Mumbai : Bank deposits by both private corporate as well as household sectors grew at 13 per cent, but government deposits slipped 2 per cent in 2015-16, while overall deposit growth was led by rural and semi-urban regions for the seventh year in a row.
A report by Kotak Institutional Equities says private sector banks fared poorly in garnering household deposits while they made gains from corporate and government sectors, though most of the government deposits went to State Bank.
Overall, the 13 per cent deposit growth has been driven by corporates and households, while government deposits remained weak throughout the year, says the report, reports PTI.
Overall deposits grew 10 per cent with current account deposits growing 7 per cent, savings 16 per cent and term- deposits 8 per cent, says the report. The low-cost Casa deposit ratio improved by 130 bps to 36.2 per cent for the system with the share of savings deposits at a decade high of 27 per cent. Contribution from the private corporate sector improved for the second consecutive year to 11 per cent of overall deposits, while deposits by households improved for the sixth consecutive year to 62 per cent.
A key highlight is the remarkable resilience shown by rural and semi-urban markets despite weak monsoons and economic slowdown, growing the share of deposits from these two sectors consistently since 2006-09.
Another notable feature is the growth in savings and the continuing slowdown in current account deposits. Deposit of households, which own 85 per cent of deposits, grew 17 per cent clocking the best growth since 2008-09 driven by strong growth by self-employed (over 50 per cent) and salaried segment (40 per cent).
On the current accounts side, however, trends are yet to be established as the strong growth in 2014-15 was not repeated in 2015-16. Private sector is showing some confidence with a growth of 30 per cent.
Financial sector dominates growth but this is the most volatile deposit source for a bank. Term deposits, essentially dominated by households which constitute 55 per cent of overall term deposits, grew 13 per cent and the trend is broadly stable in recent years.
