3 min read.Updated: 04 Jul 2021, 10:36 PM ISTJoydeep Sen
Households and corporates preferred safety of bank deposits even when rates of interest fell
In a year hit by slowdown in growth induced by the covid-19 pandemic, you would expect the overall savings and investment scenario to have deteriorated. But look at this data: total bank deposits, which were ₹135.7 trillion at the end of March 2020, moved up to ₹151 trillion at the end of March 2021, an increase of ₹15.3 trillion. As on 4 June 2021, it had moved up further to ₹153 trillion. To give a perspective on this scale of increase, bank deposits moved up from ₹125.7 trillion at the end of March 2019 to ₹135.7 trillion in March 2020, i.e. an increase of ₹10 trillion. The increase this financial year, by ₹15.3 trillion, is significantly higher. Was it due to attractive interest rates? No. In March 2020, term deposits of more than 1 year were in a range of 5.9% to 6.4%, according to the banks tracked by the RBI in a weekly report. In March 2021, that range was 4.9% to 5.5%.