MUMBAI: Buoyed by the special limited period schemes launched since July, banks’ deposit rates grew at a more than two-month high in September. According to Reserve Bank of India (RBI) data, banks’ deposit growth stood at 11.34% as on September 20, 2024, compared to 10.96% as of September 6. The deposit accretion rate grew at 12.55% as of June 28.
The deposit rate growth ranged from 10.64% to 11.09% between July 12 and September 6, according to the latest data. On the other hand, credit growth remained stable at about 13% over the period.
The provisional numbers reported by banks have shown that deposit growth rate on a yearly basis was higher in the second quarter of the current financial year compared to the first quarter.
Bank of Baroda saw 9.11% rise in its global deposits in Q2, compared to 8.83% rise in Q1. Similarly, its domestic deposits rose 7.14% in Q2 as against 5.25% in Q1.
Union Bank of India reported a 9.17% increase in deposits in the September quarter as against 8.52% in the June quarter, while IDFC First Bank’s deposits grew 32.2% in the quarter. HDFC Bank saw a steady deposit growth at 15%.
Banks have been struggling with slower deposit growth compared to credit growth over the past few years, leading to asset liability mistmatches. This rising gap has been a matter of concern for the government and the RBI, which has asked banks to focus more on deposit mobilisation through innovative products.
Meanwhile, Care Ratings in a note said credit growth is trending down and continues to converge with deposit growth on an annual basis. Further, if growth rate is compared with December 2023, deposit and credit growth are generally in line with each other now.
While credit offtake increased 7.3% over December 2023 and touched `171.2 trillion as of September 20, deposits rose at 7.1% to reach `215.1 trillion during this period, driven by growth in time deposits.
In absolute terms, over the past nine months, credit offtake expanded by `10.9 trillion to reach `171.3 trillion as of September 20. Deposits rose at 7.1% compared to December 2023 and reached `215.1 lakhs crore as of September 20, deposits have expanded by `14.2 trillion. Deposits have remained prominent in FY25 as banks have intensified efforts to strengthen their liability franchise.
Credit growth remains stable at 13% in Jul-Sept
Deposit rate growth ranged from 10.64% to 11.09% between Jul 12 and Sept 6, as per latest data. On the other hand, credit growth remained stable at 13% over the period. Provisional numbers reported by banks have shown deposit growth rate on a yearly basis was higher in Q2.
