Banks mop up deposits worth Rs 1 lakh cr

Deposits grow 13.14% and credit by 15.41%

Even as the last-minute scramble to meet year-end deposit targets is on, bank deposits grew 13.14 per cent year-on-year (Y-o-Y), according to Reserve Bank of India (RBI) data. During the fortnight ended March 8, banks mopped up deposits worth about Rs 1 lakh crore, while they disbursed fresh credit (loan) worth Rs 58,000 crore, growing 15.41 per cent y-o-y.

RBI’s projection for credit and deposit growth is 16 per cent and 15 per cent, respectively, for the current financial year.

The growth of credit and deposits in the system has been at a lower pace in FY13. According to Bloomberg data, credit growth was 19.35 per cent as of March 30, 2012 ,while that of deposits was 17.37 per cent. In the first fortnight of the year ended April 6, credit growth fell to 18.73 per cent and deposit growth plunged to 14.31 per cent.

According to experts, usually banks resort to window-dressing to meet year-end targets and the credit and deposits come down immediately in April.

This year, banks are comfortable with the credit growth as it is on projected levels.

However, deposits haven’t grown by 15 per cent in a single fortnight this year. This has made top banks to increase deposit rates.

The country’s largest lender, State Bank of India, raised deposit rates from this month although it was having an excess liquidity. The bank said it increased deposit rates in anticipation of liquidity pressure in March as credit demand is generally higher in the last month of the financial year.

Yesterday, RBI had said the government’s credit balance was higher than the normal levels and that banks were drawing more from the liquidity window.

N Seshadri, executive director, Bank of India, said, “The deposits generally rise in system at the March end as rollover of deposits happen and banks will achieve projected deposit growth target by RBI.” Credit growth is on projected levels, he said.