The current growth rates for both credit and deposits are faster as compared to the prints seen a year back.
At the same time last year, credit growth was recorded at 9.6% while deposits grew at 10.4% clip.
The deposits growth slowed in line with the shift in preference of small savers who are looking to invest more in market-linked instruments for higher returns.
Banks however expect the deposits mobilisation to grow faster hereon as non-residents are expected to put their surplus funds with foreign currency non resident bank (FCNR-B) deposits .
Banks have raised interest rates on FCNR-B deposits by up to 450 basis points as the Reserve Bank of India on June 5 offered a concessional swap facility to boost foreign currency inflows. The central bank subsequently removed the ceiling on interest rates on FCNR-B and non-resident external (NRE) deposits creating further room for rate hikes.