Household Savings Behaviours Return to Normalcy, Says RBI Official

Reserve Bank Deputy Governor Michael Patra highlighted that household saving behaviours are stabilizing as investment shifts back to physical assets post-pandemic. Despite previous concerns over declining net financial savings, Patra acknowledged a return to normalcy. Meanwhile, Governor Shaktikant Das urged banks to independently bolster their deposits to support credit growth.

Reserve Bank Deputy Governor Michael Patra on Thursday announced that household saving behaviour is returning to 'normalcy'.

Referencing official data, he observed that households have limited exposure to equities but have increased investments in physical assets post-pandemic. Financial asset savings were notably high during the pandemic due to limited spending avenues.

Patra indicated that household savings now stabilize around 20 per cent, reflecting a return to normalcy. Concerns about net financial savings dropping to a four-decade low of 5.3 per cent in FY23 were mentioned.

Meanwhile, Governor Shaktikant Das urged banks to leverage their branch networks to secure sufficient deposits for sustaining credit growth without relying on the RBI's intervention. The review of higher risk weights for personal loans remains premature.