Banker warns of systemic risk arising from flight of bank deposits to MFs

A veteran banker on Thursday expressed concerns over the present trend of deposit flight out of banks, saying that if the trend, especially in the Casa segment, is not arrested there could be systemic risks down the line.

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Seeking active participation of government and the regulator to arrest the flight of money into nonbanking assets like equities and mutual funds, IBA chairman MV Rao said if the present trend needs to be contained to avoid systemic risk.