Term deposits outpace CASA growth in September: RBI data

Term deposits, which offer more attractive return, outpaced the growth in CASA (current account and savings account), and their share in total deposits rose to 61.4 per cent in September 2024 from 59.8 per cent a year ago, as per RBI data.

The Reserve Bank on Tuesday released Quarterly ‘Basic Statistical Return' (BSR): Deposits with Scheduled Commercial Banks - September 2024.

"A substantial amount of deposits have shifted to higher interest rate bucket during the latest monetary policy tightening cycle; term deposits bearing over 7 per cent interest rate has increased to 68.8 per cent from 54.7 per cent a year ago," it said.

As per the BSR, bank deposits growth (y-o-y) at 11.7 per cent in September 2024 remained close to that in the previous quarter.
Deposits of all population groups (rural/semi-urban/urban/metropolitan) recorded double-digit annual growth.

During Q2:2024-25, 66.5 per cent of the total incremental deposits were contributed by the metropolitan branches, which have 54.7 per cent share in total deposits.

Of the total deposits, 51.4 per cent was held by individuals; female depositors owned nearly 40 per cent of the deposits by individuals, the RBI said.

Deposits growth (y-o-y) of public sector banks inched up to 9 per cent in September 2024 (8.1 per cent in June 2024), which, however, remained well below that for other bank groups at above 15 per cent.

The share of senior citizens' deposits increased to 20.1 per cent in September 2024 from 19.7 per cent a year ago.

According to another quarterly BSR on 'Outstanding Credit of Scheduled Commercial Banks', bank credit growth (y-o-y) moderated to 12.6 per cent in September 2024 from 15.3 per cent, net of merger, in March 2024.

Metropolitan branches of banks, which accounted for 60.6 per cent of loans, recorded lower growth of 11.6 per cent.

Agriculture, industry, housing and personal (non-housing) loans had 11.5 per cent, 23.7 per cent, 16.5 per cent and 14.9 per cent shares, respectively, in credit by non-RRB SCBs; they recorded 13.2 per cent, 10.4 per cent, 13.2 per cent and 17.5 per cent growth (y-o-y), respectively.

"Credit to private corporate sector exceeded the headline credit growth and stood at 16.5 per cent (y-o-y) in September 2024; working capital loans accelerated to 15.3 per cent from 14.1 per cent a year ago," it said.

The share of female borrowers' loans to individuals has been rising gradually and it stood at 23.6 per cent in September 2024.

Further, public sector banks and private sector banks which have 53.2 per cent and 41.8 per cent shares, respectively, in credit by non-RRB SCBs, recorded 13 per cent and 11.9 per cent increase (y-o-y), respectively, in September 2024.