New Delhi: Banks need to carefully monitor the persistent gap between credit and deposit growth because it could become a challenge, leading to liquidity issues, Reserve Bank of India Governor Shaktikanta Das told a local TV media.
"We are cautioning banks to monitor this situation carefully. There is no problem now, but it can become a structural liquidity problem in the future," Das told NDTV Profit.
Banks should also carefully monitor the change in investment strategies of young aspirational Indians, Das said. As of now, the shift from deposits to other investment avenues is not an issue, but in the future, it can lead to a structural liquidity issue. Therefore, banks must introduce new products and services in deposits, as well as use their vast branch networks to their advantage, he explained.
Das said banks should maintain a balance between credit and deposit growth. What is positive, is that banks are raising funds through infrastructure bonds these days at attractive rates, he added.
The RBI chief said a lot of banks are lining up infrastructure bonds to support their balance sheets. Banks and financial institutions raise funds through infrastructure bonds to finance their long-term infrastructure projects. These bonds have a minimum maturity of seven years and are eligible for some regulatory exemptions.
While loans extended by banks rose 13.7 per cent as of July 26 during the current financial year compared to the same period of the previous year, there was only a 10.6 per cent growth in deposits, according to the RBI data.
While credit growth and disbursement have become fast-paced due to technology, deposit mobilisation which is undertaken largely through physical channels was not keeping pace, he said.
Finance Minister Nirmala Sitharaman, at a review meeting, asked the chiefs of public sector banks to accelerate the growth rate of their deposits to match the quicker pace at which the credit is growing.
