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Tag: deposit

  • U.S. bank lending holds steady in latest week

    U.S. bank lending holds steady in latest week

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    The numbers: Commercial and industrial loans — a key economic driver — held roughly steady in the week ending July 5, the Federal Reserve said Friday. Loans rose $200 million to $2.754 trillion, the central bank said.

    Bank lending has been slowly decelerating, falling for three straight months. C&I loans hit a peak of $2.82 trillion in mid-March, right before the collapse of Silicon Valley Bank.


    Uncredited

    Key details: Total bank deposits rose by $24.9 million to $17.367 trillion in the same week. Deposits have been shrinking slowly. They peaked at $18. 21 billion in mid-April.

    Big picture: In the wake of the collapse of Silicon Valley Bank in March, economists have been watching the data carefully for signs of a credit crunch, as banks have weak balance sheets as a result of the Fed’s swift increases in interest rates since March 2022.

    San Francisco Fed President Mary Daly said Monday she hadn’t seen credit tightening that is in excess of normal.

    “I do think, from research literature, that this takes a while to show itself, and so I think we are still looking into the fall before we would have a declarative statement to make about the extent of credit tightening and the impact on the economy,” Daly said.

    Market reaction: Stocks
    DJIA,
    +0.33%

    SPX,
    -0.10%
    finished the week higher on Friday. The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.832%
    rose to 3.83%.

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  • Incremental Credit-Deposit ratio of Scheduled Banks’ declined in the financial year so far

    Incremental Credit-Deposit ratio of Scheduled Banks’ declined in the financial year so far

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    The incremental credit-deposit (C-D) ratio of scheduled banks’ declined in the financial year so far, as incremental deposit accumulation has been almost two times the credit disbursement.

    The incremental C-D ratio since March-end till June 2, 2023, declined to 50.24 per cent against 95.17 per cent in the year-ago period (March-end to June 3, 2022).

    The C-D ratio conveys how much of each rupee of deposit is going towards credit markets. A higher growth in this ratio suggests credit growth is rising quickly, which could lead to excessive risks and leveraging on the borrower’s side.

    “In the case of banks, it could imply that there will be a rise in non-performing assets when the economic cycle reverses. This ratio serves as a useful measure to understand the systemic risks in the economy,” according to the RBI.

    Deposit accumulation

    Deposit accumulation of scheduled banks at ₹6,65,238 crore in the financial year so far was almost 2.5 times the year ago period’s accumulation (of ₹2,63,819 crore)

    The robust deposit accumulation comes against the backdrop of higher interest rates being offered by banks on term (time) deposits and ₹2,000 bank notes being returned to banks by the public as RBI is withdrawing them from circulation in view of these notes not being commonly used for transactions and in pursuance of its “Clean Note Policy.”

    Credit disbursement

    Credit disbursement by scheduled banks at ₹3,34,272 crore in the financial year so far was about 1.33 times the year-ago period’s disbursement (of ₹2,51,099 crore).

    Banks seem to be witnessing relatively healthy credit growth in sectors such as services, personal loans, agriculture and allied activities, and large industry, going by the RBI’s sectoral deployment of bank credit data for April 2023.

    In a recent NABARD Research and Policy paper, Dennis Rajakumar, Director, EPW Research Foundation, said: “The credit (lending) to deposit ratio reveals the role of banks in ‘promoting productive sectors and contributing to economic growth’ (RBI, Report on Trends and Progress of Banking in India 2003-04: 63), and so a higher CD ratio implies greater credit orientation of banks.

    “The CD ratio informs the extent of banks credit in relation to deposits. The CD ratio could vary depending upon monetary policies. If the CD ratio remains unchanged, it means the credit expansion has kept pace with deposit mobilisation.”

    CARE Ratings, in a note, observed that credit demand was lower at the beginning of the fiscal year, hence pressure on deposit rates has eased. The rise in rates seems to have been arrested for now, at the end of May.

    “The trajectory of rates on the deposit side will be shaped by the pace of credit offtake; hence, we would need to observe the rate movement over the coming months to conclude if the rates have peaked or if further increases will continue,” per the note.

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  • SVB’s failure proves the U.S. needs tighter banking regulations so that all customers’ money is safe

    SVB’s failure proves the U.S. needs tighter banking regulations so that all customers’ money is safe

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    The run on Silicon Valley Bank (SVB) SIVB— on which nearly half of all venture-backed tech start-ups in the United States depend — is in part a rerun of a familiar story, but it’s more than that. Once again, economic policy and financial regulation has proven inadequate.

    The news about the second-biggest bank failure in U.S. history came just days after Federal Reserve Chair Jerome Powell assured Congress that the financial condition of America’s banks was sound. But the timing should not be surprising. Given the large and…

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  • Austin Pets Alive! | Sometimes All It Takes is a Bag of Food to Keep…

    Austin Pets Alive! | Sometimes All It Takes is a Bag of Food to Keep…

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    Feb 08, 2023

    What can 24 pallets of donated pet food do? It can connect a community, build a community, and keep the individuals in that community fed and safe.

    In 2022, APA! became a benefiting partner of a program created by the Humane Society of the United States and Chewy that connects Chewy’s warehouse returns to shelter partners in need. This collaboration has helped build upon our expanding PASS (Positive Alternative to Shelter Surrender) program, which has seen extreme growth over the last few years.

    A large delivery that we welcomed to our main location will make its way across Austin in a few stages. First, our friends at Austin Humane Society have collected eight pallets that will help stock one of their quarterly food banks. Next, several partnering organizations—multiple rescues, food pantries, and municipal partners—will come to APA! to load up supplies to support their efforts. And finally, APA! will welcome community members in need to load up supplies that may mean the difference between keeping their pet or having to rehome.

    When a community member is facing hard times, they may find themselves having to make the hard and heartbreaking decision to find a new home for their beloved pet. The last three years have been an eye-opener for so many, and for APA!, we saw the gap our community, and communities beyond Austin, have in providing support for a family that includes pets. Our PASS program, which had been quietly running in the background for years, shifted to a program that we recognized needed fast growth and that we needed to bring to the foreground of operations—so we could support people and pets in our community, and keep families together.

    In 2022, this “little program that could” raised over $44,000 for community members who needed medical support or pet deposit support in order to keep their pet, distributed over $300,000 worth of supplies and foods to various shelters and rescue partners, fulfilled 400+ individual pet pantry orders which served over 1500 pet family members and, when rehoming a pet was the best option for all parties, intaked a little over 1000 pets, typically, directly into foster homes.

    We’re honored to be a central hub partner for the HSUS and Chewy donation program as a way to continue to support our community members when they need a helping hand.

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