Household Savings Returning to Normalcy: RBI DG

Mumbai, Aug 8 (PTI) Reserve Bank Deputy Governor Michael Patra on Thursday said household saving behaviour is returning to "normalcy" now.

Drawing from official data, he said there is not a lot of exposure to equities among the households.

The households had saved higher proportions in financial assets during the pandemic both as a precautionary measure and as the avenues to spend had dried up, and with the ebbing of Covid, there has been a propensity to invest more in physical assets, he said.

"If you take both of them together, then the total household savings have stabilized at around 20 per cent. It was falling for quite a while and now it is stabilized. All in all, I see a return of normalcy in household saving behaviour," he told reporters here.

It can be noted that concerns were raised about the net financial savings dropping to 5.3 per cent, an over four-decade low in FY23 recently.

Meanwhile, Governor Shaktikant Das advised banks to use their branch networks to ensure that they get sufficient deposits to sustain and support their credit growth.

He, however, made it clear that the banks will have to find it by themselves, and the RBI will not micromanage by bringing in any measure to help.

The RBI also said that it is too premature to review the measures on higher risk weights for personal loans introduced in November last year.