Indian Bank Deposits have grown by 1.35X from the financial year 2017-18 to 2020-21. The significant growth was seen during the Covid-19 period where the overall market grew by 12.3%. The main reason is the severe lockdown of economic activities from Apr'20 to Jun'20.
The consumption levels were at the lowest as people did not get the opportunity to spend money on discretionary expenses.
There was considerable uncertainty and fear in consumers' minds, which led to parking excess funds in bank deposits, considered a haven.
Trust was low on cooperative banks and small banks owing to moratorium stories.
Lastly, consumers were disappointed by the services of PSU banks, which were hit because of massive merger activities.
These factors led to high growth in deposits for private sector banks.
The below table shows the trend of bank deposits market share and growth.
Source: Annual Reports of Banks and RBI Data. All values in Rupees Billion
Now, since the macro factors seem to be moving back to normal, consumers have started spending on food, shopping, travel, etc. It will be interesting to see what happens to the growth of bank deposits during the current financial year 2021-22.