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<div type="image" title="Are Indians depositing less money in banks, or more in mutual funds? Turns out, it&amp;#39;s neither of those." msid="113663806" hostid="261" sizebytes="1121785"></div> Over the past few months, there’s been a lot of brouhaha about the lagging pace of <keyword id="20202062" type="General" weightage="20" keywordseo="bank-deposits" source="keywords">bank deposits</keyword> in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialisation of <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> in the country or the rising preference of Indians towards <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword> through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="261" meta.entityid="RBI">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by Franklin Templeton, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are household deposits really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. <div type="image" title="Yes, household deposits (as % of total deposits) have dipped, but the drop is far from significant" msid="113663882" hostid="261" sizebytes="306706"></div> Also, we can’t forego the fact that the share of Indian households in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and <keyword id="114757" type="General" weightage="20" keywordseo="savings-account" source="Orion">savings account</keyword> deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (Central Board of Direct Taxes) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of Securities Transaction Tax (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword>, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by <keyword id="45369" type="General" weightage="20" keywordseo="equities" source="Orion">equities</keyword> can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in <keyword id="19998084" type="General" weightage="100" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the Fed recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next MPC (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day. Do you have insights or personal experience to share on your personal finances or money? Contact us at <a target="_blank" class="c-link" href="mailto:businessinsider@timesinternet.in">businessinsider@timesinternet.in</a>.

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<ul><li><keyword id="19899647" type="General" weightage="100" keywordseo="iPhone-16" source="keywords">iPhone 16</keyword> can be delivered to your doorstep in under 10 minutes</li><li>The phone is available on Blinkit, <keyword id="19939136" type="General" weightage="20" keywordseo="BigBasket" source="keywords" meta.keywordsubtype="org" meta.entityname="BigBasket" meta.hostid="261" meta.entityid="BigBasket">BigBasket</keyword> and <keyword id="19939134" type="General" weightage="20" keywordseo="Zepto" source="keywords" meta.keywordsubtype="org" meta.entityname="Zepto" meta.hostid="261" meta.entityid="Zepto">Zepto</keyword></li><li>The iPhone 16 was made available for sale in India today</li></ul> Earlier this morning, <keyword id="19894961" type="General" weightage="20" keywordseo="Apple" source="keywords" meta.keywordsubtype="org" meta.entityname="Apple" meta.hostid="261" meta.entityid="Apple">Apple</keyword> stores in Mumbai and Delhi witnessed huge lines of iPhone buyers, ready to get their hands on the next-gen models. Apple’s iPhone 16 series went for sale in India today and the excitement around the new phones is palpable. However, what if we tell you that you can order an iPhone within the comfort of your home? Blinkit is selling the iPhone 16 promising to deliver it to your doorstep in a few minutes. The phone is also being sold at BigBasket. However, it is to be noted that Blinkit and Big Basket are not selling the pro variants of the iPhone 16. If you are looking for the higher-end variants, you will have to either buy from a store or order it online. In India, the iPhone 16 is priced at ₹79,900, while the iPhone 16 Plus is available for ₹89,900. The <keyword id="20656465" type="General" weightage="20" keywordseo="iPhone-16-Pro" source="keywords">iPhone 16 Pro</keyword> starts at ₹1,19,900, and the iPhone 16 Pro Max is priced at ₹1,44,900. <div type="Article" hostid="261" msid="113214171" title="iPhone 16 Pro with A18 Pro chip launched: Should you upgrade if you own an iPhone 15 Pro?" mstype="2" mssubtype="0"></div> Let us take a look at where you can buy all variants of the iPhone 16 and what are the bank offers available. <h2>iPhone 16 available in under 10 minutes</h2>Blinkit is currently selling the iPhone 16 and iPhone 16 Plus models, though only the 128GB variant is available for purchase. The higher storage options are currently unavailable on Blinkit, and BigBasket. It's still unclear if the Pro models will be added to their listings in the coming week. In addition to Blinkit and Big Basket, the iPhone 16 is also available at Zepto. Blinkit and BigBasket, meanwhile, promise to deliver the phone in under 10 minutes. On the other hand, Zepto is promising to deliver the device in about 30 minutes. <h2>Customer orders iPhone 16 via BigBasket</h2> In a press release, BigBasket shared that a customer from Koramangala, Bengaluru had ordered an iPhone 16 at 8:00 AM and received the product in just seven minutes, at 8:07 am. The customer, upon receiving the product, said as per the press release, “I’ve always trusted bigbasket for my daily needs and groceries. However, I was pleasantly surprised to see that they are also delivering the new iPhone 16. What topped the excitement was getting the iPhone 16 within minutes of ordering! It’s a game-changer in quick delivery.” <h2>Bank offers on the iPhone 16</h2>Shoppers can enjoy savings of up to ₹5000 when purchasing an iPhone 16 using eligible credit cards from Kotak Mahindra, SBI, and ICICI Bank credit cards on Amazon. To make the purchase even more convenient, no-cost EMI options are available for 3 to 6 months through most major banks. Meanwhile, Vijay Sales is offering various deals to select card holders of ICICI bank, SBI, HDFC bank, Kotak Mahindra bank, YES Bank, IDFC FIRST Bank and Federal Bank. EMI options are also available on the website. <div type="Article" hostid="261" msid="113448967" title="You can get free Apple Airpods 4 and Apple Pencil with this limited-time deal in India, details here" mstype="2" mssubtype="0"></div> In addition to this, Apple is also offering its popular Trade-In program, which allows buyers to exchange their old devices for a discount. Depending on the condition and model of the device being traded in, customers can receive anywhere from ₹4000 to ₹67,500 off their new iPhone. In addition to these savings, those purchasing an iPhone 16 will receive a complimentary three-month subscription to Apple Music, Apple TV+, and Apple Arcade, adding even more value to their purchase. <h2>About the iPhone 16 lineup </h2> Apple has introduced some new features in the new iPhone 16 series, aiming to make both the standard and Pro models more advanced and user-friendly. The iPhone 16 and iPhone 16 Plus now boast a new Camera Control button, giving users quicker access to key functions. Both phones are powered by the upgraded Apple A18 chip and come with an improved dual-camera system that includes a new spatial capture feature for enhanced photography. Running on iOS 18 right out of the box, these models are set to receive further smart updates with upcoming software enhancements. The vanilla iPhone 16 features a 6.1-inch display, while the iPhone 16 Plus offers a larger 6.7-inch screen. Both displays are protected by Ceramic Shield technology and reach a peak brightness of 2,000 nits, though they continue to use 60Hz OLED panels. On the camera front, these models come with a 48MP main sensor capable of 2x zoom and a 12MP ultrawide camera that can now take macro shots. For selfies, a 12MP TrueDepth camera is included on both models. The iPhone 16 Pro and iPhone 16 Pro Max take things a step further, with bigger screens and narrower bezels. The Pro comes with a 6.3-inch display, while the Pro Max offers a 6.9-inch one. Both feature Retina XDR OLED screens with a smooth 120Hz refresh rate and up to 2,000 nits of brightness. Both phones are powered by the advanced A18 Pro chip and run on iOS 18. For photography enthusiasts, the Pro models pack a triple-lens setup, including a 48MP main camera, a new 48MP ultrawide lens, and a 12MP periscope camera offering 5x optical zoom. The front-facing camera remains a 12MP TrueDepth unit, and both Pro models now support 4K video recording at 120fps. Like the standard versions, they also come equipped with the new Camera Control button, making it easier than ever to snap photos and capture moments.

