J&K banking sector shows dip in credit-deposit ratio despite growth in deposits

Srinagar, Apr 10: The financial health indicators for Jammu and Kashmir's banking sector reveal mixed trends as of December 2024. While total deposits have reached an impressive `1,91,800 crore, advances stand at `1,18,945 crore, resulting in a Credit-Deposit Ratio of 62.01%. This represents a marginal decline from the previous year's 64.39%, indicating a slight reduction in lending efficiency despite growing deposits.

The Economic Survey 2025 paints a comprehensive picture of the Union Territory's banking landscape, which now encompasses 37 banks and financial institutions operating through a network of 10,149 banking touchpoints. This extensive infrastructure includes 2,181 physical branches, 5,299 Banking Correspondents, and 2,669 ATMs, significantly improving accessibility for residents.

Banking coverage metrics show notable improvement, with one branch now serving approximately 5,624 residents and covering an average area of 19.37 square kilometers. Private banks dominate the landscape with 51% of all touchpoints, while public sector banks account for 22%, followed by other financial institutions (16%), regional rural banks (8%), and cooperative banks (3%).

During the financial year 2024-25 (up to December 2024), banks disbursed `51,646.89 crore to 13.22 lakh beneficiaries under the Annual Credit Plan, with the Priority Sector receiving 51% (`26,406.16 crore) of the total disbursements.

Financial inclusion initiatives continue to show significant progress. The Pradhan Mantri Jan Dhan Yojana (PMJDY) has facilitated the opening of 24.75 lakh accounts with cumulative deposits of `1,688.97 crore. The Pradhan Mantri MUDRA Yojana has seen a remarkable 68% year-on-year increase, disbursing `6,713.80 crore to 3,10,256 beneficiaries compared to `3,984.97 crore in the previous corresponding period.

Social security schemes have also gained substantial traction. As of December 31, 2024, the Pradhan Mantri Suraksha Bima Yojana has enrolled 20,21,372 beneficiaries, while the Pradhan Mantri Jeevan Jyoti Bima Yojana covers 8,27,751 individuals. Additionally, 2,31,553 people have enrolled in the Atal Pension Yojana.

The Stand-Up India Programme, which supports entrepreneurship among SC/ST individuals and women, has disbursed `429 crore to 2,253 beneficiaries, recording a 10% year-on-year growth. Under the SHG-Bank Linkage Programme, 59,220 Self-Help Groups have received credit amounting to `2,343.59 crore since the scheme's inception, with women's SHGs accounting for an impressive 97.78% of the total credit disbursed.

In the agricultural sector, 10,82,090 Kisan Credit Cards are active (8,49,193 for crops and 2,32,897 for animal husbandry and fisheries), with a sanctioned limit of `9,553.13 crore, averaging `88,000 per card. Additionally, 970 Joint Liability Farming Groups have been formed, of which 965 have been credit-linked with facilities amounting to `18.84 lakh.

While banking penetration continues to improve across J&K, the declining Credit-Deposit Ratio suggests banks may need to focus on enhancing lending activities to better utilise the growing deposit base and further support economic development in the region.