this, the share of loans to agriculture and manufacturing has declined. There was a decline in the share of financial disbursement to professional services. GSDP data also show a relatively moderate growth for manufacturing. Loans for education and other purposes which are clubbed in other finances have also witnessed a slower growth.
Table 11 : Number of Accounts and Credit Disbursed for each category of borrowers
March 2022
March 2012
CAGR
Accounts (00)
Credit (Rs Lakhs)
Accounts (00)
Credit (Rs Lakhs)
Accounts
Credit
I. Agriculture
1,791
358,323
1,509
152,465
1.7
8.9
1. Direct Finance
1,740
346,925
1,436
142,424
1.9
9.3
2. Indirect Finance
51
11,398
73
10,041
-3.5
1.3
II. Industry
379
383,966
58
219,588
20.6
5.7
1. Mining & Quarrying
1
925
0.1
563
31.8
5.1
2. Manufacturing
371
358,826
55
197,013
21.0
6.2
3. Electricity, Gas & Water
0.3
949
0.1
10,136
13.7
-21.1
4. Construction
6
23,267
3
11,876
8.5
7.0
Ill. Transport operators
96
38,031
11
4,873
23.9
22.8
IV. Professional services
346
114,985
51
89,387
21.0
2.6
V. Personal loans
2,240
740,472
647
181,261
13.2
15.1
1. Housing
263
379,809
174
97,696
4.2
14.5
2. Purchase of Consumer Durables
11
2,614
11
863
-0.1
11.7
3. Rest of the Personal Loans
1,967
358,049
462
82,702
15.6
15.8
VI. Trade
482
280,697
249
84,955
6.8
12.7
1. Wholesale Trade
68
97,069
14
11,456
16.9
23.8
2. Retail Trade
414
183,628
235
73,499
5.8
9.6
VII. Finance
17
7,024
2
4,777
22.0
3.9
VIII. All Others
165
82,392
228
38,623
-3.2
7.9
Total Bank Credit
5,516
2,005,891
2,756
775,929
7.2
10.0
[Source: Reserve Bank of India- Basic Statistical Returns of Banks]
