Bank Deposit Growth Update: Shaktikanta Das, Governor of the Reserve Bank of India, the regulator of the banking sector, has once again expressed his concern over the declining deposits in banks and has asked the banks to keep a close watch on the pace of lending and deposit growth so that any kind of cash crisis in the banking system can be avoided.
In an interview to NDTV, Shaktikanta Das said, today’s young generation is very aspirational and they are getting attracted to investing in different markets. There is nothing wrong in this, it is normal and in some ways it is also positive. He said, we are alerting the banks in view of this situation that they should keep an eye on the situation. There is no problem right now but in the coming days it can take the form of a structural cash problem.
The RBI governor said that banks should focus on attracting more and more deposits through innovative products and service offerings. He said that technology has accelerated credit growth and disbursement but there is a high dependence on physical channels for deposit growth, which has kept it low.
This is not the first time that the RBI Governor has expressed concern over the declining deposits in banks. During the announcement of the monetary policy on August 8, 2024, he had also asked the banks to attract deposits. Last month also, the RBI Governor had said that credit growth should not be ahead of deposit growth. He said, deposit mobilization has been lagging behind credit growth for some time. This can expose the system to structural liquidity issues.
Shaktikanta Das said, people used to deposit their savings in banks or invest in savings but now they are investing in capital markets or other financial instruments. The share of bank deposits in the financial assets of families is decreasing. Households are now depositing their savings in mutual funds, insurance funds or pension funds.
Earlier on Monday, August 19, 2025, Finance Minister Nirmala Sitharaman also asked to focus on ways to increase deposit growth in a meeting with the heads of public sector banks.
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