Incremental bank deposit growth outpaced credit growth in the fortnight ended December 2, 2022, as banks raised deposit rates in the face of tight liquidity conditions and robust credit growth.
Bank deposits and credit were up by ₹2,27,725.63 crore and ₹1,61,622.19 crore, respectively, in the reporting fortnight.
However, on year-on-year basis, deposit growth (9.56 per cent) lagged credit growth (17.22 per cent) as on December 2.
Higher rates
Madan Sabnavis, Chief Economist, Bank of Baroda, observed that the robust deposit growth is on account of banks increasing deposit rates. He noted that banks would have mobilised lot of resources via bulk deposits, certificate of deposits and retail deposits.
He assessed that the healthy credit growth could be on account of demand from the manufacturing and services (non-banking finance companies) sectors.