Data released by the Reserve Bank of India (RBI) on Wednesday showed that deposit growth in 2015-16 has slipped to 9.9%, an annual rate of growth last seen in 1962-63, as the chart shows. The slowdown seems to fly in the face of RBI’s contention that higher real rates of interest lead to an increase in savings and deposit growth. Gaurav Kapur, senior economist at RBS, points out that currency in the hands of the public has also increased recently and, taken together with low deposit growth, is responsible for the current shortage of liquidity among banks.