Credit growth is outpacing deposit growth, which could lead to liquidity challenges for the banking system, a report said on Tuesday. Raising deposits to keep pace with loan growth and keeping the credit cost low remains on the top of banks' agenda, a FICCI-IBA report said.
More than two-third of respondent banks (67 per cent) reported a decrease in the share of Current Account Savings Account (CASA) deposits in total deposits in the current round of the survey, it said.
"Term deposits have picked up pace as reported by the respondent banks due to higher/attractive rates. 80 per cent of the participating Public Sector Banks reported a decrease in share of CASA deposits during the first half of 2024 while over half the private sector bank respondents reported a decrease in CASA deposits," it said.
The 19th round of the FICCI-IBA survey was carried out for the period January to June 2024. A total of 22 banks, including public sector, private sector and foreign banks, participated in the survey. These banks together represent about 67 per cent of the banking industry, as classified by asset size.
A majority (71 per cent) of the respondent banks reported a decrease in the NPA levels in the last six months, it said.
Source Name : Economic Times