look news india
Very encouraging and historic figures are emerging for the Indian banking sector at this time, which clearly shows the strengthening foundation of the country’s economy and the financial attitude of common citizens. According to the recent data related to the Reserve Bank of India (RBI) and the banking sector, the deposit growth i.e. the amount deposited by customers in the commercial banks of the country has broken all the records of the last 10 years. In the current economic scenario, the total deposit growth rate of banks has reached a very high level of 15.4 percent. The increasing inclination of people towards savings and the attractive interest rates offered by banks are considered to be the main reasons behind this bumper growth.
Huge demand for loans is continuously increasing from retail and corporate sectors.
On one hand, there is a tremendous surge in the inflow of money i.e. deposits in banks, on the other hand, the demand for loans i.e. credit growth from various sectors within the country is also skyrocketing at the same pace. From the festive season to the infrastructure, manufacturing, real estate and retail i.e. retail loan segments, the enthusiasm of customers and businessmen is palpable. Bank officials say that when the economy grows rapidly, huge amount of funds are required for the industries to expand and for the common man to buy his dream house or vehicle, which is clearly visible at this time.
What are the main reasons behind this historic spurt in deposit growth?
Financial analysts and banking sector experts believe that in the last few years, people’s awareness towards traditional and modern investment options within the country has increased significantly. The increase in interest rates on fixed deposits (FD) and other savings schemes by banks has inspired the general public to invest their hard-earned money safely in banks. Additionally, digital banking and pan India financial inclusion campaigns have led to direct access to banks for people from Tier-2 and Tier-3 cities to rural areas, resulting in new deposits reaching a 10-year high.
What will be its direct impact on the economy and the common man’s pocket?
According to banking experts, this excellent balance between deposit and credit growth is a very auspicious sign for the Indian economy. When banks have abundant deposits available, they are able to easily provide loans to industries and common citizens in the market at competitive rates. This creates new employment opportunities in the country, promotes manufacturing and keeps liquidity i.e. cash flow in the market smoothly. In the coming months, it is expected that this strong position of the banking system will provide further impetus to the country’s growth rate (GDP Growth).