Institutional Infrastructure

  1. 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]