What is net demand and time liability (NDTL)?

As the name suggest there are three broad components to NDTL.

• Demand Liabilities
• Time Liabilities and
• A Netting Amount that is reduced from the Demand and Time Liabilities.

Additionally Demand and Time Liabilities (DTL) are further broken up into

• DTL to Others
• Other DTL and
• DTL to the banking system

RBI has been empowered to decide on what kind of liabilities fall under DTL. In case of doubt, banks are advised to get a clarification from RBI.

NDTL Base for CRR and SLR

Is CRR and SLR maintained on the same base – viz NDTL?

The short answer is, No.

While the NDTL calculation is broadly the same, there are some important differences when it comes to it’s use to compute CRR and SLR.

Some items are exempt for CRR purposes and so, the base on which CRR is to be maintained is not the same as the base on which SLR is computed. We shall look at these differences in the base a little later.

Demand Liabilities

Demand Liabilities of a bank are liabilities which are payable on demand.

These include

• These include
• demand liabilities portion of savings bank deposits
• margins held against letters of credit / guarantees
• balances in overdue fixed deposits
• cash certificates and cumulative/recurring deposits
• outstanding Telegraphic Transfers (TTs)
• Mail Transfer (MTs)
• Demand Drafts (DDs)
• Unclaimed deposits
• Credit balances in the Cash Credit account and
• Deposits held as security for advances which are payable on demand.

Time Liabilities

Time Liabilities of a bank are those liabilities that are payable other than on demand.

These include

• Fixed deposits
• Cash certificates
• Cumulative and recurring deposits;
• Time liabilities portion of savings bank deposits
• Staff security deposits
• Margin held against letters of credit, if not payable on demand;
• Deposits held as securities for advances which are not payable on demand and
• Gold deposits.

Other demand and time liabilities (ODTL)

ODTL includes:

• Interest accrued on deposits
• Bills payable
• Unpaid dividends
• Suspense account balances representing amounts due to other banks or public
• Net credit balances in branch adjustment account
• Cash collaterals received under collateralized derivative transactions.

Any amounts due to the banking system which are not in the nature of deposits or borrowing are also to be included in other demand and time liabilities. Such liabilities may arise due to items like (i) collection of bills on behalf of other banks, (ii) interest due to other banks and so on.

Fund Flow Statement:

This statement analyses the borrower fund position with reference to the working capital analysis given in MPBF calculations & projected balance sheets. Basic objective of this statement is to capture the funds movement of the borrower for the given period.

Ratio Analysis:

This statement gives the key ratios to the banker based on the CMA data prepared. Basic key ratios are Gross Profit ratio, Net profit ratio, Current ratio, Net worth, Debt/Equity ratio, etc.