Share of time period deposits in Banks’ complete deposits up at 60.3% in Dec 2023: RBI

The share of time period deposits in scheduled industrial banks (SCBs) complete deposits elevated to 60.3 per cent in December 2023 from 57.2 per cent in March 2023, in response to RBI’s quarterly knowledge.

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Rising return on time period deposits (TDs) is driving the compositional shift in deposits of SCBs, the central financial institution stated.

The weighted common home time period deposit fee (WADTDR) on recent and excellent deposits elevated by 246 foundation factors (bps) and 180 bps, respectively, throughout Might 2022 to December 2023 interval, per RBI’s newest month-to-month bulletin. Hundred foundation factors equal a share level.

Rates of interest on TDs of a couple of yr length ranged from 6 per cent to 7.25 per cent as of December-end 2023. The lagged impact of cross via of coverage fee will increase into deposit and certificates of deposit charges has exerted strain on banks internet curiosity margins, the bulletin stated.

Depositors are taking advantage of excessive deposit charges. On an incremental foundation, TDs accounted for practically 97.6 per cent of the entire deposits throughout April-December 2023 and the share of present account and financial savings account (CASA) deposits went down, RBI’s quarterly Fundamental Statistical Return (BSR) knowledge for December, 2023 present.

Deposits moved to larger rate of interest buckets, with the share of time period deposits bearing over 7 per cent rate of interest rising to 61.4 per cent of the entire time period deposits in December, 2023 from 54.7 per cent 1 / 4 in the past and 33.7 per cent in March 2023, per BSR. 

As of December 29, 2023, SCBs complete deposits stood at about ₹201 lakh crore. Of this, TDs accounted for 88 per cent and steadiness was CASA deposits.

CASA accretion from RuSU branches

Rural and semi-urban branches collectively accounted for 67.2 per cent of incremental CASA deposits throughout April-December 2023, whereas their mixed share in complete time period deposits throughout October-December 2023 was a lot decrease at 21.7 per cent, RBI stated.

Almost two thirds of the incremental time period deposits throughout October-December 2023 had been of the scale ₹1 lakh to lower than ₹1 crore – the corresponding share within the earlier quarter was 46.5 per cent, it added.

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“Feminine clients made important contribution in deposit accretion. Their share in incremental CASA, time period and complete deposits throughout October-December 2023 had been 63.4 per cent, 36.1 per cent and 40.1 per cent, respectively.

“Their share in complete deposits elevated to twenty.6 per cent in December 2023 from 20.2 per cent in September 2023,” the central financial institution stated.