Bank credit up by 17.2 per cent in Q2; deposits grow 9.8 per cent

RBI says credit growth remained broad-based as all population groups, bank groups recorded double-digit growth

Published: 29th November 2022 07:23 AM  |   Last Updated: 29th November 2022 07:23 AM   |  A+A-

Banks, Cash, Money, Credit

Credit growth in the September quarter of 2021 was at a much low 7% (Representational Photo)

By Express News Service

NEW DELHI: Signaling an uptick in private sector investment, bank credit off-take saw a growth of 17.2% in the July-September 2022 quarter, compared with 14.2% in the previous quarter, data released by the Reserve Bank of India (RBI) showed.

Credit growth in the September quarter of 2021 was at a much low 7%. According to the RBI, credit growth remained broad-based as all population groups and bank groups recorded double-digit-annual growth.

Rural areas saw credit growth of 12.7%, while urban and metropolitan regions saw 19.6% and 17.4% growth, respectively. Private sector banks have been more aggressive in pushing loan growth as they saw 21% credit growth during the quarter. Public sector banks recorded 15% credit growth.

Meanwhile, deposit growth remained subdued. Banks saw their aggregate deposit grow by just 9.8% in the September quarter. Aggregate deposits growth has remained in the range of 9.5-10.2% since June 2021. In the September 2021 quarter, banks had posted a deposit growth of 9.5%.

According to RBI, term deposits grew at 10.2% in the September 2022 quarter from 6.4% a year ago, whereas current and savings deposits growth moderated to 8.8% and 9.4% from 17.5% and 14.5%, respectively, a year ago.

The share of savings deposit in total deposits, which increased from 32.4% in June 2019 to a peak of 35.2% in June 2022, moderated marginally to 34.7% in the latest quarter.  Credit-deposit ratio increased further to 74.8% in the September quarter from 73.5% a quarter ago and 70% a year ago.

The lagging growth in bank deposits vis-à-vis credit growth has been a cause of concern for both banks and the banking regulator. Recently, the RBI governor in a meeting with commercial bank chiefs discussed the issue of slow deposit growth.

Deposit growth remains subdued
Deposit growth remained subdued. Banks saw aggregate deposit grow 9.8% in Q2. Aggregate deposit growth has remained in 9.5-10.2% range since June 2021. In Q2 FY22, banks had posted 9.5% deposit growth



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