Bank deposits increase 12%: RBI

RBI
RBI

Bank deposits increased by 11.9 percent year on year in 2020-21, compared to 8.8 percent in 2019-20, RBI statistics indicated. The increase was attributed to strong growth in current account and savings account (CASA) deposits.

According to the Reserve Bank of India’s (RBI) Deposits with Scheduled Commercial Banks – March 2021 data issued on Thursday, the share of CASA deposits climbed to 43.7 percent in March 2021 from 41.7 percent a year ago.

The household sector accounted for 64.1 percent of total deposits among institutional categories.

Individuals, especially Hindu Undivided Families (HUFs), were the bulk of the household sector, accounting for 55.8 percent of aggregate deposits, according to the report.

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Non-financial corporations boosted their bank deposits by 18.8% between 2020 and 2021, increasing their percentage of total deposits to 16.2% in March 2021.

Banks with metropolitan branches, which account for more than half of total deposits, accounted for 59.6 percent of additional deposits in 2020-21, up from 43.2 percent the previous year.

Three big states – Maharashtra, Uttar Pradesh, and Karnataka – held more than a third of the overall household sector’s outstanding deposits and more than 40% of its incremental deposits in 2020-21, according to the statistics.

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Private sector banks’ share of total bank deposits continued to grow at the expense of public sector banks, reaching 30.5 percent (up from 29.5% a year before), accounting for over half of deposits held by financial and non-financial firms, as well as the rest of the world.

Due to the decline in interest rates on term deposits, the share of term deposits with an interest rate less than 6% increased to 69 percent in March 2021, up from 21.3 percent a year before.

The interest rate range of 5% to less than 6% has the biggest concentration of term deposits at 36.8%, it stated.

The report indicated that short-term deposits (with an initial maturity of less than one year) increased to 32.8 percent from 25.4% a year ago.

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