MUMBAI: Bank deposit rates rose to their highest level in more than two months in September, boosted by a special time-limited scheme launched since July. As per Reserve Bank of India (RBI) data, banks’ deposit growth rate was 11.34% as on September 20, 2024, as against 10.96% as on September 6. Deposit growth increased to 12.55% as of June 28th.
According to the latest data, the growth rate of deposit interest rates from July 12 to September 6 ranged from 10.64% to 11.09%. Meanwhile, credit growth remained stable at around 13% over the period.
Preliminary figures reported by the bank show that deposit growth on an annual basis was higher in the second quarter compared to the first quarter of the financial year.
Bank of Baroda’s global deposits grew by 9.11% in the second quarter compared to 8.83% growth in the first quarter. Similarly, domestic deposits grew by 7.14% in the second quarter compared to 5.25% in the first quarter.
Union Bank of India reported a 9.17 per cent growth in deposits in the September quarter against 8.52 per cent in the June quarter, while IDFC First Bank’s deposits grew by 32.2 per cent in the same quarter. HDFC Bank’s deposits grew steadily by 15%.
Banks have struggled in recent years with deposit growth being slower than credit growth, leading to an asset-liability mismatch. This widening gap is a concern for governments and central banks, calling for banks to focus more on deposit mobilization through innovative products.
