Mumbai : Even as demonetisation led to a spurt in household deposit growth rates across the country, the southern region has shown a dip in deposit growth for the fiscal year 2016-17, according to a report.
The overall household deposits rate, at an all-India level, grew 14.1 per cent during the fiscal, up from the 12.3 per cent in the previous fiscal, Reserve Bank of India (RBI) data showed on Monday. The southern region’s household deposits growth rate dipped to 13.3 per cent for FY17, as against 13.8 per cent in the year ago period, the RBI data revealed.
“Central, northern and western India reported accelerating trends in deposit growth while the south showed a decelerating trend,” a report by domestic brokerage Kotak Securities said. Karnataka, Tamil Nadu and Telangana seemed to be major contributors for the decline in household deposit growth rates, it pointed out. In Karnataka the household deposit growth dipped to 11.5 per cent in FY17 from the year-ago’s 13.5 per cent, while in Tamil Nadu, which had seen state elections in the previous fiscal, the growth rate declined to 12.2 per cent in FY17 from 16.7 per cent.
Telangana saw a narrowing of household deposit growth rate to 16.4 per cent from 23.7 per cent. It can be noted that the demonetisation of Rs 500 and Rs 1,000 currency notes had led everyone to deposit the banned notes with the banks, resulting in shooting-up of deposits and an excess liquidity problem amid sagging credit growth. The Kotak report said demonetisation has left a “footprint” on the overall deposit growth in the system for the ongoing financial year. With the deepening of banking presence, the central and eastern parts of the country have witnessed a surge in savings deposits over the last few years, it said. “The share of these (central and eastern) regions increased to 32 per cent of total household deposits in FY17 compared to 28 per cent in FY12,” the report said, attributing it to banks’ branches there.
