Even though there was a decline in inflation figures in the middle of the year, RBI did not make any change in the policy rate. Due to which the interest rates on fixed deposits remained high. Now this planning of RBI has worked. Due to better interest rates, the share of fixed deposits in total deposits in banks has increased to more than 61 percent compared to a year ago. RBI’s MPC has not made any change in interest rates from February 2023.
Because of which the repo rate is 6.50 percent. Due to high repo rate, banks increase the interest rates of home loans and other retail loans. On the other hand, to increase bank deposits, banks also increase schemes like fixed deposits. So that in times of inflation there is less expenditure and more savings. Let us also tell you what kind of things have come to light in the recent report of RBI.
FD share increased
According to the data of Reserve Bank of India (RBI), common people are giving preference to fixed deposits. The growth of fixed deposits with attractive interest has surpassed the growth of current accounts and savings accounts (CASA). Its share in total deposits increased to 61.4 percent in September this year from 59.8 percent a year ago.
RBI released quarterly Basic Statistical Return (BSR): Deposits with Scheduled Banks – September 2024. It has been said in this report that with the tight monetary policy, a large amount of deposit amount has been transferred to fixed deposits with high interest rates. FDs with interest rates above 7 percent have increased to 68.8 percent, which was 54.7 percent a year ago.
Such were the figures of deposits
According to the data, bank deposit growth stood at 11.7 percent on an annual basis in September 2024. This is almost equal to the previous quarter. Double digit annual growth was recorded in the deposits of all categories of population (rural/semi-urban/urban/metropolitan). During the second quarter of the financial year 2024-25, branches located in metropolitan cities contributed 66.5 percent of the increase in total deposits. Their share in total deposits was 54.7 percent.
According to RBI, 51.4 percent of the total deposits were kept by individuals. Women depositors account for about 40 percent of personal deposits. Deposit growth in public sector banks increased by 9 percent on an annual basis in September, 2024, which was 8.1 percent in June, 2024. However, it is below 15 percent in other bank groups. The share of deposits of senior citizens increased to 20.1 percent in September 2024, which was 19.7 percent a year ago.
There was also a reduction in bank loans
According to a second BCR on outstanding loans of scheduled banks, bank credit growth declined to 12.6 percent on an annual basis in September, 2024 from 15.3 percent in March, 2024. The share of loans of metropolitan branches of banks was 60.6 percent. These branches registered a low growth of 11.6 percent. The share of loans of non-RRB scheduled commercial banks in agriculture, industry, housing and personal (non-housing) loans was 11.5 per cent, 23.7 per cent, 16.5 per cent and 14.9 per cent respectively.
They registered an annual growth of 13.2 percent, 10.4 percent, 13.2 percent and 17.5 percent respectively. It said that the credit growth of the private corporate sector increased to 16.5 percent in September 2024. Working capital loan increased to 15.3 percent, which was 14.1 percent a year ago. The share of women borrowers in personal loans is gradually increasing and it stood at 23.6 percent in September 2024.