Depositors ask for higher interest, chase small banks

As larger private banks are finding it difficult to convince their customers to hold their deposits, the depositors are moving towards the smaller banks. The smaller banks have seen a high deposit base of upto 30% in the March quarter. Though the smaller banks have always provided a slightly increased interest rates than the larger ones, the big banks always had the wider deposit base.

To take an example the Fincare small finance bank is now showing a 50% deposit growth as compared to March 2019 and a 13% growth when compared to December 2019. The small financial bank had a deposit of rupees 46060 crores in March 2020. It had rosen from 4076 crores in December 2019 and 2043 crores in March 2019. The CEO of the bank, Rajeev Yadav says that the bank is doing well despite the lockdown that is going on. He is quite happy that the bank has more than enough funds to meet their lending and other requirements.

Other small banks like the AU small finance bank too has an increased rate of deposit by 34% and hhas a total deposit of 26163 crores. The growth of deposits in large banks are in a dip in contrast to that. The IndusInd Bank for example has seen deposit outflow of more than 8% in March. RBL also shows almost a 10% fall in deposits.

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