Bank deposits jumped by a whopping ₹2,87,495 crore in the March 27to May 8 period as savers/investors turned cautious in view of the volatility in equity and debt markets and women Jan Dhan account holders and farmers receiving inflows under the direct benefit transfer system.

Simultaneously, during the aforementioned period, the credit portfolio of all scheduled banks collectively declined ₹1,24,073 crore as credit appetite vanished in economy in the backdrop of global outbreak of the pandemic and the nationwide lockdown.

Besides lack of fresh disbursement, the loan portfolio would also have gone down due to repayments, say experts.

In fact, the period under review saw the Reserve Bank of India (RBI) permitting lenders (commercial banks, co-operative banks, all-India financial institutions and non-banking finance companies) to offer a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1.

Further, the central bank also allowed a deferment of three months on payment of interest in respect of working capital facilities sanctioned in the form of cash credit/overdraft outstanding as on March 1.

In the absence of demand for loans, banks deployed their investible surplus in Central and State government securities aggregating ₹3,48,754 crore during the March 27to May 8.

As per the Reserve Bank of India’s ‘Scheduled Banks’ Statement of Position in India’, during the reporting fortnight ended May 8, the deposts of banks shot up by ₹1,27,626 crore while their credit portfolio declined by₹21,032 crore.