A cashier counts Indian banknotes as customers wait in queues inside a bank in Chandigarh, India, November 10, 2016. To match Analysis INDIA-MODI/CORRUPTION-BANKS REUTERS/Ajay Verma/File Photo
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AJAY VERMA
The transmission effects of the monetary easing phase are evident, with the share of scheduled commercial banks’ (SCBs) term deposits offering interest rate of ‘less than 7 per cent’ rising to 56.3 per cent in December 2025 from 29.2 per cent a year ago, according to RBI.
Consequently, the share of term deposits offering interest rate of ‘7 per cent and above’ declined to 43.7 per cent in December 2025 from 70.8 per cent a year ago.
The aforementioned development comes in the wake of the RBI’s rate setting monetary policy committee cutting the policy repo rate cumulatively by 125 basis points during the February-December 2025 per cent to 5.25 per cent
Term deposits up 11.5%
Term deposits, the prime driver of deposit accumulation, recorded 11.5 per cent growth (year-on-year) in December 2025 and outpaced the growth of current deposits (11.1 per cent) and savings deposits (8.3 per cent), according to RBI’s Quarterly Basic Statistical Return (BSR) on deposits with SCBs.
Deposit growth (y-o-y) pertaining to public sector banks improved to 9.9 per cent in December 2025 against 9.1 per cent last year, whereas the same for private sector banks decelerated by 2.1 percentage points during the said period and stood at 11.3 per cent in December 2025.
Key contributor
The household sector remained the largest contributor with 60.1 per cent of deposits as at end-December 2025. During first three quarters (9 months) of FY:2025-26, the household sector drove more than three-fourths of total change in SCBs’ deposits.
Nearly 70.5 per cent of term deposits were having the original maturity of one to three years as of December 2025, whereas 19.5 per cent of the term deposits were short-term deposits with original maturity period up to one year.
The contribution of female depositors in total SCB’s deposits inched up to 20.8 per cent in December 2025 as compared to 20.6 per cent a year ago, according to the BSR statement.
Further, the share of deposits held by senior citizens increased to 20.7 per cent in December 2025 from 20.2 per cent a year ago.
The household sector remained the largest contributor with 60.1 per cent of deposits as at end-December 2025. During first three quarters (9 months) of FY:2025-26, the household sector drove more than three-fourths of total change in SCBs’ deposits, RBI said.
The share of term deposits of the size ‘₹1 crore and above’ increased and stood at 45.8 per cent in December 2025 (45.5 per cent a year ago).
Published on February 27, 2026
