Deposits grow faster than loans

The banking sector’s outstanding loans rose 4.8% in the first quarter – from Rs 168.7 lakh crore as of end-March 2024 to Rs 176.8 lakh crore on June 28. During the same period, deposits grew 5.3% to Rs 220.6 lakh crore from Rs 209.3 lakh crore.

In the past year, the growth of loans continued to exceed that of deposits, with the loan portfolio expanding by 19.6% by the end of June 2023.

However, this was largely due to the impact of the HDFC-HDFC Bank merger. If we exclude the effects of the merger, the year-on-year growth would have been around 16.2%, still higher than the 12% growth in deposits. The accretion to the deposit book has been around Rs 11.3 lakh crore during the first quarter, while the addition to the loan book has been Rs 8 lakh crore.

According to a Macquarie report, of the banks that have reported their business figures so far, the average quarter-on-quarter increase has been 1.5% for public sector banks and 0.2% for private banks. In deposits, the average quarter-on-quarter growth is 0.3% for PSBs and 0.6% for private banks.