RBI Governor Shaktikanta Das
To control inflation in the country, when the Reserve Bank of India (RBI) started increasing repo rates, they reached 6.50 per cent. It has been about 17 months now and the Reserve Bank has not made any change, but in the meantime, banks have been seen increasing interest rates not only on their deposits but also on loans. After all, why are banks increasing the burden on people’s pockets?
When you dig deeper into it, you will see the concern of the RBI, which it has been talking about for many months. The RBI is concerned that the tendency of borrowing in the country, especially small loans without collateral, is increasing. Now the RBI has also taken many steps in this regard. Now the banks have also found a way out.
Demand for loans is more than just deposits in banks
Banks collect funds from different sources, including ordinary people. For this they receive a fixed interest. They then give this money as a loan and make money from the interest. But banks can only disburse money on loan up to a certain limit of their deposits. They must also keep some money with them for use in case of emergency. This is called the credit-deposit ratio.
Recently, it has been seen that there is so much demand for loans in the market that some banks are distributing more loans than their deposits. To do this, they are also selling their assets, such as government bonds. If we look at the loan-deposit ratios of some banks, HDFC Bank distributes loans for 104% of its deposits. At Axis Bank too, it has reached 90%. While, generally, it is only 80%.
Recently, RBI Governor Shaktikanta Das held a meeting with the CFOs of all the major commercial banks in the country. He expressed concern over this issue. Not only this, he was directed that the banks should strictly follow the rules in auditing their finances. Due to all these things, the banks are now trying to increase their deposits.
There will be benefits to depositing money.
Recently, many banks in the country have launched new savings schemes or FDs. These offer higher interest than usual, so people get benefited by making deposits. Like State Bank of India, it launched Amrit Vrishti FD. Here, interest up to 7.25 percent is given on deposits for 444 days. Similarly, Bank of Baroda gives 7.15 percent interest for 666 days and 7.25 percent for 399 days on Monsoon Dhamaka.
