Investors seem to be seeking the safety of banks as market conditions remain choppy: the country’s commercial banks have seen a 26 per cent surge in savings deposits in 2009-10 — the highest in last five years.
According to data available with Indian bank, savings deposits grew to Rs 11,36,676 crore in current fiscal against Rs 9,00,967 crore in 2008-09.
“At our bank, we have witnessed a rise in new customers acquisition, which has led to growth in our deposits during the year,” said KVS Manian, Kotak Mahindra Bank.
Sector watchers say the global financial meltdown has contributed to the deposit growth. Having burnt their fingers in the stock markets, which crashed due to the financial crisis in 2008 and 2009, people are chary of stocks.
“After losing their hard earned money in the stock market crash, people want to play safe by putting some part of their investment in banks,” said Alex Mathews, research head, Geojit BNP Paribas Financial Services.
Savings banks serve as a temporary parking slot as people await stability in the markets.
Both Indian and foreign banks witnessed healthy growth in saving deposits. Deposits of Indian banks grew by 26 per cent to Rs 11,01,171 crore; and foreign banks by 32 per cent to Rs 35,504 crore in 2009-10.