In a sharp contrast to the national trend of higher deposit growth in FY17, in which demonetisation was announced, the southern region has shown a dip in deposit growth, according to a report.
Overall household deposits at the country level grew 14.1 per cent during the fiscal, up from the 12.3 per cent in the previous fiscal. However, the southern region household deposits growth rate dipped to 13.3 per cent for FY17, against 13.8 per cent in the previous year, data showed.
“Central, northern and western India reported accelerating trends in deposit growth while the south showed a decelerating trend,” a report by domestic brokerage Kotak Securities said. Karnataka, Tamil Nadu and Telangana seemed to be major contributors for the decline in household deposit growth rates, it noted.
In Karnataka, household deposit growth dipped to 11.5 per cent in FY17 from the year-ago’s 13.5 per cent; in Tamil Nadu, which had seen state elections in the previous fiscal, the growth rate declined to 12.2 per cent in FY17 from 16.7 per cent. Telangana saw a narrowing of household deposit growth rate to 16.4 per cent from 23.7 per cent.
Meanwhile, with the deepening of banking presence, the central and eastern parts of the country have witnessed a surge in saving deposits over the last few years, the report said.
“The share of these (central and eastern) regions increased to 32 per cent of total household deposits in FY17 compared to 28 per cent in FY12,” it said, attributing it to the banks presence in the pockets.