Bank Deposits News

Bank deposits underpin much of India’s economic architecture—from part financing government budgets to priority-sector lending. Yet, interest income faces punitive taxation, pushing savers into riskier avenues of investment. It calls for a tax rethink.

The Centre is likely to ask PSBs to identify geographical areas with the most unclaimed deposits, set quarterly settlement targets at the branch level, and develop a standard operating procedure (SoP) to achieve the target

India’s deposit insurance scheme offers wide coverage by number, but not by value—leaving large depositors at risk. With household savings rising, is the RBI’s safety net still fit for purpose?

While Indian banks have improved capital adequacy and asset quality, deposit growth remains a challenge. Experts suggest incentives for retail deposits and a focus on consumption to boost liquidity, alongside a push for financial sector growth to align with the Viksit Bharat vision.

When seen on a full-year basis, higher fresh deposits compared to loans in 2024 has pushed the incremental CD ratio to 89.5%, as against 94% in 2023. The CD ratio indicates how much of a bank’s deposit base is being utilized for loans.

Public policy needs to be viewed from the lens of those it’s ostensibly designed to serve: the people. Research shows only a few items form their view of inflation, for example, but which?

They should treat depositors as business partners if they are to garner sufficient low-cost deposits for lending. Financial repression is not sustainable and could structurally warp the Indian banking system.

In September, the weighted average domestic term deposit rate for public sector banks (PSBs) touched 7%, the first time since March 2017