Statsguru: What bank deposits data tells us about Covid disruption

The Covid-19 disruption has hit almost all areas of the economy and the banking sector has not remained immune. In fact, the way bank deposits have evolved since 2020 says a lot about where the Indian economy is headed because banks are the chief source of finance.
 
Deposits grew fast in the period when consumption got hit due to restrictions and precautionary behaviour. But credit growth remains muted because of lower economic activity. In fact, the gap between non-food bank credit growth and aggregate deposits growth widened to the highest level since demonetisation in May (chart 1).