According to the ASSOCHAM report, the growth of savings deposits in banks has slowed down after Covid. Indian households are now investing their savings in market-related instruments like equities and mutual funds. This is being considered a healthy financial change.
New Delhi [भारत]July 23 (ANI): The growth in savings deposits with scheduled commercial banks (SCBs) has slowed in the post-Covid years, as Indian households are increasingly deploying their financial savings into market-linked investment instruments like equities and mutual funds, according to a report by Assocham Global Research.
Why has the growth of savings deposits slowed down?
The report titled “Pattern of Savings Deposits with Scheduled Commercial Banks in India” said the annual average growth in savings deposits slowed to 8.6 per cent during FY 2020-21 to FY 2024-25, compared to 14.8 per cent during FY 2015-16 to FY 2019-20. “This slowdown reflects a healthy evolution in household financial behavior rather than any weakening of the deposit base, as savings deposits remain an essential part of household financial portfolios, while investors allocate a portion of their savings to other financial assets,” the report said.
Participation of retail investors increased in capital market
The report further said that participation of retail investors in the capital market has increased in the post-pandemic period. Citing the Economic Survey 2025-26, it said the number of equity investors increased from around 3.1 crore in FY20 to over 11 crore by FY25, indicating a growing preference for equity investments among households. It also cited RBI data showing that the share of equity and investment funds in total household financial assets increased from 15.7 per cent in March 2019 to 23 per cent by March 2025, while mutual fund assets crossed Rs 80 lakh crore.
Despite slow growth, continuous increase in savings deposits
The report said that despite the slowdown in growth, savings deposits have continued to expand. Total savings deposits with scheduled commercial banks increased from Rs 13.77 lakh crore in FY 2010-11 to Rs 65.33 lakh crore in FY 2024-25, registering an overall growth of about 374 per cent over the 15-year period. In the last decade alone, savings deposits grew by 158 per cent, from Rs 25.36 lakh crore in FY 2015-16 to Rs 65.33 lakh crore in FY 2024-25.
Dominance of Indian banks in savings deposits
Indian banks maintained their dominance in mobilizing savings deposits, accounting for 99.1 per cent of total savings deposits in FY 2024-25, amounting to Rs 64.77 lakh crore, according to the report. Foreign banks accounted for less than one percent of total savings deposits, reflecting their greater focus on corporate banking, trade finance and wealth management rather than retail deposits.
Expectation of growth in future also
The report also noted that the long-term expansion in savings deposits has been supported by financial inclusion initiatives, wider banking reach and adoption of digital banking. It noted that precautionary savings during demonetization and the COVID-19 pandemic in FY 2016-17 temporarily boosted deposit growth, before it normalized as households diversified their investments.
“Overall, India’s savings deposit system is large, resilient and well-positioned for future growth. Continued financial inclusion, adoption of digital banking, supportive regulatory measures and continued household engagement with the formal financial sector are expected to further strengthen the savings deposit base and support long-term economic growth,” the report said. (ANI)
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