DEPOSIT GROWTH PICKS UP PACE AS ECONOMY BUILDS UP STEAM

MUMBAI: Deposit growth at Indian banks has picked up pace after remaining subdued for two consecutive months. Latest data from the RBI show that bank deposits rose close to 14% yearon-year in the fortnight to August 8 as investments in mutual fund products flowed to term deposits. A strong deposit growth may encourage banks to lower deposit rates and may, subsequently, lead to lower lending rates, too. High inflation, however, can play a spoilsport. “As and when the government starts spending, the system liquidity will improve and that will translate into a higher deposit growth,” said NS Venkatesh, executive director at IDBI Bank. “Rates may fall in January-March quarter once the inflation falls in its glide path. Currently, the credit