For the first time in the last few months, incremental deposit growth surpassed credit growth in the fortnight ended November 4 as banks aggressively raised deposit rates to garner resources in the wake of robust credit growth, reported Business Line.
Incremental deposits of all scheduled banks grew by ₹1,68,386.7 crore in the fortnight ended November 4, according to RBI data. During the same period, incremental credit rose by ₹44,119.16 crore.
In the preceding fortnight ended October 21, incremetal credit was up by ₹26,610.67 crore while deposits de-grew by ₹64,098.13 crore.
As per RBI data, as on November 4, interest rate on term deposits of over one year duration was higher in the 5.50/7.25 per cent band against 5.50/6.50 per cent as on October 21, 2022.
That deposit growth is lagging credit growth is underscored by the fact that as on November 4, year-on-year (y-o-y) deposit growth and credit growth stood at about 8 per cent and 16.81 per cent, respectively. It may be pertinent to mention here that issues relating to lagging growth in deposits vis-à-vis credit growth and asset quality, among others, were discussed at RBI Governor Shaktikanta Das’ meeting with top bankers on Wednesday.