Several banks have raised their lending and deposit rates over the past few weeks, though one would not have guessed it going by newspaper headlines alone. These headlines have almost inevitably told readers about how housing and car loans will become more expensive—and not that deposit rates have gone up as well. This perhaps tells us a lot about how middle class India has changed in recent years.
Banks are still the main magnet for financial savings in the country, but middle class portfolios have changed. Money has also gone into mutual funds, real estate and insurance plans. Deposits in banks—and hence the rates on them— are far less important.
Middle-class families have also borrowed more than ever to buy homes and gizmos. These quiet changes in family balance sheets ensure that we are more interested in what banks charge us for loans rather than what they pay us for deposits. The headlines reflect this.