How Indian banking trends are reshaping where people park their savings
- Remin Francis I R
- 5 hours ago
- 2 min read
Over the last five years, the way Indians park their savings in term deposits has undergone a quiet but meaningful shift. While the total deposit base has grown steadily... "who holds that money ?" has changed, and that change tells us a lot about how banking preferences are evolving in the country.
Back in 2019, public sector banks held the lion’s share of term deposits, roughly two-thirds of the entire market. These were the trusted go-to institutions for generations, known for their wide reach and strong government backing. But fast forward to 2025, and their share has come down significantly. On the other hand, private sector banks, which held a little over a quarter of the deposit market in 2019, now command closer to one-third. The shift in market share might seem like a matter of numbers, but it points to something much deeper: changing customer expectations.
Have public banks shrunk in size?
It’s important to note that public banks haven’t shrunk in size. They’ve grown in absolute terms. But private banks have grown faster, and that’s why their piece of the deposit pie has become bigger. The reasons for this are not surprising. Over the years, customers have become more comfortable with digital services, faster responses, and streamlined banking. Private banks, in many cases, have responded more quickly to these expectations. Whether it’s better mobile banking experiences, quicker turnaround times, or more aggressive customer engagement, these little things seem to be adding up.
There’s also the interesting case of rural banks. For a few years, they were growing steadily, even outpacing others. But in 2023, their deposit base saw a sharp fall, nearly 38%. This wasn’t due to customer behaviour alone. It's likely the result of a reclassification or merger, which shifted the numbers into other categories. Since then, rural banks have returned to modest growth but haven’t regained their earlier share.
What does the future look like?
Overall, the Indian banking landscape is slowly but surely changing. People are choosing convenience, speed, and service... banks, regardless of whether it's private or public, that keep up with these expectations are being rewarded with a larger share of the savings. While people may choose banks based on convenience, service, or technology, it's important to remember that whether your money is with a public or private bank, it remains protected under the vigilant oversight of the Reserve Bank of India.
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