Bank deposits grew 11.9 per-cent during 2020-21 owing to a sizeable spike in current account and savings account (CASA) deposits, according to latest RBI data. The central banker stated that CASA deposits rose 43.7 per-cent in March 2021 compared to a 41.7 per-cent growth in the previous year.
Household sector had a major role in spiking deposits
Among institutional categories, the household sector held 64.1 per-cent share in total deposits. Induviduals (inclusive of Hindu undivided families or HUFs) contributed 55.8 per-cent to emerge as a major constituent of the household sector.
Maharashtra, Karnataka and Uttar Pradesh held a third of total household sectors' outstanding deposits and over 40 per-cent of its incremenetal deposits during 2020-21
Private bank deposits grew at the cost of public banks
Share of private sector banks in total bank deposits stood at 30.5 per-cent compared to 29.5 per-cent, a year ago. The continued rise in share of private sector banks came at the cost of public sector banks, according to RBI. The share accounted for for about half of the deposits of financial and non-financial corporations as well as rest of the world sectors.
Bank deposits of non-financial corporations surged 18.8 per-cent during the same time period.
Their share in total deposits surged to 16.2 per-cent in March 2021.
Long term and short term deposits
The share of long term deposits carrying less than 6 per-cent interest rate surged to 69 per-cent in March 2021 from 21.3 per-cent recorded, a year ago. RBI attributed this to downward shift in interest rates on term deposits. The ‘5 to less than 6 per cent' interest rate drew the highest concentraction of total term deposits at 36.8 per-cent.
"Majority of term deposits were orignally contracted for 'one year to less than three years' maturity," RBI said.
The share of short-term deposits (original maturity of less than one-year) increased 32.8 per-cent compared to 25.4 per-cent rise recorded last year.
"Bank deposits grew (y-o-y) by 11.9 per cent during the 2020-21 (8.8 per cent in the previous year) on the back of high growth in current account and savings account (CASA) deposits; the share of CASA deposits increased to 43.7 per cent in March 2021 (41.7 per cent a year ago).
Among institutional categories, the household sector held 64.1 per cent share in total deposits; individuals {including Hindu Undivided Families (HUFs)}, were the major constituent of the household sector and contributed 55.8 per cent in aggregate deposits.
Bank deposits of non-financial corporations surged by 18.8 percent during 2020-21 and their share in total deposits increased to 16.2 percent in March-2021.
Metropolitan branches of banks, which account for over half of total deposits, accounted for 59.6 per cent of incremental deposits during 2020-21 (43.2 per cent last year).
Three major states (Maharashtra, UP and Karnataka) held one-third of total household sectors’ outstanding deposits and over 40 per cent of its incremental deposits during 2020-21.
Share of private sector banks in total bank deposits continued to rise at the cost of public sector banks and stood at 30.5 per cent (29.5 per cent a year ago), accounting for about half of the deposits of financial and non-financial corporations as well as rest of the world sectors.
With the downward shift in the interest rates on term deposits, the share of term deposits carrying less than 6 per cent interest rate surged to 69.0 per cent in March 2021 from 21.3 per cent a year ago; the interest rate bracket ‘5 to less than 6 per cent had highest concentration (36.8 per cent) of total term deposits.
Majority of term deposits were originally contracted for ‘one year to less than three years’ maturity.
The share of short-term deposits (original maturity of less than one-year) rose to 32.8 per cent (25.4 per cent a year ago); in terms of residual maturity, 75.7 per cent of the term deposits were due for maturity within one year.