You can get the iPhone 16 in under 10 minutes while sitting at home, here is how

Shares of Yes Bank on Monday zoomed over 30 per cent after State Bank of India (SBI) said it will pick up 49 per cent stake in the cash-strapped lender for Rs 2,450 crore. The scrip witnessed a sharp rise, spiking 29.63 per cent to Rs 21 on the BSE. On the NSE, it jumped 32.20 per cent to Rs 21.35. SBI on Saturday announced it will pick up a 49 per cent stake in Yes Bank for Rs 2,450 crore and clarified that all the deposits and liabilities of the reconstructed bank will continue in the "same manner". "Yes Bank has 255-crore shares of Rs 2 per share. SBI will be issued 245 crore shares at a price of Rs 10 per share for Rs 2,450 crore. This will be 49 per cent of the share capital of the reconstructed bank," the State Bank said in a statement. SBI Chairman Rajnish Kumar had earlier said that it had set a maximum investment limit of Rs 10,000 crore for Yes Bank reconstruction process. SBI shares were trading over 4 per cent lower at Rs 258.50 on the BSE. Yes Bank has been struggling to raise capital amidst its dwindling financial health. It sought to raise USD 2 billion initially during this fiscal, which was then pruned to USD 1.2 billion as it could not rope in any investor. See also: <a href="https://www.businessinsider.in/finance/news/finance-minister-assures-employment-and-salary-at-yes-bank-at-least-for-one-year/articleshow/74514015.cms">Finance Minister assures employment and salary at Yes Bank at least for one year</a> <a href="https://www.businessinsider.in/finance/news/yes-bank-share-price-falls-10-after-rbi-limits-withdrawals/articleshow/74504094.cms">Yes Bank share price nose dives 72% after RBI limits withdrawals</a> <a href="https://www.businessinsider.in/finance/news/rbi-has-a-new-scheme-to-rescue-yes-bank-will-be-released-shortly-says-shaktikanta-das/articleshow/74506268.cms">RBI has a new 'scheme' to rescue Yes Bank — will be released shortly, says Shaktikanta Das</a>

