In its bid to meet the 25% deposit growth target, the India's largest lender SBI (State Bank of India) ecently revised its pricing on NRE rupee deposits on select maturities and baskets by 0.25% cent at 9%.
SBI has decided to raise the rate of interest on NRE rupee term deposits for tenors 3 years and less than 5 years from 8.75% to 9%, on deposits under Rs. 15 lakh category with effect from July18, 2012.
According to the latest Reserve Bank of India (RBI) data, deposits, mainly FDs (fixed deposits), rose 1.9%to Rs. 3,25,514 crore in April to June period, against Rs. 2,83,979 crore in the year-ago period.
Thanks to the liberalisation in interest rates, NRI (non-resident Indian) deposits have become attractive.
In the April to June period, the credit off-take was more or less on par with the year-ago period.
With deposit accretion outpacing credit growth, the collective incremental credit - deposit ratio of banks has gone down to 46% from 52% in the year-ago period.
In the domestic context, a CD ratio of 70% is considered ideal.
The RBI has set deposit growth guidance of 14 to 15% this fiscal and a credit growth at 17%. Banks' incremental credit-deposit ratio, which reflects fresh demand for loans in proportion to deposits, stood at just 48% compared to 51% in the same period last year and 84% in FY11.Indian Banks' outstanding deposits as of June, 2012 end stood at Rs. 62,29,200 crore, while credit stood at Rs. 47,60,800 crore.
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