Bank deposits double in a little over 7 years

2023 ended on a high note for commercial banks with deposits crossing the Rs 200 trillion mark, taking seven years and three months to double from Rs 100 trillion in September 2016. The last Rs 50 trillion were mobilised in a record two year and nine months.

Mutual fund AUM, which is one-fourth of total bank deposits, grew by about Rs 20 trillion during the same period. The strong credit offtake after the Covid period propelled banks to garner more money by offering higher interest rates on term deposits. This led to pace of deposit mobilisation to move into double digits in 2022 and 2023.

Two crucial events which helped to scale up deposits base were demonetisation of Rs 500 and Rs 1,000 notes in 2016, and return of Rs 2,000 notes in the banks in 2023.