Term Deposits Outpace CASA Growth In September, Shows RBI Data

Term deposits, which offer more attractive return, outpaced the growth in CASA (current account and savings account), and their share in total deposits rose to 61.4% in September 2024 from 59.8% a year ago, as per RBI data. The Reserve Bank of India on Tuesday released Quarterly ‘Basic Statistical Return’ (BSR): Deposits with Scheduled Commercial Banks - September 2024.

"A substantial amount of deposits have shifted to higher interest rate bucket during the latest monetary policy tightening cycle; term deposits bearing over 7% interest rate has increased to 68.8% from 54.7% a year ago," it said.

As per the BSR, bank deposits growth (y-o-y) at 11.7% in September 2024 remained close to that in the previous quarter. Deposits of all population groups (rural/semi-urban/urban/metropolitan) recorded double-digit annual growth.

During the second quarter, 66.5% of the total incremental deposits were contributed by the metropolitan branches, which have 54.7% share in total deposits.

Of the total deposits, 51.4% was held by individuals; female depositors owned nearly 40% of the deposits by individuals, the RBI said.

Deposits growth (y-o-y) of public sector banks inched up to 9% in September 2024 (8.1% in June 2024), which, however, remained well below that for other bank groups at above 15%. The share of senior citizens’ deposits increased to 20.1% in September 2024 from 19.7% a year ago.

According to another quarterly BSR on 'Outstanding Credit of Scheduled Commercial Banks', bank credit growth (y-o-y) moderated to 12.6% in September 2024 from 15.3%, net of merger, in March 2024.

Metropolitan branches of banks, which accounted for 60.6% of loans, recorded lower growth of 11.6%.

Agriculture, industry, housing and personal (non-housing) loans had 11.5%, 23.7%, 16.5% and 14.9% shares, respectively, in credit by non-RRB SCBs; they recorded 13.2%, 10.4%, 13.2% and 17.5% growth (y-o-y), respectively.

"Credit to private corporate sector exceeded the headline credit growth and stood at 16.5% (y-o-y) in September 2024; working capital loans accelerated to 15.3% from 14.1% a year ago," it said.

The share of female borrowers’ loans to individuals has been rising gradually and it stood at 23.6% in September 2024.

Further, public sector banks and private sector banks which have 53.2% and 41.8% shares, respectively, in credit by non-RRB SCBs, recorded 13% and 11.9% increase (y-o-y), respectively, in September 2024.