Year-end rush helps deposit growth pick up

Last Updated: Thu, Apr 04, 2013 06:16 hrs

Deposit growth picked up to register 14.25 per cent year-on-year growth till 22 March, according to latest data released by the Reserve Bank of India (RBI). In the fortnight ended 22 March, banks mopped up deposits worth Rs 91,000 crore after the raising of Rs 99,000 crore in the previous fortnight.

According to RBI data, credit disbursement was Rs 82,000 crore during the fortnight and registered a growth of 14.11 per cent year-on-year. Due to banks' year-end rush for deposits, short term rates had shot up to 9 per cent during the last fortnight of March, which cooled off in April.

This was for the first time that year-on-year deposit growth has outpaced credit growth in the fiscal year 2012-13. Deposit growth has been lagging behind credit growth for the last two years, which has raised concerns on the widening of asset liability gaps in banks.

The central bank has projected 16 per cent growth in credit and 15 per cent growth in deposit for the financial year 2012-13.

In the last financial year too, deposit growth picked up momentum in the last month. RBI data shows that banks had collected Rs 2.97 lakh crore of deposits in March, which accounted for almost one-third of what banks mopped up in the entire fiscal year 2011-12.

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