Banks are witnessing a shift in deposits from savings accounts to fixed deposits (FD) whilst credit growth is gathering steam. Data from the fortnight reporting by banks revealed this.

In the reporting that ended on September 9, 2022, all scheduled commercial banks reported overall deposit accretion of Rs 62,196.47 crore, likely due to depositors moving their deposits from savings accounts to FDs and the creation of new FDs. The latest RBI Data suggests that saving bank deposits of banks dipped by Rs 54,021.77 crore in the fortnight while FDs were up Rs 1,16,218.25 crore.

This update comes when FDs are fetching relatively higher returns as banks raise interest rates in the backdrop of the gradual drying up of systemic liquidity.

Incremental credit growth continued to outstrip deposit growth. Banks have reported credit growth of Rs 95,751.7 crore in the reporting fortnight against deposit growth of Rs 62,196.47 crore.