RBI Governor warns banks against growing gap between credit and deposit growth
Mumbai: Reserve Bank of India (RBI) Governor Shaktikanta Das cautioned on Tuesday that Indian banks must closely monitor the widening gap between credit and deposit growth to prevent a potential structural liquidity issue.
"Young Indians are aspirational. They get attracted to different markets. There is nothing wrong in it, it's a natural process and a positive development," Shaktikanta Das told local television channel NDTV Profit in an interview.
"We are cautioning banks to monitor this situation carefully. There is no problem now, but it can become a structural liquidity problem in the future."
As of July 26, Indian banks saw a 13.7% increase in loans compared to the previous year, while deposits grew by 10.6%, according to the latest provisional data from the RBI.
Strong economic growth and rising urban consumption have driven up loan demand, but deposit growth has not kept pace.
Governor Das emphasized the need for banks to attract more deposits through innovative products and services.
He noted that while credit growth and disbursements have accelerated due to technological advancements, deposit mobilization, which is still primarily conducted through physical channels, has been slower.
IBNS
Senior Staff Reporter at Northeast Herald, covering news from Tripura and Northeast India.
Related Articles
CRR cut, AI ethics push, and SORR benchmark: Experts hail RBI’s pragmatic policy moves
Mumbai: The Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5% while the cash reserve ratio (CRR) has been slashed by 50 basis points to 4 percent, media reports said.
JP Morgan gives 'overweight' rating to Adani Group bonds
Mumbai: US investment bank JP Morgan has assigned an 'overweight' rating to four bonds issued by the Adani Group, citing the group's capacity to scale and grow through internal cash flows, which reduces the likelihood of credit stress.
LG Electronics files DRPH with SEBI; IPO size expected to be over RS 15,000 cr
Mumbai: South Korean electronics giant LG Electronics has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Friday for the proposed public listing of its Indian business, according to a notification on the Bombay Stock Exchange (BSE).
De-dollarisation not on India's agenda; derisking domestic trade is: RBI Governor Shaktikanta Das
Mumbai: India has not initiated any steps towards de-dollarisation and is solely focused on mitigating risks to domestic trade from geopolitical uncertainties, Reserve Bank of India (RBI) Governor Shaktikanta Das clarified on Friday, media reports said.
Latest News
Tamil Nadu: Vijay’s party blames DMK ‘conspiracy’ for Karur stampede, seeks probe by SIT or CBI
India clinch Asia Cup title with five-wicket win over Pakistan
PM Modi urges Indians to go 'Vocal for Local' in festival shopping
Pakistan’s mineral show-and-tell: Sharif and Munir try to charm Trump
