Deposits of all scheduled banks declined in the reporting fortnight ended August 23 even as their advances recorded a robust growth, indicating that the gap between their growth continues to be wide.
Deposit growth of all scheduled banks has been lagging credit growth in the last few quarter, with the former de-growing by ₹5860 crore and the latter expanding by ₹66,655 crore in the reporting fortnight, per RBI data.
Given the asymmetrical growth in deposits and credit, Banks are considering developing innovative products to win back depositors, who have parked money in alternative investments. Mutual funds and equity markets are currently offering better returns than banks deposits.
Bankers’ cautioned investors about the risk of losing money should markets correct from the current highs. They emphasised that deposits ensure safe and periodic returns.
Deposit growth of all scheduled banks has been lagging credit growth in the last few quarter, with the former de-growing by ₹5860 crore and the latter expanding by ₹66,655 crore in the reporting fortnight, per RBI data.
Given the asymmetrical growth in deposits and credit, Banks are considering developing innovative products to win back depositors, who have parked money in alternative investments. Mutual funds and equity markets are currently offering better returns than banks deposits.
Bankers’ cautioned investors about the risk of losing money should markets correct from the current highs. They emphasised that deposits ensure safe and periodic returns.
