BANK DEPOSITS
Lending rose faster than deposits in the December 27 fortnight
Lending in the last fortnight of 2024 outpaced deposit growth, with credit growing 11.16% year-on-year compared to deposits rising by 9.8%. Banks are facing challenges in raising deposits despite increased rates, due to competition from higher-return investments like stocks and mutual funds.
Suryoday Small Finance Bank (SSFB) partners with Tata Digital: Get FD interest rates up to 9.1% without a savings account
Get FD interest rates up to 9.1%: Suryoday Small Finance Bank (SSFB) announced its partnership with Tata Digital to extend its FD offerings. This collaboration will enable SSFB to leverage Tata Neu’s reach, providing retail customers with access to the deposit scheme.
SBI offers 10 bps higher interest rate on super senior citizen FDs than senior citizens FDs; check banks with high interest rates
Super senior citizen FD rates: Not all banks provide higher interest rates on FDs for super senior citizens, as they often offer the same rates as those on fixed deposits for senior citizens. However, some banks, including RBL Bank, Union Bank of India, Indian Bank, and Punjab National Bank (PNB) offer higher rates for super senior citizen FDs.
Union Bank's lag in deposits weighs on stocks of peers
Shares of Union Bank of India dropped 7.8% while Bank of Baroda and Punjab & Sind Bank slid 5.9% and 5.2%, respectively.
Union Bank of India shares fall over 7% on weak Q3 business update
Union Bank's Q3FY25 deposits rose 3.8% YoY to Rs 12.16 lakh crore but declined 2% QoQ. Advances grew 5.9% YoY to Rs 9.49 lakh crore, with a 2.2% sequential increase. The modest growth reflects a mixed performance in key financial metrics during the quarter.
Most banks see slower loan growth amid weak demand
In the December quarter, slower consumer demand and risk aversion to unsecured loans have led banks to report slower credit growth compared to deposit growth. HDFC Bank's deposits surged 15% year-on-year while its loan growth was at 3%. Only IDBI Bank and IndusInd Bank saw loan growth outpace deposits.
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HDFC Bank shares in focus after Q3 deposit growth outpaces loan growth by an extensive margin
HDFC Bank's deposit growth surpassed loan growth in the December 2024 quarter, with deposits increasing by 15.8% year-on-year and loans by 3%. Total gross advances stood at Rs 25.42 lakh crore, while deposits reached Rs 25.63 lakh crore. Retail loans grew by 10%, and corporate loans fell by 10.3%.
IDBI Bank reports 18 pc loan growth in Q3
IDBI Bank posted an 18% credit growth at Rs 2.06 lakh crore in the December quarter, with total deposits rising by 9% to Rs 2.82 lakh crore. Additionally, Bandhan Bank reported a 15% credit growth to Rs 1.33 lakh crore and a 20% increase in total deposits to Rs 1.40 lakh crore.
HDFC Bank's Q3 deposit growth outpaces loan growth by a very wide margin
Total gross advances stood at Rs 25.42 lakh crore as of December 31, 2024, a growth of around 3.0% over Rs 24.69 lakh crore at the end of December 31, 2023. The bank securitised loans worth Rs 21,600 crore during the quarter as a strategic initiative. In this fiscal year the bank has so far assigned loans worth Rs 46,300 crore.
HDFC Bank says Q3 deposit growth outpaces loan growth
HDFC Bank in India experienced higher deposit growth compared to loan growth in Q4 2023, with deposits rising by 4.2% and gross advances by 0.9%. The bank's loan-to-deposit ratio remains high at around 110%, prompting measures like selling retail loans. Indian banks overall show moderated loan growth for consecutive months.
Ujjivan Small Finance Bank sees 10% growth in advances despite 12% drop in microfinance
Ujjivan Small Finance Bank reported a rise in advances to Rs 30466 crore, despite its microfinance business shrinking. The bank's gross non-performing assets ratio increased to 2.7%. The portfolio at risk also rose, aligning with stress in the microfinance sector. The bank is reducing its microfinance weightage and increasing secured loans. Deposits grew to Rs 34496 crore.
Bandhan Bank reports 15% YoY growth in advances despite decline in loan recovery
Bandhan Bank's advances grew by 15% year-on-year to Rs 1.33 lakh crore by the end of December, while the overall collection efficiency dropped to 97.6%. Deposits increased by 20% year-on-year to Rs 141 lakh crore, but there was a 1.1% decline over the last three months due to reduced CASA and bulk deposits.
SBI launches innovation products to attract deposits
SBI introduces Har Ghar Lakhpati and SBI Patrons deposit schemes for enhanced financial flexibility. Har Ghar Lakhpati helps customers accumulate Rs 1,00,000 or multiples. SBI Patrons scheme offers higher interest rates for senior citizens aged 80 plus. Additionally, SBI launched a digital on-boarding process for NRIs. These initiatives aim to foster financial inclusion and empowerment.
UCO Bank reports 16.2% growth in advances, 9.37% in deposits
Uco Bank, a state-owned entity, reported a 16.2% year-on-year growth in advances at the end of 2024, reaching Rs 2.08 lakh crore. Deposits grew by 9.37% to Rs 2.80 lakh crore, with domestic deposits rising 7.29% to Rs 2.65 lakh crore. The credit-deposit ratio increased to 74.55% from 71.77% a year earlier.
