Banks' deposit growth dips to 10.6%; credit growth at 13.9% as on June 28

Credit up by 13.9% Y-o-Y as on Jun 28

Deposit growth of commercial banks further slowed down to 10.64 per cent for the fortnight ending June 28, latest data released by the Reserve Bank of India (RBI) showed. Credit growth also declined during the period.

According to the data, scheduled commercial banks’ credit rose by 13.88 per cent year-on-year (Y-o-Y) to Rs 163.8 trillion as on June 28. The deposit base of banks expanded by 10.64 per cent Y-o-Y to Rs 211.95 trillion.

The growth figures exclude the impact of the merger of HDFC with HDFC Bank, which came into effect on July 1, 2023.

Deposit growth for the previous fortnight ending on June 14 was 12.1 per cent while credit growth was 15.6 per cent during the period.

 

In a recent meeting with bank chief executives, RBI governor Shaktikanta Das had flagged the issue of persisting gap between credit and deposit growth.

Banks are expected to take additional efforts to shore up their liability franchise and ensure that deposit growth does not constrain the credit offtake, CareEdge Ratings said in a note.

CareEdge, in its analysis early this month, said the Credit to Deposit (C/D) ratio has been generally hovering around 80 per cent since September 2023. The C/D ratio stood at 79.9 per cent for the fortnight (June 14, 2024). The HDFC merger has mainly driven this increase. If we exclude the merger impact, the C/D ratio for the fortnight ending June 14, 2024 stood at 77.9% compared to 75.5% on June 16, 2023.