For bank deposits, private are back as the preferred choice over public
THE INDIAN EXPRESS
February 20, 2020
In a reversal, depositors over the last
six months have preferred to park their money with private banks rather than
state-owned banks, according to financial statements of banks over the last
four quarters analysed by The Indian Express.
While depositors have been moving towards
private sector banks over the last three years, the first half of the calendar
year 2019 saw state-owned banks getting back in the game with a sharp increase
in incremental deposits. But during July-December 2019, state-owned banks
slipped again.
Deposits of top eight private banks including
HDFC Bank and ICICI Bank increased by Rs 2.68 lakh crore, higher than the Rs
2.58 lakh crore increase in deposits in the top eight state-owned banks.
Compare this with the previous six
months: During January-June 2019, these eight state-owned banks including SBI
and Punjab National Bank accumulated Rs 5.25 lakh crore, more than double of
what the eight private sector banks managed (Rs 2.53 lakh crore) in the same
six months.
The shifting preference is significant given
that state-owned banks still hold bulk of the outstanding deposits.
In its recently released Report on Trend
and Progress of Banking in India, the RBI, too, had pointed towards the
customer shift from state-owned banks to private banks in case of term
deposits.
“The average share of PVBs (private banks) in
the incremental term deposits during 2016-19 was 81 per cent vis-a-vis 19 per
cent in 2011-15. Corresponding numbers for PSBs were 13 per cent and 77 per
cent, respectively.”
The aggregate deposits with the eight
state-owned banks in calendar year 2019 stood at Rs 66.73 lakh crore compared
with Rs 30.99 lakh crore held by the top eight private banks. In other words,
state-owned banks roughly hold more than two-thirds of total outstanding
deposits.
The eight private banks whose deposits have
been counted are: HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank,
IndusInd Bank, Federal Bank, Bandhan Bank and IDFC First Bank.
The state-owned banks counted are: SBI,
PNB, Bank of Baroda, Canara Bank, Bank of India, Union Bank of India, Indian
Overseas Bank and Oriental Bank of Commerce. The deposit figures have been
obtained from their quarterly financial statements.
Sources said the incremental deposits of the
eight state-owned banks also include interest accumulated. These banks
cumulatively held 68 per cent of total outstanding deposits. “Therefore, the
net addition of fresh deposits in the last six months in state-owned banks is
likely to be significantly lower,” said a banker. An RBI source said
preliminary analysis of incremental deposits into banks over the last six
months suggested that almost 80 per cent of fresh deposits seem to have been
cornered by the private sector.
A closer study of the data shows that
State Bank of India has seen a significant increase in its share of incremental
deposits cumulatively raised by PSBs over the last two quarters. SBI, which
accounted for just 23 per cent of the additional deposits raised by the eight
state-owned banks during January-June 2019, saw its share jump to 63 per cent
in the following six months. SBI and PNB together accounted for 78.5 per cent
of the additional deposits accumulated by the eight PSBs in the list.
Among the private sector banks, too, HDFC Bank
took the lion’s share followed by ICICI Bank and Axis Bank.
While HDFC Bank added Rs 1.12 lakh crore,
ICICI Bank and Axis Bank added Rs 55,613 crore and Rs 50,998 crore respectively
during the six-month period July-December 2019. These three banks accounted for
82 per cent of the deposits raised cumulatively by the eight private banks.
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