Viral Video: Mumbai Bank Officer Advertises Deposit Plans Using Megaphone
NDTV
A video of an official at Canara Bank, advertising its deposit plans through a megaphone on pavements in the outskirts of Mumbai is viral on Twitter.
Indian bankers are taking to the streets with megaphones and enlisting grocers to sign up customers as they seek to lure cash deposits to fund the fastest credit growth in a decade. Look at how @canarabank selling fixed deposits in Mumbai suburbs. Tells the story of liquidity crunch on the system. Banks need more money to support rising credit growth pic.twitter.com/Mfi1Zx4DqI
Rising loan demand from companies and consumers has pushed annual credit growth to a decade-high of 17.95% as of October, compared to a five-year average of 9.7%, data provided by the Reserve Bank of India shows. However, the deposit collection has failed to keep pace and is still staying close to its five-year average of 9.4%, pushing bankers to look for ways to lure deposits.
Lenders have to compete for liquidity with equities and debt funds which offer chances of better returns than bank deposits. As inflation has surged to a five-month high of 7.4%, according to the government, real returns on bank deposits, which in most cases is about 6% annual interest rate for two years, remains negative.
"Banks are funding most of the loan growth through liquidity built up through deposits coming off the coronavirus when credit dipped," according to Krishnan Sitaraman, deputy chief ratings officer at CRISIL Ltd., the Indian unit of S&P Global Ratings. "They need to shore up deposits now."
