Quarterly Household Savings On Rise: Patra

After some days of Reserve Bank of India (RBI) showed the date that the net financial savings of the households had reportedly plummeted to a five-decade low. Michael Patra, the central bank deputy governor claimed that quarterly numbers have shown an upward movement toward the historical trend. He said this officially on 6th October 2023, Friday. As per the date, the historical average for household savings is around 7.5% of the GDP. If we take a look at the level of savings it has gone through 14% every single year. In the quarterly numbers, it has increased from 4.2% in Q1 (2022-2023) of total 7% in Q4. It can be said that that it is going to toward the trend in the history.

Patra

In September 2023, RBI released a monthly bulletin in which we saw that the net financial savings of Indian households had now spiked to 11.5% of the GDP at the time of the COVID-19 pandemic. Since then it has been going down. From 2022 to 2023 it went low to 5.1% of GDP down from 7.2% in 2022. The central bank deputy governor Michael Patra said that, at the time of the COVID-19 pandemic public was not allowed to go out of their house because of the pandemic restrictions at that time people built up precautionary savings. He also said that as all the restrictions have been removed now and people have started going out and have also started spending money it has drawn down the precautionary savings.

Michael Patra has reported that there is a 14% increase in the financial assets. And the net financial assets have declined because of the whopping rise of 75.5% in the financial liabilities. there is a big difference between financial liabilities and financial assets. He claimed that financial liabilities have increased because of the shift from financial savings to physical savings. The amount was going to the housing sector at that time. Continue reading.

Micael Patra further added that there is a chance that they are going to transfer from financial savings to physical savings which is going to be in the way of investment, and in the next everybody is going to see a big increase in the physical investment. Many things are included in household liabilities such as loans from banks and non-banking financial companies, assets include bank deposits, provident funds, currency, investments, life insurance, and investments in financial institutions. Now it has been announced that the personal loans given by the banks now have many components which the key are vehicle loans and real estate loans.

Prakash Israni

Prakash Israni

Prakash, the content creator for Techballad, has built a solid reputation for himself over the course of more than ten years of blogging