How Rs 60,000 cr losses from F&O give banks hope for a savings revival
A Rs 60,000 crore loss, Sebi crackdown, and a hope for banks
As India shifts its investing habits, the allure of high-risk, high-return options is strong. However, this isn't for everyone, as Indian households are losing about Rs 60,000 crore in derivatives trades in a year.
Sebi chief noted, «If Rs 50-60,000 crore annually is lost in F&O (futures & options) trades, that money could be better utilized in IPOs, mutual funds, or other productive areas.» The capital markets regulator reported that retail investors alone lost Rs 52,000 crore in FY24, highlighting the need for stricter controls.
RBI Governor Shaktikanta Das observed a trend where capital markets are increasingly favored over traditional bank savings. This shift concerns banks, as their deposit base is shrinking while more individuals turn to stocks, mutual funds, and other instruments. Das stressed that banks must find new ways to address the gap between credit and deposits.
The market regulator has noted that in FY24, 92.5 lakh retail investors and proprietorship firms have suffered losses in F&O trading. There are worries that household savings are being squandered on speculation rather than being invested productively. In response, the market regulator has introduced a seven-point plan to curb such trades, and the Union Budget has included measures to discourage them.
This situation offers a glimmer of hope for banks. SBI Chairman Dinesh Kumar Khara suggested that as retail investors move away from derivatives, they might return to the banking
