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Surge in Deposits of Private Sector Banks

Private Sector Banks See a Steady Surge in Deposit Base

By Ashish Mitra --
Saturday, 12 Dec, 2020

A data of Capitaline has informed that a wider network, better capital position and stronger market perception are helping larger private sector banks grow their deposit base faster than their smaller peers especially the vintage private banks.

Strong movements at some banks and non-banks in the past one year that attracted regulatory interventions could have led to greater faith in bigger banks, the data said. For instance, deposits at HDFC Bank and ICICI Bank as on 30 September were 20 per cent higher than a year ago despite the two banks already having large outstanding deposits.

On an absolute basis, HDFC Bank saw a growth of Rs.2.07 trillion while that of deposits of ICICI Bank surged by Rs.1.36 trillion in the 12 months to September 2020, the data said.

Other private lenders like Axis Bank and Kotak Mahindra Bank also saw their deposits rise by Rs. 51,496 crore and Rs. 28,493 crore respectively, as on 30 September from a year earlier, the data further informed.

However, the picture is quite different for some smaller old private banks like South Indian Bank, Karur Vysya Bank, and the erstwhile Lakshmi Vilas Bank, with all three seeing a decline in total deposits.

Deposits at City Union Bank and RBL Bank rose a little above 2% in the same period.

As on September 25, bank deposits rose 10.51 per cent as against a 5.14 per cent rise in bank credit highlighting lenders’ reluctance to lend as well as the lack of credit demand.

Deposit growth has since moved to 10.89 per cent and credit improved marginally to 5.82 per cent as on 20 November.

India’s household financial savings grew 21.4 per cent of gross domestic product (GDP) in the June quarter from 7.9 per cent in the year earlier, according to data released by the Reserve Bank of India’s November bulletin.

Private Sector Banks See a Steady Surge in Deposit Base. A data of Capitaline has informed that a wider network, better capital position and stronger market perception are helping larger private sector banks grow their deposit base faster than their smaller peers especially the vintage private banks. 
 
Strong movements at some banks and non-banks in the past one year that attracted regulatory interventions could have led to greater faith in bigger banks, the data said. For instance, deposits at HDFC Bank and ICICI Bank as on 30 September were 20 per cent higher than a year ago despite the two banks already having large outstanding deposits.

On an absolute basis, HDFC Bank saw a growth of  Rs.2.07 trillion while that of deposits of ICICI Bank surged by Rs.1.36 trillion in the 12 months to September 2020, the data said.

Other private lenders like Axis Bank and Kotak Mahindra Bank also saw their deposits rise by Rs. 51,496 crore and Rs. 28,493 crore respectively, as on 30 September from a year earlier, the data further informed.

However, the picture is quite different for some smaller old private banks like South Indian Bank, Karur Vysya Bank, and the erstwhile Lakshmi Vilas Bank, with all three seeing a decline in total deposits.

Deposits at City Union Bank and RBL Bank rose a little above 2% in the same period.

As on September 25, bank deposits rose 10.51 per cent as against a 5.14 per cent rise in bank credit highlighting lenders’ reluctance to lend as well as the lack of credit demand.

Deposit growth has since moved to 10.89 per cent and credit improved marginally to 5.82 per cent as on 20 November.

India’s household financial savings grew  21.4 per cent of gross domestic product (GDP) in the June quarter from 7.9 per cent in the year earlier, according to data released by the Reserve Bank of India’s November bulletin.