Branch expansion and deposit mobilisation of the scheduled commercial banks located in rural and urban areas of India: A comparative analysis
This paper makes a comparative analysis of the branch expansion and the deposit mobilisation of the commercial banks in rural, semi-urban, urban and metropolitan areas of India in the post-liberalisation period using the Reserve Bank of India (RBI) data for the post-liberalisation period from 1992 to 2018. The study exposes that there was only a moderate speed in the expansion of commercial bank branches in India in the post-liberalisation period. The speed of branch expansion was relatively high in metropolitan areas and low in rural areas. Largest proportion of commercial bank branches has been located in rural areas, but the share of rural areas has been continuously declining over the years. The number of deposit accounts has been slowly growing in all the four types of locations in India in the initial years of the study period, but the speed has been accelerated in the second half of the period. There was no considerable difference in the distribution of the deposit accounts across the four different locations of the country during the study period. Initially, the number of accounts per branch of commercial banks has been lowest in the branches located in rural areas and highest in metropolitan areas; but in the recent years, the number of accounts per branch has become highest in the branches located in the semi-urban areas followed by metropolitan areas, and urban areas. Growth in the quantum of deposits was not considerably different across the four different types of locations in the country but, around half of the total amount of deposits is made in the banks located in metropolitan areas and the branches located in the rural areas accounted only very a low proportion. There was a steady decline in the deposit amount per account in the commercial bank branches located in semi-urban and metropolitan areas; conversely, there was stable growth in the deposit amount per account in the branches located in urban and rural areas. The study reveals that there are perceptible differences in the branch expansion and deposit growth pattern of the scheduled commercial banks located in rural, semi-urban, urban and metropolitan areas of India, particularly in the post liberalisation period.