Bank credit grew by 18.2 per cent to Rs 67,121 crore from Rs 44,758 crore in the last financial year. Food credit grew by more than double, increasing to Rs 8,875 crore (Rs 4,331 crore), while non-food credit expanded by 16.5 per cent to Rs 58,246 crore (Rs 40,427 crore). As a result, the CD ratio moved up to 53.6 per cent as on March 24, 2000, from 51.7 per cent for the corresponding period of the last fiscal.

Investments of scheduled commercial banks (SCBs),in government and other approved securities increased by Rs 54,350 crore, compared to a rise of Rs 35,889 crore in the previous year. Investment-deposits ratio, on an outstanding basis, increased to 38 per cent from 35.7 per cent.Cash balances-deposits ratio declined to 7.7 per cent (9.5 per cent). Cash balance-deposits for SCBs declined by Rs 5,161 crore in 1999-2000, as against an increase of Rs 6,604 crore in 1998-99.

The investment in various market instruments-commercial paper,PSU bonds and bonds floated by the corporate sector-stood at Rs 61,429 crore (Rs 48,446 crore). The increase in these investments coupled with non-food credit aggregated Rs 71,133 crore (Rs 56,556 crore) during this period.

"In recent times the SCBs have increased their investments in instruments that fall outside the purview of SLR participation in response to growing relaxation of such regulations on banks' investments in such securities. The current restriction on banks' investments relates to only ordinary shares, convertible debentures of corporates, and units of equity oriented mutual funds," stated the Reserve Bank of India (RBI) in its Report on Trend and Progress of Banking in India for 1999-2000.

Of late, the RBI has allowed banks to increase their exposure to capital markets after it revised the guideline to "five per cent of outstanding loans" from the earlier "five per cent of incremental deposits". During 1999-2000, deposits as per returns, exhibited a lower growth of 13.9 per cent (Rs 99,319 crore) from 19.3 per cent (Rs 1,15,540 crore) in 1998-99. u Demand deposits increased by Rs 9,943 crore (8.5 per cent), which was lower than Rs 14,910 crore (14.5 per cent). Time deposits also registered a lower growth of Rs 89,376 crore (Rs 1,00,630 crore).