Bank deposit growth turned anaemic even as credit growth continued at a healthy clip in the last fortnight of calendar year 2024, going by RBI data.

The net accretion to deposits was only ₹3,225 crore in the reporting fortnight ended December 27, 2024. However, credit saw a robust growth of ₹1,60,237 crore, per RBI’s Scheduled Banks’ Statement of Position in India.

A break-up of deposit accretion of all scheduled banks shows that while demand deposits declined by ₹40,242 crore, time deposits rose by ₹43,468 crore. This probably indicates the continuing preference of depositors to shift deposits from demand to high-interest-paying time deposits.

In the preceding fortnight, ending December 13, 2024, all scheduled banks’ deposits and credit increased by ₹52,090 crore and ₹79,771 crore, respectively.

In a report, India Ratings and Research (Ind-Ra) said it has maintained a neutral outlook on the overall banking sector for FY26.

The agency believes the banking sector’s near-to-medium-term challenges include an elevated loan deposit ratio (LDR), the potential impact of draft norms on liquidity coverage ratio, expected higher provisioning for the infrastructure sector, and the introduction of expected credit loss norms.