Nirmala Sitharaman on Saturday asked banks to come up with innovative and attractive schemes. (Photo: PTI)
Finance Minister Nirmala Sitharaman on Saturday asked banks to come up with innovative and attractive schemes to mobilise deposits.
Addressing the media after the RBI board meeting, he said deposits and loans are two wheels of a cart and “deposits move slowly”.
Banks, he stressed, need to focus on the core banking business, which is mobilizing deposits and loans to those who need funds.
To overcome the mismatch between deposits and loans, Sitharaman asked banks to come up with “innovative and attractive” deposit schemes to mobilise funds from people.
RBI Governor Shaktikanta Das said interest rates are unregulated and banks often increase deposit rates to attract funds.
“Banks are free to decide on interest rates,” Das added.
RBI Governor Shaktikanta Das, while unveiling the bi-monthly monetary policy earlier this week, also expressed concern over the mismatch between deposits and loans in the banking sector.
He had said banks were relying more on short-term non-retail deposits and other liability instruments to meet rising credit demand.
This, he warned, “could expose the banking system to structural liquidity problems. Banks could therefore focus more on mobilizing household financial savings through innovative products and services and making the most of their extensive branch network.”
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: August 10, 2024 | 1:29 PM IS
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