The RBI annual report shows that time deposits have grown at nearly 11 per cent in the year to March 2021. That is the money lying in bank fixed deposits at an aggregate of ₹160 lakh crore. It is the fastest rate at which fixed deposits have grown. It is reasonable to assume that most of the money belongs to corporates. However, the rate is much higher among households, too.
Broadly, that means you continue to conserve a lot of money. You are saving money for an eventuality considering the uncertainty that lies ahead. The desperation to conserve cash is such that it is happening at a time when interest rates have gone down lower and lower over the past two years.
The RBI attributes the surge in time deposits to depositors’ risk-averse attitude and lack of other avenues. While avenues are limited for corporates due to restrictions on the way they invest surplus funds, individuals have to put idle money to use.
This story is from the June 07, 2021 edition of The Morning Standard.
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This story is from the June 07, 2021 edition of The Morning Standard.
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