Depositors turn to co-op banks for better returns

FALLING INTEREST RATES AT COMMERCIAL BANKS BEHIND SHIFT

- MAHESH NAYAK

RETAIL DEPOSITORS ARE increasingly turning to cooperative banks for better returns due to lower deposit rates at scheduled commercial banks.

For the fortnight ended September 19, term deposits with cooperative banks rose by ₹2,866 crore (0.7%) to ₹4.47 lakh crore, up from ₹4.44 lakh crore on September 5.

In contrast, term deposits across all scheduled commercial banks, including public, private, regionalrural,smallfinance,and payment banks, fell by ₹78,888 crore (0.4%) to ¥206 lakh crore.

Overall deposit growth for scheduled banks, including cooperative banks, dipped by 0.5% to $240.4 lakh crore from %241.6 lakh crore.

On a year-on-year basis, cooperative banks posted a robust 10.34% growth in deposits, outpacing the 9.50% riseseenacross scheduled banks. However, credit growth remained subdued for them at 6.83%, compared to 10.3% for scheduled banks,indicating that borrowers continue to prefer otherlending channels.