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Informist, Friday, Sep 6, 2024

--RBI: Banks' loans as on Aug 23 up 648.61 bln rupees on fortnight 

--RBI: Banks' loans as on Aug 23 at 169.45 trln rupees, up 13.59% YoY 

--CONTEXT: Banks' loans were up 13.60% YoY as on Aug 9 

--RBI: Bks' deposits as on Aug 23 down 45.15 bln rupees on fortnight 

--RBI: Bks' deposits as on Aug 23 at 213.24 trln rupees, up 10.83% YoY 

--CONTEXT: Banks' deposits were up 10.9% YoY as on Aug 9 

--RBI: Bks' investments on Aug 23 up 374.69 bln rupees on fortnight 

--RBI: Bks' investments on Aug 23 at 63.66 trln rupees, up 7.86% YoY 

--CONTEXT: Banks' investments were up 6.99% YoY as on Aug 9 

MUMBAI – The deposits of Indian banks fell by 45.15 bln rupees during the fortnight ended Aug 23, data from the Reserve Bank of India showed. Loan books of banks during the same period grew 648.61 bln rupees.

When compared with the numbers from a year ago, loan book growth remains higher than that of bank deposits. Bank deposits grew 10.83% on year to 213.24 trln rupees as of Aug 23. Bank loans rose 13.59% on year to 169.45 trln rupees as of Aug 23. However, the absolute on-year increase in deposits was slightly higher than in credit.

In the past few months, top RBI officials on several occasions have flagged the risk that India's banking sector could face significant liquidity risks owing to the widening credit-deposit gap, which is driven by households shifting their savings to other higher-yielding financial assets.

At the announcement of the latest Monetary Policy Committee meeting outcome on Aug 8, RBI Governor Shaktikanta Das also emphasised the need for banks to focus on mobilising household financial savings through innovative products and services.

Indian banks are seen rushing to attract deposits through higher rates and other schemes amid growing concerns over the widening gap between credit and deposit growth rates.

State Bank of India, the country's largest bank by assets, is offering an annual interest rate of 7.25% for deposits for 444 days since Jul 15 as part of its "Amrit Vrishti" scheme to enhance deposit growth. Similarly, HDFC Bank has offered new deposit products with interest rates of 7.35% per annum for a 35-month tenor and 7.40% per annum for a 55-month tenor.

In the fortnight to Aug 23, investments by banks rose 374.69 bln rupees to 63.66 trln rupees, and were up 7.86% from a year ago.

Scheduled Commercial Banks (including RRBs):

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All Scheduled Banks:

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* Provisional figures incorporated in respect of such banks as have not been able to submit final figures.
Notes :

    (A) Demand and Time Liabilities do not include borrowings of any Scheduled State Co-operative Bank from State Government and any reserve fund deposits maintained with such banks by any co-operative society within the areas of operation of such banks.
    ** This excludes deposits of Co-operative Banks with Scheduled State Co-operative Banks. These are included under item II (a).
    @ Other than from Reserve Bank, National Bank for Agriculture and Rural Development and Export Import Bank of India.
    (B) The figures relating to Scheduled Commercial Banks' Borrowings in India from the Reserve Bank and balances with the Reserve Bank are those shown in the statement of affairs of the Reserve Bank. Borrowings against usance bills and/ or promissory notes are under Section 17(4)(c) of the Reserve Bank of India Act, 1934.
    # This excludes advances granted by Scheduled State Co-operative Banks to Co-operative banks. These are included under item VIII (a).
    + Includes Treasury Bills, Treasury Deposits, Treasury Savings Certificates and postal obligations.
    $ Includes advances granted by Scheduled Commercial Banks and State Co-operative Banks to Public Food Procurement Agencies viz. Food Corporation of India, State Governments and their agencies under the Food Consortium.  

The expression 'Banking System' or 'Banks' means the banks and any other financial institution referred to in sub-clauses (i) to (vi) of clause (d) of the explanation below Section 42(1) of the Reserve Bank of India Act, 1934.

No. of scheduled commercial banks as on current fortnight: 135

End

Reported by Srijita Bose

Compiled by Shahid Shaikh

Edited by Deepshikha Bhardwaj

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