India’s bank deposits surpass credit by Rs 1 lakh crore in May

India’s bank deposits surpassed the nation’s credit offtake by Rs 1 lakh crore for the month of May this year, in absolute terms. While deposits in May expanded by Rs 2.7 lakh crore (or Rs 2.7 trillion), the total credit offtake for the month was Rs 1.7 lakh crore, according to the Reserve Bank of India data collated by Care Ratings.

The May episode comes despite the public largely preferring to invest in mutual funds or stocks in recent times, rather than keep their money stashed away in banks, and is widely being regarded as an outcome of banks managing to woo depositors and investors with lucrative sops.

The growth in deposit is expected to be prominent, and stay between 13 and 13.5 per cent in FY25, according to The New Indian Express.

On a year-on-year basis, deposits increased to Rs 210.9 lakh crore, up by Rs 25.1 lakh crore, or 12.8 per cent, in the past year.

Credit expansion on the other hand reached Rs 167.8 lakh crore on a year-on-year basis, and was up by Rs 27.7 lakh crore, or 19.8 per cent, in the fortnight ending May 31 this year.

Overall, the credit-to-deposit ratio, has dropped by 20 BPs, or basic points, to 79.6 per cent over the fortnight ending May 31 from the figure of 80, around which it remained hovering since the month of September last year.

The overall government investment was Rs 61.8 lakh crore on May 31, and this marks an increase of around 10.3 per cent on a year-on-year basis but a drop of 0.3 per cent sequentially. The ratio of government investment to total assets dropped, too, to 25.4 and by 23 BPs.