Banks deposit growth down for the first time in months: RBI

Bank credit continued its tepid growth yet again, notching up a low 11.17% to Rs 62,72,621 crore, according to the latest Reserve Bank of India data.

For the first time deposit growth, after running ahead of credit throughout the year, came down to 12% to Rs 82,76,945 crore for the fortnight ended October 31, RBI data said. In the corresponding fortnight last year, bank credit stood at Rs 56,41,910 crore, the RBI said in its fortnightly report. In the reporting period, deposits grew 12% to Rs 82,76,945 crore compared to Rs 73,92,540 crore in the year-ago period.

It may be noted that deposit growth has been pacing up by three to five percentage points more than credit growth throughout this fiscal, leaving banks to struggle with excess liquidity and also forcing them to slash term deposit rates. Credit has not been growing since corporates have been keeping off investments and prefer the overseas debt market to raise working capital loans for their foreign operations.

Demand deposits jumped by 13.12% to Rs 7,57,519 crore in the reporting period from Rs 6,69,659 crore during the same period last year. Time deposit rose by 12% to Rs 75,19,415 crore in the period as against Rs 67,22,880 crore during the same period last year.