The overall deposits in banks grew 11% year-on-year (y-o-y) in FY17, driven largely by current account and savings deposits after demonetisation. The market share of low-cost CASA deposits of private banks grew from 15.5% in FY06 to 24.7% in FY17. In contrast, the share of state-owned banks in CASA deposits fell to a decade low level of 41.9% in FY17. Data from RBI’s composition and ownership pattern of deposits with scheduled commercial banks as on March 31, 2017, show households’ share in total deposits grew across all types of deposits.
Households still invest a large chuck of their money in fixed deposits. Proprietary and partnership, a segment within households which is a proxy for small and medium enterprises, reported 46% y-o-y growth in current account deposits. Unlike in the past, more than two-thirds of individuals’ incremental deposits were in the form of savings deposits.
Households and government sectors contributed the entire incremental deposits, whereas deposits of financial and foreign sectors shrank. There was an outflow of non-resident deposits from foreign banks during the year. State-wise, Maharashtra retained the top position in its share in bank deposits. Uttar Pradesh remained the highest contributor to incremental households’ deposits, followed by Maharashtra and West Bengal.
The top 50 centres in the country contribute about 62% of the total deposits of banks. Interestingly, the share of deposits from rural and semi-urban areas is gradually increasing indicating greater financial inclusion.