RBI Chief Urges Banks to Innovate Amid Savings Shift

RBI Governor Shaktikanta Das urged banks to leverage their branch network and innovate to attract more household savings, which are increasingly moving towards alternative investment avenues. He warned of potential liquidity issues due to banks relying on short-term non-retail deposits and called for stricter monitoring of personal and top-up loans.

Concerned over household savings moving towards alternative investment avenues, RBI Governor Shaktikanta Das on Thursday urged banks to use their extensive branch network and innovate to mobilize more deposits.

Banks are increasingly relying on short-term non-retail deposits to meet loan demand, potentially exposing them to structural liquidity issues, Das highlighted.

He also expressed concern about the high growth in top-up housing loans and emphasized the need for banks to adhere strictly to regulatory norms. Das pointed out the rise in personal loans and called for careful monitoring and stronger risk management frameworks in IT and cyber security to maintain operational resilience.

(With inputs from agencies.)