RBI Data: Deceleration in Bank Credit Growth Despite Boost in Term Deposits

Reserve Bank data showed that bank credit and deposit growth slowed down in the October-December 2024 quarter. Personal loan growth and credit to agriculture and industry sectors declined. However, credit for trade and professional services increased. Term deposits saw a significant rise in interest rates and share of total deposits.

In the October-December 2024 quarter, Reserve Bank data indicated a slowdown in both bank credit and deposit growth. The annual credit growth decreased to 11.8% from 12.6%, with aggregate deposits growing at a slightly reduced pace to 11% compared to 11.7% in the previous quarter.

Personal loans, which make up a significant portion of total credit, also saw a decrease in growth, moderating to 13.7% from 15.2% earlier. While credit to agriculture and industry weakened, lending for trade, finance, and professional services experienced an upswing.

The data also highlighted a notable increase in term deposits, with their share in total deposits climbing due to higher interest earnings. Over half of the total term deposits during this period were substantial, valued at Rs 1 crore or more.