Deposits of scheduled commercial banks continue to decline since the beginning of the current financial year, as banks repay the huge deposits they picked up towards the end of March to meet annual targets.
According to data provided by the Reserve Bank of India (RBI), bank deposits stood at Rs 53,16,009 crore as on May 6, compared with Rs 53,19,431 on April 22. Bank deposits earlier rose to Rs 53,24,952 crore on April 8. As on May 6, the growth in deposits compared to same period last year stood at 17 per cent.
“Deposits may have declined because of the repayment of institutional deposits, since banks are now comfortable on the liquidity front,” said a senior official of a public sector bank. Banks had issued more than Rs 1 lakh crore of certificates of deposits in the last quarter of 2010-11. Most of these may not have been rolled over, he said.
However, bank advances saw a rise. Bank credit grew to Rs 38,383 crore in the fortnight ended May 6, a rise 22.5 per cent compared to same period last year. While banks had achieved a more-than-expected credit growth last year, they were unable to garner as many deposits as expected by RBI. Credit growth last year stood at around 21 per cent, against the projection of 20 per cent and deposit growth was around 16 per cent, compared with the estimate of 18 per cent at the end of March 2011.
RBI has now lowered both both its credit growth as well as its deposit growth rate estimates. RBI has projected a 17 per cent growth in deposits and a 19 per cent growth in bank advances for the current financial year.
