)
Even as credit growth showed an impressive growth in the fortnight ended August 23 with the banks clocking 17 per cent rise, deposit growth continued to languish way below the credit, sliding for the first time below 13 per cent this financial year.
The credit growth was 17.06 per cent while the deposit growth was 12.99 per cent at the fortnight ended August 23, according to data released by the Reserve Bank of India (RBI).
Last time credit grew above 17 per cent was in November 2012 when loan growth in the banking system was 17.05 per cent in the fortnight ended November 30. Deposits also slid below 13 per cent growth for the first time since February this year when they grew by 12.73 per cent in the fortnight ended February 22.
During the fortnight, the banks disbursed new credit of Rs 20,413 crore while they accumulated deposits worth Rs 9,331 crore.
In the last few days, though the banks have raised deposit rates and lending rates upwards as a result of liquidity tightening measures by the central bank, the data seems to show a contrast picture. As a result of higher rates, loan growth could have come down and deposit growth should have been higher, given the higher rate of interests the banks are offering on deposits.
The country’s largest lender, State Bank of India, had raised its bulk deposit rates by up to 175 basis points for deposits below one year tenure.
The bank, however, has left lending rates untouched for now as it feels whatever little demand is there will also recede if lending rates are hiked.
Pratip Chaudhuri, chairman, SBI, had said last week: “New projects have stopped, new project inquiries have stopped, it is almost at a standstill.” Currently, SBI’s base rate stands at 9.7 per cent which is the lowest in the industry.
