Budget 2025: Tax incentives, higher deposit insurance key asks for banks
Subscribe to enjoy similar stories. Banking is at the heart of any nation's growth. When democratised, it becomes a financial engine capable of uplifting the masses on a large scale.
The Indian banking industry is currently at a significant crossroads. It's struggling to reinvent itself in the face of rapidly scaling fintechs, who are fast capturing the untapped customer segment. PwC's research shows that from FY21 to FY24, the number and value of loans disbursed by fintechs have grown by a CAGR of 81% and 46%, respectively.
This growth has been facilitated by fintech entities harnessing technology to extend their reach, streamline operations through automation and enhance credit accessibility. These players have been offering a broad spectrum of loan products tailored to the diverse needs of borrowers—especially smaller borrowers, enabling financial inclusion. Additionally, growing consumer interest in financial instruments beyond traditional fixed and recurring deposits is prompting bankers to reassess their product offerings.
An increasing preference among investors for higher-yielding investments, such as equities and mutual funds over bank deposits, has led to a decline in the share of bank deposits in the financial assets of Indian households. According to data released by RBI, the proportion of household financial assets held in bank deposits dropped from 56.3% in FY20 to 44.2% in FY24. A closer look at the RBI data also reveals that while term deposits grew 13.1% in H1FY25, current account saving account (CASA) deposits increased by only 6.5%.
Read more on livemint.com
