Noida Banks' Low Cash-Deposit Ratio Raises Concern - PTI

Noida, Mar 5 (PTI) Gautam Buddh Nagar District Magistrate Manish Kumar Verma on Tuesday raised concern over low cash-deposit ratio in several banks of Noida and Greater Noida, directing officials to send letters to regional managers of all such branches.

The DM raised the concern at a meeting with the bankers in Surajpur held to discuss the various government schemes and loan facilities extended to the eligible beneficiaries, according to an official statement.

"During the review process in the meeting, the District Magistrate found that the cash-deposit (CD) ratio of the district was 66.19 per cent in the last quarter, for which he appreciated the work of the officers concerned but also noted that the CD ratio of many bank branches is 'very less' -- even less than 60 per cent," the statement said.

"In this regard, he has given strict instructions that a letter should be sent by the district administration to the regional manager of the banks whose CD ratio is less," it added.

The CD ratio indicates the proportion of a bank's total deposits held in the form of cash or cash equivalents. It is expressed as a percentage and is calculated by dividing the total cash held by the bank by its total deposits.

A CD ratio less than 60 per cent would imply that a significant portion of a bank's deposits is not held in cash or cash equivalents. This may raise concerns about the bank's liquidity position, as it suggests a lower capacity to meet immediate withdrawal demands. However, a low CD ration does not necessarily mean that a bank is distressed.

During the meeting, DM Verma also stressed that the bankers have an important role in further strengthening the economic system and should move forward with positive approach as per the intention of the Uttar Pradesh government.

He called on them to approve loans on highest priority to the eligible beneficiaries of various state and central government schemes, according to the statement.