Business Standard

Bank deposit growth touches six-yr high of 13.5% in fortnight ended Aug 11

Over the past few months, deposit growth has been half of credit growth, and many lenders have had to hike rates to attract depositors

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Press Trust of India Mumbai

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Deposit growth in banks reached a six-year high of 13.5 per cent in the fortnight ended August 11, a report said on Monday.
Care Edge Ratings said it is the first time since 2017 that the deposit growth has crossed 12.5 per cent.
Over the past few months, deposit growth has been half of credit growth, and many lenders have had to hike rates to attract depositors.
Credit growth increased 19.7 per cent during the fortnight, driven by the merger between HDFC and HDFC Bank, the report said, adding that it would have been 14.8 per cent if not for the USD 40 billion-amalgamation.
In case of deposit growth, the merger impact was more limited, the rating agency said.
According to the rating agency, had the HDFC deal not happened, the deposit growth rate would have been 12.8 per cent because of the mortgage major HDFC's reliance on other avenues beyond deposits for its liabilities.
The scrapping of Rs 2,000 denomination notes and their subsequent depositing had helped banks with deposits, but it has dropped sequentially, the ratings agency said.
It said the outlook for bank credit offtake remains positive, supported by factors such as economic expansion, increased capital expenditure, implementation of the Production-Linked Incentive (PLI) scheme, and a push for retail credit.
The personal loan segment is expected to perform well in FY24 but elevated interest rates and global uncertainties could potentially impact credit growth in the country, the report added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Aug 28 2023 | 11:11 PM IST

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