Credit growth set to fall, provisions costs to rise, says ICRA
ICRA has lowered its credit growth estimate for Indian banks to 10.5%-11% for the fiscal year ending March 2025, citing reduced exposure to unsecured retail and NBFC sectors. Persistently high CD ratios and changes in liquidity coverage are expected to further reduce growth in FY2026.
Karur Vysya Bank reports 14 per cent loan growth; South Indian Bank follows with 12 per cent
Karur Vysya Bank reported a 13.96% growth in its loan book, reaching Rs 82,842 crore by December 2024, while deposits rose by 15.75% to Rs 99,155 crore. South Indian Bank's advances rose by 11.94% to Rs 86,965 crore, with deposits growing at 6.28% to Rs 1.05 lakh crore.
Deposit & lending rates move marginally in November
Lending and deposit rates displayed a mixed trend in November 2024. The weighted average lending rate on fresh rupee loans of commercial banks eased to 9.40 per cent, while deposit rates firmed up marginally to 6.46 per cent. The share of External Benchmark based Lending Rate linked loans increased to 59.4 per cent.
Higher FCNR rates fail to bring in the moolah
The RBI's temporary move to allow banks to offer higher interest rates on FCNR (B) deposits to attract foreign capital has seen limited response. Bankers cite the rupee's decline, a narrowing interest rate gap, and sufficient existing spreads as reasons for low uptake, despite the revised ceiling.
Lending and deposits grow a same pace in December 20 fortnight
Bank lending and deposits increased at the same pace by 11.5 percent as of December 20. However, both credit and deposit growth have slowed compared to last year’s figures. Retail loans remained a key contributor to credit growth, while term deposits made up a larger portion of total deposits.
Bank deposit rates to stay firm in Q4 as loan demand peaks
Bank deposit rates are expected to remain steady. Lenders need funds for increasing loan demands. The recent CRR cut offers some relief but the busy credit season keeps pressure on. Credit growth is around 10.6%. Deposit growth is similar. Liquidity is tight. Short-term rates are rising. Banks are working hard to attract deposits by offering competitive rates.
RBI imposes Rs 27.30 lakh penalty on IndusInd Bank
The Reserve Bank of India (RBI) has fined IndusInd Bank Rs 27.30 lakh for violating deposit interest rate regulations. An inspection revealed savings accounts opened for ineligible entities. The RBI clarified the penalty addresses compliance issues and doesn't invalidate the bank's customer transactions.
Bank deposits went up in line with credit growth in year to Nov
Indian banks saw a 10.6% rise in public deposits to ₹224.7 lakh cr between November 2023 and November 2024, matching the growth in credit. Both term and demand deposits achieved double-digit growth. This balanced growth follows regulatory concerns about potential overheating in retail credit, leading to a more sustainable credit-deposit ratio.
Rates, more than CRR lifeline, will help sustain rally in PSU banks
Friday's policy support reduces competitive intensity for deposits, but use of internal gauges for loan pricing and a higher proportion of short-duration liabilities give some state-run banks profitability edge through the initial months of a benign-rate cycle.
Banks unlikely to offer higher deposit rates after CRR cut
Indian banks are unlikely to raise deposit rates further due to slowing credit growth and a recent cash reserve ratio cut. The influx of liquidity ensures sufficient funds for lending, stabilizing deposit rates near their peak. Any rate reduction hinges on the central bank lowering the benchmark repo rate, potentially triggered by easing inflation.
Banks stick to certificates of deposits to keep lending
Data from domestic rating agency India Ratings show public sector banks issued ?37,700 crore of CDs in the first 20 days of November compared with Rs 42,800 crore during October 1-31. CD issuances by private banks in this period, meanwhile, rose to Rs 19,100 crore from Rs 16,900 crore in October.
Bank credit growth slows to 11.1% despite a mega merger
Indian bank lending slowed to 11.1% this year. Last year it was 20.6%. Deposit growth also fell to 11.2% from 13.6%. Banks added fewer loans and deposits compared to the previous year. Slower credit growth may impact India's GDP. Banks are selling government bonds to manage liquidity. Retail and NBFC loan growth has also declined.
High cost deposits up to 69 percent in September
Indian banks saw a rise in high-cost deposits in the September quarter. This may squeeze profit margins. Public sector banks lent more but gathered fewer deposits than private banks. Term deposits grew faster than savings accounts. Loans to private companies and working capital loans also increased. The share of loans to women borrowers continued to rise.
Term deposits outpace CASA growth in September
Indian banks saw a shift towards term deposits. These deposits grew to 61.4% of total deposits by September 2024. Attractive interest rates above 7% fueled this growth. Overall bank deposits grew by 11.7%. However, loan growth slowed down to 12.6%. Metropolitan branches led deposit growth but lagged in lending. Credit to private companies grew faster than overall lending.
New bill proposes multiple nominees for bank Fixed Deposits to ease fund distribution after death
A new bill, expected to be introduced in Parliament's winter session, seeks to amend bank nomination laws, allowing up to four nominees for fixed deposits (FDs) to ease the distribution of funds after the account holder’s death. The bill would offer two nomination options: simultaneous, where nominees receive specified shares, and successive, where one nominee replaces another upon death.
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