Share of term deposits contracted above 7% falls sharply to 54% in Sept vs 73% in March, shows RBI data

The share of term deposits bearing interest rate above 7% fell sharply to 54% in the quarter ending September from 73% at the end of March, showed data released by the Reserve Bank of India. This reflects the transmission of policy rates on liabilities as the banking regulator lowered repo rate and cash reserve ratio by 100 basis points each, which prompted banks to lower interest rates on deposits. Loans linked to external benchmark rates also fell immediately after RBI cut rates, reflecting transmission of policy rate. Nearly 63% of loans are linked to external benchmarks such as repo rate. The RBI data showed that 64% of deposits were contracted at a rate below 7% and 5% were contracted at a rate above 8% as of September. Share of term deposits of Rs 1 crore and above grew by 12.3% on a year-on-year basis in September 2025 and their share stood at 45.6% as compared to 45.3% a year ago. The data showed that 69.8% of term deposits were held under the original maturity bucket of ‘one to three years’ as against 66.8% a year ago and 20% of term deposits were held under maturity period up to one year. Live Events Public sector banks’ share of deposits rose to 57.6% in September from 57.3% a quarter ago partly because deposit growth declined for private banks. PSU banks saw 9.6% growth in deposits on a year-on-year basis while for private banks, deposits grew 10% in September as against 15.1% a year ago. Among states, Maharashtra accounted for the highest share of deposits mobilised at 16.5%. Maharashtra, Uttar Pradesh, Karnataka, NCT of Delhi, Tamil Nadu and West Bengal jointly accounted for 54.2% of household deposits in September. The data also showed that the share of savings accounts remained steady at 28.4% since March, while the share of current accounts fell from 10.1% in March to 9.3% as of September 30. The share of term deposits rose to 62.3% from 61.4% a year ago. (You can now subscribe to our Economic Times WhatsApp channel) (Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online. ...moreless (You can now subscribe to our Economic Times WhatsApp channel) (Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online. ...moreless