Monetary Policy
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Analysed 50
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31 DAYS AGO | Mumbai, India |
RBI's Cash Flood Won't Last
Event Summary
The Reserve Bank of India has expressed concern over a growing structural gap between bank credit and deposit growth, warning it could strain liquidity. This comes alongside a shift in household savings away from banks and ongoing regulatory scrutiny of unsecured lending practices.
Reserve Bank of India (Regulator)
"Warns that rapid credit growth funded by short-term borrowing creates structural liquidity risks and requires prudence from lenders."
Key Facts
"Bank credit growth outpaces deposit growth by over 6 percentage points. Household net financial assets have fallen sharply as a share of GDP over three years. The RBI increased risk weights on unsecured loans in November 2023."