Bank Strategies to Attract Depositors Amid Declining Growth | 20 Aug 2024
Amidst a slowdown in deposit growth and increased competition from capital markets, banks in India are introducing special schemes to attract depositors and meet credit demands.
- Major banks like State Bank of India (SBI) have reported a drop in deposits, with SBI's Current Account and Savings Account (CASA) deposits falling from Rs 19.14 lakh crore to Rs 19.41 lakh crore, and overall deposits decreasing from Rs 49.16 lakh crore to Rs 49.01 lakh crore.
- Credit growth rose by 15.1% while deposit growth declined to 10.6%, highlighting a significant gap.
- Customers are increasingly opting for capital markets over bank deposits for better returns, leading to a decline in traditional deposit growth.
- To counter declining deposits, banks like SBI and Bank of Baroda introduced special deposit schemes offering competitive interest rates (e.g., 7.25% for 444 days).
- These schemes are designed to attract depositors looking for higher returns in a low-interest environment.
- Banks are targeting specific segments like senior citizens and women, offering attractive rates and additional perks to mobilise deposits effectively.
- The Finance Minister stressed the importance of mobilizing small deposits rather than focusing solely on large sums.