Indian rupee investments
An employee counts Indian currency notes at a cash counter inside a bank in Kolkata June 18, 2012 (Representational image)Reuters File

Burdened by problems of bad-loans and subsequent stress on capital, state-run banks lost their market share in loan disbursal during 2015-16 year, reported the Mint. Their outstanding credit fell by around four percentage points from 50.06 percent in March 2015  to 46.43 percent in March 2016.

Private sector banks, on the other hand, upped their market share by four percent to 24.04 percent during 2015-16.

Except State Bank of India and its associate banks, which witnessed a slight 0.15 percent increase in their lending, the rest of the public sector lenders saw their overall credit market share fall to a 12-year low. It was in September 2004 quarter that these banks had their lowest ever market share of 49.29 percent.

With a 1.37 percent growth in credit disbursal, the March quarter was also the lowest of quarterly growth, reported the Mint, citing Reserve Bank of India (RBI) data available till 2003.

Incidentally, it was the RBI's review of asset quality that resulted in identification of many bad loan-laden state-run banks during 2015-16. Their gross non-performing assets (or bad loans) jumped 95 percent for the period on higher provisions to service those loans and thereby converting their net profits to net losses.

Even if these banks had the requisite bandwidth to expand further lending, the scope was limited as their identification had pulled down their already down capitalisation level, according to the report.

Deposits

Market share of total deposits held by state-run banks too fell to 48.32 percent in March 2016 from 50.95 percent in a year ago period.

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