Bank credit and deposit growth decelerates

Public sector banks together accounted for 73.3% share in aggregate deposits

Credit and deposits in the banking system continue to grow at a tepid pace. According to Reserve Bank of India (RBI) data, growth in aggregate deposits decelerated to 10.9 per cent at the end of December 2014 from 15.4 per cent a year ago.

In the same period, bank credit grew only by 10.1 per cent as compared to 14.2 per cent in the period under review.

“The deceleration in aggregate deposits as well as gross bank credit was broad based and observed across all population groups,” RBI said.

Credit growth has been sluggish as corporates have been relying on commercial paper instead of bank credit to raise funds. Deposits have also been growing in a slow lane as banks flush with excess liquidity have not been aggressively mobilising deposits.

Public sector banks together accounted for 73.3 per cent share in aggregate deposits and 71.2 per cent share in gross bank credit followed by private sector banks at 19.2 per cent and 21.0 per cent, respectively at December-end, 2014.