The big money in India’s cities

Almost seven out of ten rupees banked in India are to be found in the top 100 centres. They account for 68.5% of the total bank deposits in India.

The concentration of the country’s bank deposits in India’s urban centres can be seen in this detail from a table I have assembled using data from the Reserve Bank of India (RBI).

This is the quarterly series that the RBI puts out and is called ‘Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks’.

The intriguing table which forms the image is of the top 100 urban centres ranked by bank deposits, and arranged alphabetically, for the years 2007, 2009, 2011 and 2013. The city names and total deposits (in crore rupees) are seen. This is the lower end of the table, and I have coloured ten cities to show how their deposits have changed over six years.

The rate of growth has been extremely steep. We have here Panaji, Patiala, Pune, Ranchi, Shillong, Thane, Thiruvananthapuram, Udaipur, Varanasi and Visakhapatnam for no reason other than their entries for all four years are visible. The patterns for the rest of the top 100 centres is generally the same.

For these ten cities, the average growth rate of their total bank deposits over these six years is 190%! This is most significant to us, especially considering the food inflation, the cost of cultivation, wage rates of agricultural labour and allied issues I write about in this diary. Have the wage rates for agricultural labour grown over these last six years at even one-third this average rate? Not at all.

From this small set of ten cities alone, the lowest rate of growth of total bank deposits is 88% (Vishakhapatnam in Andhra Pradesh) and the highest is 249% (Thane in Maharashtra).

The progression of the size of total deposits can be seen from Shillong (in Meghalaya) from Rs 2,577 crore in 2007 to Rs 8,311 crore in 2013 (which is dwarfed by the others). In Ranchi (Jharkhand) total bank deposits have grown from Rs 6,436 crore in 2007 to Rs 21,688 crore in 2013!

That is why the top 100 centres accounted for 68.5% of the total bank deposits in India – this is a ratio that has remained roughly the same for the last six years. In addition, as the ‘Quarterly Statistics’ has noted in its highlights, the top 100 centres also accounted for 76.9% of total bank credit.

And that is why it means little for central and state governments, and for businesses and NGOs and social entrepreneurships to talk about ‘financial inclusion’ when we have proof – quarter after quarter – of the persistence of financial inequality between India and Bharat.

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