Deposits in the banking system grew faster than the non-food credit disbursed by banks for the first time in over nine months, aided by a surge in foreign currency non-resident (FCNR) deposits swapped by banks into rupee deposits.
For the fortnight ended November 30, deposits, grew 16.12% y-o-y against non-food credit growth of 14.04%, according to fortnightly RBI data. Deposits stood at R74,77,928 crore at the end of November 30 against R64,40,028 crore in the same period last year.
The last time deposit growth outstripped credit growth was for the fortnight ended March 22, when deposits rose 14.26% and non-food credit growth stood at 14.04%.
Bankers attributed the sharp pick-up in deposit growth to the discounted swap facility offered by the RBI for FCNR deposits, which expired on November 30. Since banks swapped the dollar funds into rupees, the banking system saw a sudden inflow of deposits, especially in the second half of November.
“NRI money was coming in till the end of November 30. And most of it was through the FCNR deposit window and banks managed to raise about $34 billion from it. There might have been a push for deposits towards the end of the window,” said an executive director at a private sector bank. “Gold prices have also come down; that might also have led to an uptick in deposit growth,” he added.
Time and demand deposits grew 17.04% and 7.49%, respectively. Time deposits grew to R68,08,698 crore at the end of the fortnight against R58,17,458 crore in the same period last year, while demand deposits grew to R6,69,227 crore against R6,22,570 crore last year.