Yes Bank shares shoot up by 30% after SBI decides to buy stake

Before the Reserve Bank of India put in a limit of ₹50,o00 on withdrawals by depositors in Yes Bank, the shares of the private bank zoomed nearly 27% on March 5 on source-based reports that the government has asked the State Bank of India (SBI) to lead a consortium to buy stake in Yes Bank. 
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 However, the midnight statement from SBI, the country's largest bank, was far more non-committal than what investors of Yes Bank would hope for. SBI and the Life Insurance Corporation of India (LIC) will acquire shares at ₹2 per share. The two state-run companies will acquire 49% stake for a total of ₹490 crore, the Economic Times reported citing sources. However, SBI seems to be approaching Yes Bank with more than adequate caution. "No such negotiations/events took place. However, the matter in regard to Yes Bank was discussed at the meeting of the Central Board of the Bank on March 5 and an in-principle approval has been given by the Board to explore investment opportunity in the Bank," the <a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/477eac4e-fa44-4a91-82e8-7394795624d4.pdf" data-type="tilCustomLink" target="_blank">SBI response to the exchanges said</a>. 
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 In essence, SBI is saying that it will explore the possibility of investing in Yes Bank but it is no way a certainty. This is yet another example of how investors, particularly the small investors, have been trapped buying shares of Yes Bank based on rumours. Between June and September 2019, the public stake in Yes Bank has more than doubled as people bought the bank's shares hoping to make a quick buck while the big investors including institutions offloaded their stake in the bank that was slowly sinking into an abyss. Global brokerage JP Morgan reportedly said that the bailout will come at a large cut for equity holders. "We believe forced bailout investors will likely want the bank to be acquired at near zero value to account for risks associated with the stress book and likely loss of deposits (Q3 financials have still not been disclosed)," it said, according to an IANS report. Aside from this, people who have money deposited in Yes Bank accounts found themselves stuck as some ATMS, and even net banking including the mobile app did not function soon after the RBI announced the moratorium. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/yes-bank-mobile-and-net-banking-down-after-rbi-limits-withdrawals-to-50000/articleshow/74499754.cms" data-type="tilCustomLink" target="_blank">Yes Bank mobile and net banking down after RBI limits withdrawals to ₹50,000</a> <a href="https://www.businessinsider.in/finance/news/yes-bank-mobile-and-net-banking-down-after-rbi-limits-withdrawals-to-50000/articleshow/74499754.cms" data-type="tilCustomLink" target="_blank">Yes Bank under CEO Ravneet Gill⁠— eight months of wild mood swings</a>

SBI statement on proposed Yes Bank bailout is far from reassuring

IDFC First Bank on Sunday said it will make an equity investment of Rs 250 crore in beleaguered Yes Bank to acquire 25 crore equity shares. "...duly authorized committee of the Board of Directors of IDFC FIRST Bank Ltd had at its meeting held on March 14, 2020 accorded approval for an equity investment of upto Rs 250 crores comprising upto 25 crore equity shares at a price of Rs 10 each and face value of Rs 2 each, under the proposed Scheme of Reconstruction of Yes Bank Ltd under the Banking Regulation Act, 1949, subject to regulatory and government approval(s), if any," the bank said in a BSE filing. Earlier on Saturday, Federal Bank had committed to investing Rs 300 crore in Yes Bank for subscription of its 30 crore shares. The Centre on Saturday notified the YES Bank Limited Reconstruction Scheme, 2020, a day after the Union Cabinet approved a reconstruction plan proposed by the RBI for bailing out fund-starved Yes Bank. The authorised capital of Yes Bank has been increased to Rs 6,200 crore, Finance Minister Nirmala Sitharaman said on Friday. As per the reconstruction scheme, moratorium on the troubled lender will be lifted on March 18. Under the plan, state-run SBI will infuse Rs 7,250 crore in the crisis-ridden bank and take 49 per cent equity. As per the rescue plan, ICICI Bank will invest Rs 1,000 crore, mortgage lender HDFC Rs 1,000 crore, Axis Bank Rs 600 crore, Kotak Mahindra Bank Rs 500 crore, Bandhan Bank and Federal Bank Rs 300 crore each. There will be a three year lock-in period for all the investors. However, the lock-in period for SBI would be only for 26 per cent of shareholding. It would be 75 per cent in case of other investors. KKS RVK

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Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

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You can get the iPhone 16 in under 10 minutes while sitting at home, here is how

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Yes Bank shares shoot up by 30% after SBI decides to buy stake

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SBI statement on proposed Yes Bank bailout is far from reassuring

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Yes Bank gets Rs 250 crore from IDFC First Bank

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