Despite growth in non food credit of banks, there is still slow growth in deposits. The decline in deposits has been by as much as Rs 65,027 crore in the fortnight ended November 5, 2010.
In the fortnight ended November 5, deposits have shown 15.34% growth in y-o-y basis. This figure is a 0.20% decline over the figures posted in the fortnight prior to that.
S Sridhar, CMD, Central Bank of India (CBI), said, "The recent sequential fall may be on account of the festival season because people may have withdrawn money to spend on gold and other purchases. Despite gold prices being high, people have bought gold and, moreover, higher food prices have also eaten into household savings. We are are seeing a a relatively lower growth in deposits."
M Narendra, CMD, Indian Overseas Bank, said, "After the final share allotment for the Coal India IPO, the remaining money, especially from the foreign investors, went out of the system. This might have caused a deceleration in the deposit growth. Till November 4, 2010, our bank's deposit growth has been at 12.37% y-o-y and we hope to achieve a growth of around 20% by March, 2011."
R M Mallya, CMD, IDBI Bank said, "The projection may be achieved once the government starts spending on projects and money comes into the system. Our current deposit growth is at 18% and may end up the year with the same growth. We are focusing more on current and saving account (CASA) deposits."