Fund glut and a slowdown in corporate disbursals led to banks raising their lending to two sensitive sectors -- capital markets and the commodities sector -- in the financial year 2003-04.
For the first time in the last four years, private and public sector banks have increased their advances to capital markets and the commodities sector.
According to a sample of 36 banks, the real estate sector continues to be the favourite with their net advances crossing the Rs 11,000 crore (Rs 110 billion) mark in 2003-04.
Net advances to these three sectors by the 36 banks went up by 13.1 per cent to Rs 20,723 crore (Rs 207.23 billion) in fiscal year 2003-04 from Rs 18,324 crore (Rs 183.24 billion) in fiscal 2002-03.
Their net advances to the capital markets jumped up by 21.2 per cent in fiscal year 2003-04 compared with a decline of 15.2 per cent in fiscal year 2002-03 and 21.2 per cent in fiscal year 2001-02.
Advances to the commodities sector rose by 10.5 per cent in the year compared with a modest rise of 4.6 per cent in the previous fiscal.
These banks advanced Rs 1,744.42 crore (Rs 17.44 billion) to the capital markets in fiscal year 2003-04 as against Rs 1,374.32 crore (Rs 13.74 billion) in the previous year.
Net advances to the commodities sector moved up to Rs 7,861.17 crore (Rs 78.61 billion).
Advances to the real estate sector zoomed to Rs 11,116.98 crore (Rs 111.17 billion), up 13 per cent over Rs 9,833.69 crore (Rs 98.34 billion) worth advances in fiscal 2002-03.
Among the 36 banks, Bank of India's net advances to capital markets were the highest at Rs 426.89 crore (Rs 4.27 billion). For ICICI Bank, the advances were at Rs 248.93 crore (Rs 2.49 billion), Syndicate Bank recorded a 122 per cent rise in net credit at Rs 241.9 crore (Rs 2.42 billion).
UCO Bank topped the list of advances to the commodities sector in value terms at Rs 645.54 crore [Rs 6.45 billion] (up 38.3 per cent), followed by Bank of Baroda at Rs 612.67 crore (Rs 6.13 billion) and Canara Bank at Rs 603.09 crore (Rs 6.03 billion).
IDBI Bank raised its advances to the commodities sector by 367.1 per cent to Rs 279.42 crore (Rs 2.79 billion), followed by Corporation Bank (up 157 per cent), UTI Bank (up 98.7 per cent) and United Bank of India (up 91 per cent).
ICICI Bank became a major patron to the real estate sector with net advances of Rs 2,517.23 crore (Rs 25.17 billion) in fiscal year 2003-04 against Rs 2,094.18 crore (Rs 20.94 billion) in the previous year.
Bank of India stood second with net advances of Rs 2,428.33 crore (Rs 24.28 billion), Oriental Bank of Commerce [Rs 1,298.63 crore (Rs 12.99 billion)], Union Bank of India [Rs 855.11 crore (Rs 8.55 billion)], Punjab National Bank [Rs 402.78 crore (Rs 4.03 billion)] and State Bank of Travancore [Rs 296.40 crore (Rs 2.96 billion)].
