RBI Governor urges banks to monitor credit-deposit gap.
Mumbai: Indian banks need to carefully moni- tor the gap between credit and deposit growth to avoid a po- tential structural liquidity issue, the governor of the Reserve Bank of India (RBI) said Tuesday.
“Young Indians are aspira- tional. They get attracted to dif- ferent markets. There is nothing wrong in it, it’s a natural process and a positive development,” Shaktikanta Das told local tele- vision 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 liquid- ity problem in the future.”
Indian banks’ loans rose 13.7% as of July 26 from a year ear- lier, while deposits grew 10.6%, latest provisional data from the RBI showed.
Healthy economic growth and rising urban consumption has boosted loan demand but de- posit growth has lagged.
Banks must garner more de- posits through innovative prod- ucts and service offerings, Governor Das said. While credit growth and disbursement has become fast paced due to tech- nology, deposit mobilisation, done largely through physical channels, was lagging, he said.
