Surge in bank deposits due to govt borrowings, not savings: India Ratings

While deposit accretion has been strong, there has been shift in the profile of banks accruing them

The sudden surge in bank deposits is due to a rise in overall borrowings of both the central and state governments, rather than increased savings, according to India Ratings and Research (Ind-Ra).

Also, while deposit accretion has been strong, there has been shift in the profile of the banks accruing them. Depositors are focusing on quality and safety to differentiate between banks, according to India Ratings.  

Deposits in banking system have grown by 10.6 per cent (year-on-year basis) till May 2020, up from 10.1 per cent in May 2019. The credit growth has almost halved to 6.3 per cent in