Bank Credit, Deposits Growth Decelerate In Q3, Shows RBI data

Bank credit as well as deposits witnessed deceleration during the October-December quarter sequentially, showed Reserve Bank data released on Friday.

Bank credit growth decelerated (year-on-year) to 11.8% in December 2024 from 12.6% in September 2024, while aggregate deposits increased at a marginally lower pace at 11% as compared to 11.7% growth in July-September period.

Personal loans, which have large share (31.5%) in total credit, recorded moderation in annual growth to 13.7% (15.2% a quarter ago), according to RBI's data on 'Outstanding Credit of Scheduled Commercial Banks – December 2024'.

Credit to agriculture and industry sectors also recorded some tempering in the growth.

On the other hand, bank lending for trade, finance and professional or other services accelerated during the third quarter of 2024-25.

The data showed that lending to public sector organisations accelerated to 5.4% in December 2024 as compared to 0.3% in the preceding quarter. Its share in total credit stood at 13.6%.

"Bank charged 8% to less than 10% interest rate on over half of the loan amount and nearly 16% of the loans were bearing less than 8% interest rate; the remaining loans were bearing 10% or above interest rate," RBI said.

The data regarding 'Deposits with Scheduled Commercial Banks - December 2024' revealed that term deposits rose by 14.3% (YoY) as compared to 5.1% growth in saving deposits in December 2024.

As a result, the share of term deposits in total deposits rose to 62.1% from 60.3% a year ago.

RBI further said the share of deposits bearing 7% or above interest rate in total term deposits increased to 70.8% in December 2024 from 61.4% a year ago.

"With rise in return on term deposits, nearly 79.8% of the incremental term deposits mobilised during April-December 2024 were held in the original maturity bucket of one to three years; on an outstanding basis, over two third of term deposits were in this maturity bucket and another 11% had higher original maturity," it said.

During April-December 2024, 56.1% of the total term deposits were of size 'Rs 1 crore and above'.

Senior citizens owned 20.2% of the total deposits in December 2024.