SME Times News Bureau | 23 Jun, 2021
The opening of the economy and easing of Covid infections last year has affected the financial savings of households.
According
to Preliminary Estimates of Household Financial Savings released by
Reserve Bank of India (RBI), household financial savings is placed at
8.2 per cent of GDP in Q3 of 2020-21. This is a sequential moderation
for the second consecutive quarter after having spiked in the
pandemic-hit first quarter of 2020-21.
The moderation was driven
by a significant weakening in the flow of household financial assets,
which more than offset the moderation in the flow of household financial
liabilities, the RBI said in its report.
The ratio of household
(bank) deposits to GDP also declined to 3.0 per cent in the October
-December quarter of FY21 from 7.7 per cent in the previous quarter.
The
RBI said that despite higher borrowings from banks and housing finance
companies, the flow in household financial liabilities was marginally
lower in Q3, following a marked decline in borrowings from non-banking
financial companies.
The household debt to GDP ratio, which is
based on select financial instruments, has been increasing steadily
since end-March 2019. It rose sharply to 37.9 per cent at end-December
2020 from 37.1 per cent at end-September 2020.
