IndiaCatalog.com
India News
Search Web Directory
News Home
Slow income growth impending deposit growth: RBI study
Posted on 15th May 2019
Decelerating income growth is the most important among the factors responsible for the slowdown in deposit mobilisation of the banking system, the Reserve Bank of India (RBI), in its recent study, said.

The co-movement of deposit growth with the growth of nominal GDP is stronger than with the deposit interest rate, as per the study. Small savings collections emerge as the next most important determinant, suggesting that in the long-run, income drives both deposits and small savings, and the limit on tax incentives for small savings enables households to undertake both out of their income.

Outstanding deposits of scheduled commercial banks (SCBs) stood at `126 lakh crore as on March 31, 2019 accounted for 128.7% of outstanding bank credit (lower than 132.5% a year ago), according to the RBI.

However, deposit growth is picking up in recent months in a cyclical upturn since December 2018, which is overwhelming a trend slowdown that has been underway since October 2009. Aggregate deposits in banking system have been growing 8-10% year-on-year since the beginning of FY19, marginally higher than its 15-year trend.

Similar to Sensex return, small savings substitute bank deposits in the short-run but supplement deposits in the long-run, reflecting that limits on income tax exemption eventually evens out substitution effects and allow income to be the key determinant of both in the long-run.

Besides income, assured returns, liquidity and safety are also the factors that impinge upon households’ choice of financial instruments. Consequently, there has been growing popularity of mutual funds and other stock market instruments.

Pattern of aggregate deposit growth is predominantly determined by the behaviour of time deposits, as they contribute 88% to the total deposits in banks.

Returns on the Sensex, inflation and the interest rate on public provident funds (PPF) have been found to negatively impact the growth of time deposits.

The RBI study reveals that income and financial inclusion are long-term structural drivers while the interest rate and Sensex returns impact deposit growth in the short-run.

The study has also focused on changes in deposit behaviour due to demonetisation’s channelisation of financial savings to capital markets, and the shifts it induced in households’ preferences from term deposits to savings deposits.


Other Latest News
PM Modi pitches for structural reforms in agriculture to boost investment
Posted on 15th June 2019
With the farm sector facing headwinds, Prime Minister Narendra Modi on Saturday stressed upon the need for structural reforms in agriculture which would boost private investment, strengthen logistics and provide ample market support to farmers.

Delivering the opening address during the fifth Governing Council meeting of NITI Aayog, PM Modi said that the food processing sector should grow at a faster pace to benefit the farmers.


Importance of Bitcoin futures has been understated, JPMorgan says
Posted on 15th June 2019
Bitcoin futures may be more important than many in the market appreciate, according to JPMorgan Chase & Co.

Recent reports from cryptocurrency asset manager Bitwise and the Blockchain Transparency Institute indicate that only a small percentage of reported trading may be authentic.


Air India spreads its wings, plans flights for Bali, Nairobi and Toronto
Posted on 15th June 2019
Air India plans to launch services from Delhi to Bali, Nairobi and Toronto in the winter schedule as it looks to consolidate its position as the largest carrier on overseas routes from India.

Currently, there is no non-stop service from Delhi to Nairobi and Bali while Air Canada flies daily to Toronto. New services are being proposed as Air India expects the return of its seventeen grounded planes in service by October end.


Indian Oil Corporation in fuel switch drill
Posted on 15th June 2019
Indian Oil plans to set up a diesel exhaust fluid plant in Bengal at an investment of around Rs 150 crore to support the introduction of Bharat Stage-VI compliant fuel from April 1, 2020. The investment is part of the company’s expansion plans in the state across businesses.

RBI asks banks to grout ATMs to wall, pill or floor to enhance security
Posted on 15th June 2019
The Reserve Bank on Friday asked banks to ensure their ATMs are grouted to a wall, pillar, or floor by September-end, except those installed in high secured premises such as airports, to enhance security of the cash vending machines.

In 2016, the RBI had set up a Committee on Currency Movement (CCM) to review the entire gamut of security of treasure in transit.


» Post a FREE Classified Advertisement
Inviting Real Estate Agents, Job Placements Agents, Educational Institutes, Software Service Providers, Real Estate Builders, Marriage Bureaus, Travel Agents, Restaurant Owners, Health & Fitness Centers and other Local Businesses to Post a FREE Classified Advertisement on Cootera.com Classifieds Website.
Jobs in India India Real Estate Automobiles Matrimonials Beauty & Fitness

Add a comment for Slow income growth impending deposit growth: RBI study
Please only use this form to enter comments on the above company. All comments are reviewed before they are displayed on the web site. Not all comments may be displayed. Check back with us to see if your comments have been displayed.
If you want us to email the comments posted by users, please Subscribe by email
Name*
Comments*
Security Code*
 

Be the first person to write a business review for Slow income growth impending deposit growth: RBI study

Most Read News

Private insurers continue strong growth in May, smaller ones gain more

Wipro rolls out new solutions for aviation sector

L&T Construction bags large orders across various business segments

Rupee rises 8 paise to 69.38 vs $ in early trade

Microsoft unveils Project Scarlett, the next-gen Xbox: All you need to know

More India News

  India Web Directory
Business Profiles
Automotive Directory
IT/ITES/BPO Directory
Hotel Directory
Health Directory
Business Directory
Gems & Jewellery
Education Directory
Real Estate Directory
Agriculture Directory
Logistics Directory
Yellow Pages
NRI Guide
Photo Galleries
Global Web Directory
*** FREE India Classifieds
Order Premium Listings
Submit a Site
Business Reviews
Home
About us
Link to us
Advertise
Contact us
Google Search Keywords: India Catalog, IndiaCatalog, India Web Directory
    © 1999 - 2019 IndiaCatalog.com
    All Rights Reserved
Privacy Statement