Banks’aggregate deposits recorded some moderation, growing at 9.4 per cent as on December 16, 2022 even as their credit growth touched a decadal high of 17.4 per cent as on this date, according to the Financial Stability Report.
Banks’ deposits and advances had seen a year-on-year growth of 9.8 per cent and 17.5 per cent, respectively, as at September-end 2022.
In the reporting fortnight ended December 16, bank deposits declined ₹1,71,470 crore, per RBI’s Scheduled Banks’ Statement of Position in India. However, incremental credit was up ₹51,028 crore.
A break-up of the decline in bank deposits shows that demand and time deposits saw a de-growth of ₹57,332 crore and ₹1,14,137 crore, respectively.
Referring to the decline in deposits, banking expert V Viswanathan said that inflationary conditions may be prompting people to spend more. Further, the very low rate of interest on savings bank deposits (less than 3 per cent) and the high rates offered on fixed deposits are not adequate to encourage their savings.
“Scheduled commercial banks’ credit growth (year-on-year, which started picking up during H2 (October-March): 2021-22, sustained its momentum and gathered pace to touch a decadal high of 17.4 per cent as on December 16, 2022, a level last observed during 2011.
“The increase has been broad-based across geography, economic sectors, population groups, organisations, type of accounts and bank groups,” the FSR said.