The conclusion of 2023 marked a significant milestone for the banking sector as total deposits surged past the remarkable figure of Rs 200 lakh crore. This impressive feat reflects a noteworthy doubling of deposits compared to the September 2016 value of Rs 100 lakh crore, showcasing a compound annual growth rate of approximately 9.5%. While the acceleration in deposit accumulation to the tune of Rs 100 lakh crore stands as the fastest in the industry's history, the pace of growth has somewhat decelerated in comparison to earlier periods.
As per data released by the Reserve Bank of India (RBI), the total bank deposits reached Rs 200.8 lakh crore by December 29, marking a 13.2% increase from the corresponding period in the previous year. Within this substantial sum, Rs 176 lakh crore constituted term deposits, with the remaining amount held in current and savings accounts. Concurrently, bank advances tallied up to Rs 159.6 crore, showcasing a 20% surge compared to December 2022 levels.
An interesting trend has emerged in recent years, with household savings diversifying towards mutual funds. In 2023 alone, the mutual fund industry experienced an unprecedented influx of Rs 10 lakh crore into its total assets under management (AUM), surpassing the cumulative threshold of Rs 50 lakh. This amount now represents a noteworthy quarter of the overall bank deposits. A stark contrast can be drawn to 2003 when bank deposits stood at Rs 12.6 lakh crore, while mutual funds merely managed an AUM of Rs 1.2 lakh crore.
The trajectory of bank deposits showcases a robust growth pattern. Originating at Rs 5.1 lakh crore in 1997, they underwent a doubling to Rs 10 lakh crore by June 2001, followed by another twofold increase to Rs 20 lakh crore by March 2006. The most rapid doubling phase occurred between March 2006 and July 2009, propelling deposits to Rs 40 lakh crore.
