New Delhi [India], July 19 (ANI): Households are choosing the <keyword id="20033427" type="General" weightage="20" keywordseo="capital-markets" source="keywords">capital markets</keyword> over the <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword> to park or invest their <keyword id="25450" type="General" weightage="20" keywordseo="savings" source="Orion">savings</keyword>, highlighted <keyword id="64190" type="General" weightage="20" keywordseo="RBI-Governor" source="Orion">RBI Governor</keyword> <keyword id="3083263" type="General" weightage="20" keywordseo="Shaktikant-Das" source="Orion">Shaktikant Das</keyword> during his address at FE Modern BFSI (Banking, Financial Services, and Insurance) Summit 2024 on Friday. Governor Das highlighted that traditionally, banks were the primary choice for households to invest their money. However, there has been a noticeable change in consumer behaviour, with a growing preference for capital markets and other <keyword id="5869841" type="General" weightage="20" keywordseo="financial-intermediaries" source="Orion">financial intermediaries</keyword>. He noted, "Households and consumers who traditionally leaned on banks for parking or investing their savings are increasingly turning to the capital markets and other financial intermediaries." This trend indicates a broader diversification of <keyword id="22469312" type="General" weightage="20" keywordseo="household-investments" source="Orion">household investments</keyword> into <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and other savings tools, moving away from traditional investment tools. The Governor stated, "While bank deposits continue to remain dominant as a percentage of the financial assets owned by the households, their share has been declining, with households increasingly allocating their savings to Mutual Funds, Insurance Funds, and Pension Funds." Governor Das also pointed out that this shift in investment patterns has significant implications for the banking sector. Banks now need to explore alternative methods to bridge the gap between credit and deposits. He added, "On their part, banks have sought to fill the credit-deposit gap by increasing their reliance on other sources like short-term borrowings and certificates of deposit, etc. This increases their sensitivity to interest rate movements and poses challenges to liquidity management." The Governor further elaborated on the implications of the shift from CASA (Current Account Saving Account) deposits, stressing that banks must remain vigilant and adaptive. He stated that banks need to continuously focus on improving and refining their credit underwriting standards and the pricing of risks to maintain stability and profitability. Reflecting on recent global banking events, Governor Das drew attention to the banking crises in the US and Switzerland in 2023, which highlighted the risks and vulnerabilities inherent in certain business models. He emphasized the importance of learning from these crises to enhance the resilience of the banking sector. "The banking crisis in the US and Switzerland in 2023 has again brought into focus the risks to banking stability from certain business models and their inherent vulnerability," he added.

Household savings are choosing mutual funds over banks to invest savings: RBI Governor

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	 In a high profile meeting with senior officials of the revenue department, Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> has said that the department may achieve its revenue target for the year due to revival in the economy. The union minister made the point at the review meeting with Principal Chief Commissioners, Principal Directors General, Chief Commissioners and Directors General of Income Tax—in order to analyse the budget targets for Revenue Collections for the current fiscal year 2014-15. 
	 
	“Revenue Collection targets for direct taxes for the FY 2014-15 has been fixed at over Rs 7lakh crore. The department has made net collections as on October 20, 2014 of over Rs 2 lakh crore during the current year (1st April-20th October, 2014). Gross collections were to the tune of more than Rs 3 lakh crore while refunds were made of Rs 80,850 crore during this period. Thus, gross collections grew at the growth rate of 13.6 %”, said the ministry in a statement. 
	 
	He further added that the tax authorities should be company-friendly but at the same time, should also ensure that taxes are paid that needs to be paid. 
	 
	“Certain sectors of economy such as services sector are doing well while other sectors including manufacturing sector are gradually picking-up compared to previous years. The performance of economy during the Quarter 3 and 4 of the current financial year is also expected to be better than previous ones. Finance Ministry Jaitley asked the tax officials to widen the tax base in order to bring more and more people within tax domain. He said that senior officers of the department shall act and behave in a assessee friendly manner but at the same time ensure that tax payers don’t evade tax and must pay the taxes due from them”, the ministry noted. 
	 Interestingly, union minister Jaitley also asked senior officials of the Central Board of Direct Taxes (<keyword id="128665" type="ORGANIZATION" weightage="20" keywordseo="CBDT">CBDT</keyword>) to keep a hawk eye on the trail of <keyword id="6356023" type="UNKNOWN" weightage="20" keywordseo="Black-Money">black money</keyword> in domestic sectors. The union minister noted that recovery of black money and subsequent taxes will help the revenue department achieve its tax targets for the year. 
	 The review meeting was attended by Minister of Commerce and Industry <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword>, Revenue Secretary Shaktikant Das, Chairman CBDT KV Chowdary, members of CBDT, and other senior officers of the Ministry of Finance and CBDT.

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Household savings are choosing mutual funds over banks to invest savings: RBI Governor

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