During the April-June period, the banks deposits, mostly fixed deposits have grown by Rs. 3,25,514 crore against Rs. 2,83,979, a year ago.

According to a senior banker, due to volatile equity markets and gold becoming more expensive, investors are looking for safer alternatives and bank's savings acoounts and fixed deposits provide them with that safety.

Another reason for the growth is that investors are speculative of a probable reduction in policy rates and its affect on deposit rates , and hence are parking their surplus funds for long maturities.

Deregulation of interest rates for foreign deposits have also resulted in increase of foreign deposits by $ 791 million for just two month period.

The reduced demand for fresh credit saw only a minor increase in credits, which grew by Rs. 1,49,271 crore against Rs. 1,47,667 crore the last year.

Reduced credit growth and enhanced deposits has seen, the credit-deposit ratio to come down to 46% from 52% a year ago. While ideally it should be at 70%. Due to lack of takers for credit, the banks have parked more funds in government securities. The bank increased their investments in such securites from Rs. 1,03,055 crore to Rs. 1,26,277 crore.