In India, the Banks are beholding a high credit growth associated with deposits. The credit growth has closely been turned to double the growth in deposits in the current financial year. This can principally be accredited to a busy business cycle.

As of the September-end quarter, the bank credit growth mounted at 16.5%. Meanwhile, deposits rose by 9.2%, per the RBI data.

“Credit growth has further enhanced to 18% as of October 21, while deposits endure growing at 9.5%. But rather than gauge up deposit growth, banks are falling back on their speculation and cumulative their ratio of credit to deposit. Most banks have elevated their credit-deposit ratio to ended 80%,” said a TOI report.

It is important to note that even after the dominant situation, banks aren’t scrambling for retail deposits. The Indian banks were uncertain about how long credit growth will endure and are taking a guarded method by raising interest rates through limited-period proposals.

The country’s major lender SBI has seen its credit rise by 20% as of September-end compared to opportunities of 12% at the year’s commencement.

SBI Chairman Dinesh Khara said that although bank credit is increasing twice as fast as deposits, SBI has a huge base of deposits.

As per Khara, the busy season was the chief factor leading to this growth. According to the media report, the SBI chairperson assumes overall credit to grow by 14% to 16% in this financial year. He called infrastructure, renewable power, oil marketing companies and services the foremost credit drivers.

Deposits growth has always been a concern for lenders. According to Bank of Baroda MD Sanjiv Chadha, the scenario regarding the deposit rates is yet to stabilise.