Bank officials wielding meghaphones tout for deposits on streets
Rising loan demand from companies and consumers has pushed annual credit growth to a decade high of 17.95% as of October, compared to a five-year average of 9.7%, data provided by the Reserve Bank of India shows. However, the deposit collection has failed to keep pace and is still staying close to its five-year average of 9.4%, pushing bankers to look for ways to lure deposits.
Lenders are also raising the deposit rates to make it more attractive to customers. (Bloomberg) Indian bankers are taking to the streets with megaphones and enlisting grocers to sign up customers as they seek to lure cash deposits to fund the fastest credit growth in a decade.
Rising loan demand from companies and consumers has pushed annual credit growth to a decade high of 17.95% as of October, compared to a five-year average of 9.7%, data provided by the Reserve Bank of India shows. However, the deposit collection has failed to keep pace and is still staying close to its five-year average of 9.4%, pushing bankers to look for ways to lure deposits.
Source: Bloomberg
Lenders have to compete for liquidity with equities and debt funds which offer chances of better returns than bank deposits. As inflation has surged to a five-month high of 7.4%, according to the government, real returns on bank deposits, which in most cases is about 6% annual interest rate for two years, remains negative.
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