SBI witnesses 60% rise in deposits as savers seek safe haven

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SBI witnesses 60% rise in deposits as savers seek safe haven
State Bank of India has notched up nearly 60 per cent uptick in deposits so far this fiscal, partly due to the flight of savings from ponzi and bogus schemes, many of which went belly up in recent months, its Chairman Pratip Chaudhuri has said. Surprisingly, during the latter part of the past fiscal, the country's largest bank had witnessed a sharp fall in deposit accretion, just like other banks.

Chaudhuri described the development, which has its roots in one of the biggest tragedies to hit the investors, especially in the eastern states, as "flight to safety". "There is a flight to safety. In many parts of the country, many (ponzi and bogus) schemes are not able to redeem their deposits. So then SBI becomes a beneficiary," Chaudhuri said, adding that the eastern states are a fertile deposit collecting ground. "Deposit growth is very strong, in fact we are surprised because our deposit rates are lowest in the industry...they have grown 1.5 times," he told PTI in an interview. In absolute terms, the bank's deposit growth till now has been Rs 41,000 crore as against Rs 26,000 crore it had notched up in the same period last fiscal. The bank had posted a 14.9 per cent rise in deposits in FY13, with the last two quarters witnessing headwinds, partly due to the bank's decision to test the market by lowering its offering.

In early April, West Bengal witnessed a string of suicides by depositors of ponzi schemes and chit funds like Saradha chit fund, which duped lakhs of investors of thousands of crores, triggering a debate on the lack of regulatory gaze on such operators. PTI

Read more about: sbi
Story first published: Thursday, June 13, 2013, 14:00 [IST]
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