Data
Indian Banking Sector Changes: Deposit Growth Surpasses Credit Growth for first time since last 2 years, Check Data!
For the first time since April 8, 2022, the Indian banking sector has observed deposit growth outpacing credit growth, as of October 18, 2024. This shift may influence future lending policies and financial strategies for banks.
Key Highlights
- Year-to-Date (YTD) Trends
Deposits have consistently grown faster than credit YTD. Deposit growth reached 6.5% compared to last year, while credit growth is at 4.9%. - Money Supply (M3)
M3 growth reached 11.06% year-on-year (YoY), marking the highest level in the past 12 fortnights. - Credit Growth
Current credit growth stands at 11.52% YoY, its lowest in 62 fortnights.
Note: The data excludes the addition of HDFC Ltd. figures following its merger with HDFC Bank.
Detailed Statistics
- Deposits
Current deposits total approximately ₹217.3 lakh crore, showing a 12.16% YoY increase but a 0.5% decline from the previous fortnight. - Advances
Advances are at ₹167.7 lakh crore, reflecting a 13.03% YoY increase but down 0.34% fortnightly. - Credit-Deposit (CD) Ratio
The CD ratio has slightly risen to 77.17% from 77.04% two weeks prior.
Weekly Insights
- Deposit Trends
Weekly deposits declined by 0.51%. Demand deposits dropped by 1.81%, likely due to increased Diwali spending, while time deposits fell by 0.34%. - Credit Trends
Food credit rose by 4.8%, whereas non-food credit dipped by 0.35%, leading to an overall credit decrease of 0.34%.
Year-on-Year (YoY) Analysis
- Deposits
Total deposits increased to ₹218.1 lakh crore, up 11.8% YoY. - Advances
Advances reached ₹172.4 lakh crore, an 11.5% YoY increase. - Credit Composition
Food credit declined by 6%, while non-food credit rose by 11.54%.
Conclusion
The recent data reflects a notable shift in the banking sector’s dynamics, with deposits now growing faster than loans for the first time in over two years. This change may prompt banks to reassess and adjust their lending strategies going forward.
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