Deposit growth continues to be lower than that of loans, Reserve Bank of India (RBI) data show. Deposit growth was 13.5 per cent year-on-year and credit growth was almost 15 per cent year-on-year in the fortnight ended May 3. During the fortnight, banks disbursed new credit of Rs 50,945 crore, while accumulating deposits of Rs 45,078 crore.
The central bank has projected 15 per cent credit growth and 14 per cent deposit growth for 2013-14.
Though the capital expenditure cycle is showing some revival, full recovery is still a long wait.
As a result, banks are hoping that in this financial year, too, retail credit will be the driver.
Credit growth is generally slow in the first half of a financial year. The highest pick-up is in the final quarter of every year.
Earlier this month, RBI had cut the repo rate, at which it lends to banks, by 25 basis points to 7.25 per cent. However, banks are yet to cut their own lending rates.
Bank has cut its deposit rates and other banks might follow, is the expectation, leading to a slowing in the rate of deposit accumulation.