New Delhi
According to a report released on Tuesday, bank deposits rose by 8.6% compared to December 2023, reaching Rs 218.1 lakh crore as of October 18. This marks the first time in 30 months that deposit growth has surpassed credit offtake on an annual basis. The rise in deposits is largely due to increased term deposit rates offered by Scheduled Commercial Banks (SCBs), as noted by CareEdge Ratings.
In total, deposits have increased by Rs 17.3 lakh crore over the past nine months. The report indicates that banks have been actively working to enhance their liability franchises, sourcing funds through certificates of deposit at higher costs.
The credit-deposit (CD) ratio has remained stable at around 80% since September 2023, with a slight increase to 79.0% for the period ending October 18, compared to 79.5% in December 2023. On the credit side, offtake grew by 8.0% compared to December, reaching Rs 172.4 lakh crore as of the same date.
The report highlighted that mortgages and micro, small, and medium enterprises (MSMEs) contributed significantly to this growth. However, the slower growth rate this year can be attributed to a high base effect from previous mergers and the Reserve Bank of India’s regulatory measures. The Short-term Weighted Average Call Rate (WACR) has dropped to 6.43% as of October 18, indicating surplus liquidity in the market. Year-on-year, credit growth was 11.7%, while deposits grew by 11.8%.
