Foreign banks clocked the fastest growth rate in deposits for three consecutive quarters, beating even the country?s largest bank, State Bank of India, data from the Reserve Bank of India showed.
As on June end, foreign banks? deposits grew 21.6% year-on-year, the third straight quarter of an above-20% growth, the RBI?s quarterly statistics on deposits and credit showed. Aggregate deposits of SBI and its associates grew at a moderate 10.4% for the period. SBI and its associates had led deposit growth in the banking system so far with growth rates beating that of the total system. The rise in foreign banks? deposit growth comes on the back of a jump in foreign currency non-resident (FCNR) deposits following the RBI?s special measures in September 2013 to arrest the rupee?s fall.
The central bank had prodded banks to raise dollars through FCNR deposits and swap these with the RBI at a concessional rate of 3.5% as against then market rate of around 7%.
Some foreign banks had even offered leverages to their NRI customers wherein the banks first lend dollars to the NRIs to park the same in FCNR bonds. The RBI received $26 billion through the concessional FCNR swap window. Public sector banks continue to hold the lion?s share of deposits raised at 73.9%, showed the central bank?s quarterly statistics.
Meanwhile, private sector banks saw a steady growth rate of over 12% in deposits for three consecutive quarters. On the credit disbursement side, private sector banks saw the biggest growth rate at 15.2%.
