Australian companies are holding off on investment deals with banks.

The Australian Prudential Regulation Authority (APRA) reported financial institutions to have bank loans and advances of $54,657 million in July compared to $60,974 million in January. A 2 percent drop in the balance of corporate loans could be seen since January this year.

Moreover, a reverse in the balance of corporate loans could also be seen in the books of the big banks since January 2010.

Australia and New Zealand Banking Group (ANZ) chief Mike Smith disclosed recently that billions of dollars of investment projects and even corporate deals have been placed on hold. The green light for the investments would seem to depend on when apprehensions about the economic recovery would wane.

In the meantime, banks will continue to enjoy a surge in deposits because of their high interest rates. Household deposit growth has increased by 4.5 percent since the start of the calendar year.

APRA records show the ANZ to have a 4.6 percent growth in household deposits. National Australia Bank and Commonwealth Bank came in next with 4 percent. Westpac and St. George's combined data trail behind with a deposit growth of 3.8 percent.

The fresh funds has allowed banks not to rely heavily on costly wholesale borrowings to fund their lending books.