India's Banking System Sees Robust Growth in Deposits, Advances: SBI

An SBI report highlights a robust two-decade expansion in India's banking system. Deposits and advances have surged, with growth accelerating post-FY21. Banks show a strong post-pandemic balance sheet revival and PSBs are regaining market share.

The banking system in the country has recorded a robust expansion over the last two decades, with total deposits and advances rising sharply, highlighting the growing scale and depth of financial intermediation in the country, according to a report by the State Bank of India (SBI).

The report noted that during the period from FY05 to FY25, bank deposits increased significantly from Rs 18.4 lakh crore to Rs 241.5 lakh crore. At the same time, bank advances rose from Rs 11.5 lakh crore to Rs 191.2 lakh crore, reflecting strong credit growth over the years.

It stated, "During FY05 to FY25, Deposits increased from Rs 18.4 lakh crore to Rs 241.5 lakh crore, Advances increase from Rs 11.5 lakh crore to Rs 191.2 lakh crore".

Post-Pandemic Revival and Asset Growth

According to the report, the growth momentum in both deposits and advances has picked up further since FY21. The report highlighted that Indian banks have shown a strong post-pandemic balance sheet revival. Bank asset growth rebounded sharply after FY21, with total banking assets rising from 77 per cent of GDP to 94 per cent of GDP by FY25. This increase reflects renewed credit intermediation and deeper financial penetration in the economy.

The report said this clearly signals a large-scale expansion of the banking system, although advances have grown at a faster pace compared to deposits.

Public Sector Banks Regain Market Share

The report also pointed out a continued revival in the market share of Public Sector Banks (PSBs). After witnessing a steady decline in market share since FY08, PSBs are gradually reclaiming their share in advances. This trend indicates improvement in balance sheets and a renewed appetite for lending among public sector banks.

Deposit Trends and CASA Ratios

On the deposit side, the report said that overall CASA (Current Account Savings Account) ratios have remained stable at around 37 per cent. However, trends vary across bank groups. Private banks have strengthened their CASA shares, while foreign banks have seen some erosion in their CASA ratios.

Overall Asset Growth Trajectory

Further, the total asset size of Indian banks has grown sharply from Rs 23.6 lakh crore in FY05 to Rs 312.2 lakh crore in FY25. The report added that asset growth, which had slowed to single digits during FY15 to FY21, has rebounded strongly in recent years. (ANI)

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