Now Reading: Indian deposit growth rises despite falling real returns
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Indian deposit growth rises despite falling real returns
Indian bank deposit growth rose to 13.3% in June 2026 from 12.3% in January, even as inflation-adjusted deposit returns fell from 2.52% to 0.87%, according to SBI Research. Deposit growth excluding FCNR(B)…
The Story in Brief
Indian bank deposit growth rose to 13.3% in June 2026 from 12.3% in January, even as inflation-adjusted deposit returns fell from 2.52% to 0.87%, according to SBI Research. Deposit growth excluding FCNR(B) deposits stayed near 13%, suggesting domestic savers continued using banks despite weaker real returns.
Banks are competing for funds as credit growth outpaces deposit growth. Some lenders offered fixed-deposit rates of up to 7.5% in August. RBI data showed term deposits made up 61.6% of total deposits in March 2026, up from 55.2% in March 2022, while savings deposits fell to 28.7%. A July jump in deposits was driven largely by FCNR(B) inflows after special RBI measures.
The Indian Opinion
The lazy narrative that falling real returns must drive savers out of banks does not fit the data. Nor does the opposite claim that all deposit growth reflects strong household confidence. Domestic growth stayed firm, but the July surge was helped by foreign-currency inflows. The sharper test is whether deposits excluding FCNR(B) remain near 13% while banks keep credit growing faster than deposits.
Source: bfsi.economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
