RBI concerned about slow deposit growth
Mumbai: The Reserve Bank Of India is concerned about the slow deposit growth and how banks would support double-digit credit growth amidst tightening liquidity. The issue was discussed on Wednesday when RBI governor Shaktikanta Das met managing directors and chief executive officers of public sector banks and key private sector banks.
A banker who attended the meeting said, "It was a routine meeting that takes place half yearly. We discussed the banking scenario. One of the issues discussed was that while credit growth has touched 18 per cent, deposit growth is languishing in single digits."
"While the loan rates linked to the repo rate have gone up by 190 basis points in line with the increase in repo rate, the deposit rates have not gone up much. However, banks are now slowly raising deposit rates.
"Another parameter discussed was asset quality which has been good, as slippages are falling. Every banker gave his view on how the last six months have been and how the next six months would be," he added.
The meeting was also attended by deputy governor M.K. Jain along with a few senior RBI officials.
As per RBI’s latest weekly data, outstanding aggregate deposits as of October 21 stood at over Rs 172.03 lakh crore, declining by Rs 60,116 crore over the fortnight. Year-on-year, the growth is around 9.5 per cent compared to a growth of 9.9 per cent a year ago.
But bank credit climbed to more than Rs 128.89 lakh crore, rising by Rs 29,086 crore in a fortnight. The credit growth was around 17.9 per cent YoY. Further, there has been a slower increase in deposit rates compared to benchmark lending rates.
Das advised banks to remain watchful of the evolving macroeconomic situation, including global spillovers.