India’ banking system reported total deposits of Rs 100 lakh crore for the first time ever in September, data released by the RBI show, reports Shakti Patra in Mumbai. With demand deposits crossing R10 lakh crore and time deposits crossing the Rs 90 lakh crore mark, the month saw the highest-ever monthly rise of Rs 5.32 lakh crore — more than the total deposits in the banking sector 20 years back.
Although Rs 100 lakh crore is a big milestone, historical data reveal deposit growth slowed down considerably over the last five years. While banks’ deposits grew at a CAGR of 12.88% in the last five years, they had grown at a CAGR of 19.9% in the previous five years. The slowing down in the pace of deposit growth was in line with the slowing down of M3 or broad money supply in the economy. An analysis of historical data suggests that while M3 in India grew at well over 20% (y-o-y) for several years in the middle of last decade, it has been growing in the sub-teens in recent years.
In the fortnight ended September 16, M3 stood at R121.9 lakh crore, having grown by 10.9% over the same quarter last year.