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Bank Deposits Grew by 11.9% in FY21 due to Higher CASA growth: RBI 

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Bank deposits rise 12 per cent in FY21 on higher CASA growthAs per the Reserve Bank of India’s (RBI) publication of ‘Deposits with Scheduled Commercial Banks – March 2021’, Scheduled Commercial Banks (SCBs) deposits in FY21 grew by 11.9 percent year-on-year compared to 8.8 percent in FY20 due to high growth in the Current Account and Savings Account (CASA) deposits.

  • The share of CASA deposits in FY21 increased to 43.7 percent in March 2021, compared to 41.7 percent in FY20.

Key Points:

i.Private Sector Banks: The share of private sector banks in total bank deposits in FY21 increased to 30.5 percent from 29.5 percent in FY20.

  • The private sector deposits account for half of the deposits of financial, non-financial corporations, and world sectors.

ii.Non-financial corporations: In FY21, the Bank deposits of non-financial corporations increased by 18.8 percent and their share in total deposits also increased to 16.2 percent.

iii.Deposits of Metropolitan bank branches (which accounts for over half of total deposits) increased to 59.6 percent in FY21 compared with 43.2 percent in FY20.

iv.The share of the Household sector in total deposits was about 64.1 percent in which the individuals (i.e. including Hindu Undivided Families (HUFs)) were the major constituent of the household sector and they contributed 55.8 percent in aggregate deposits.

  • Three major states viz, Maharashtra, Uttar Pradesh, and Karnataka held one-third of total household sectors’ outstanding deposits and over 40 percent of its incremental deposits during FY21.

iv.Term Deposits: The share of term deposits carrying less than 6 percent interest rate increased to 69.0 percent in FY21 from 21.3 percent in FY20.

  • The interest rate in the range of ‘5 to less than 6 percent’ had the highest concentration (36.8 percent) of total term deposits.
  • Majority of term deposits were originally contracted for ‘1 year to less than 3 years’ maturity. 75.7 percent of the term deposits were due for maturity within one year.
  • The share of short-term deposits (maturity of less than 1 year) rose to 32.8 percent.

Recent Related News:

On August 17, 2021, the Reserve Bank of India (RBI) introduced the ‘Financial Inclusion Index’ (FI-Index) to measure the extent of financial inclusion across India.

About Reserve Bank of India (RBI):

Establishment – 1st April 1935
Headquarters – Mumbai, Maharashtra
Governor – Shaktikanta Das
Deputy Governors – Mahesh Kumar Jain, Michael DebabrataPatra, and M Rajeshwar Rao, T. Rabi Sankar