Term deposits accounted for a whopping 98% of incremental deposits between April-December 2023, with share of low-cost current account and savings account (CASA) falling to a low of 2% during the period, as more customers parked money in high yielding fixed, term deposits, according to the Reserve Bank of India’s (RBI) quarterly basic statistical returns on deposits-December 2023 report.
Deposits also moved to higher interest rate buckets, with the share of term deposits bearing over 7% interest rate rising to 61% of the total term deposits in December 2023 from 55% a quarter ago and 34% in March 2023. As on February 9, banks’ overall deposits stood at Rs 201.95 trillion.
Overall, term deposits have risen to 60.3% of overall deposits as on December 2023 from 57.2% in March 2023 and 55.2% in March 2022. The share of CASA deposits, meanwhile, after increasing from 42% in 2020, to 44% in 2021 and 45% in June 2022, has moderated to 41.4% as on June 2023.
Separately, banks’ non-food credit grew 20% year-on-year (y-o-y) to Rs 159.99 trillion as of January 26, RBI’s monthly sectoral deployment of credit data showed. Excluding the merger impact of HDFC twins, credit offtake was up 16%.
Bank credit to agriculture and allied activities was up 20% y-o-y to Rs 20.12 trillion in December, higher than 14% a year ago, while credit to industry segment rose 8% y-o-y to Rs 36.54 trillion. Within the industry segment, credit to large corporates rose 6% y-o-y to Rs 26.49 trillion.
Among the services sector, loans to NBFCs rose 16% y-o-y to Rs 15.03 trillion, sharply lower than the 31% y-o-y growth a year ago. This gains importance as the RBI had in November hiked risk weights on bank loans to NBFCs by 25% over and above the risk weight associated with the given external rating in all cases where the risk weight was below 100%.
RBI had also hiked risk weight on unsecured consumer credit, including credit card loans to 125% from 100%. However, data showed that while consumer durable loans’ growth moderated to 14% y-o-y to Rs 24,160 crore in December from 24% growth last year, credit card outstanding growth was flat y-o-y at 31% to Rs 2.58 trillion.