Deposit growth

The Reserve Bank of India (RBI) expressed its concerns about slow deposit growth in the Indian economy.

Acknowledging the role played by private commercial banks in supporting economic growth during the pandemic and in the ongoing financial market turmoil, the Governor advised that banks “remain watchful” of the evolving macroeconomic situation, including global spillovers.

Global headwinds
The Russia-Ukraine war and the associated prediction of global recession increased the importance of banking deposits.
Monetary policy
The monetary policies across the globe, especially of advanced economies, are being tightened, spurring concerns about financial stability risk in emerging and developing economies.
Lower external demand
The lower external demand drives down export demand obligating economic growth solely driven by domestic demand, which might not be sufficiently strong.
Higher global inflation
Higher global inflation and interest rates impact the flow of capital into the economy, putting downward pressure on the domestic currency and, in certain circumstances, higher imported inflation.
Credit growth
The credit disbursal of commercial banks depends on their deposit growth of it.

Pradhan Mantri Jan Dhan Yojana
Under this, a person not having a savings account can open an account without the requirement of any minimum balance and in case they self-certify that they do not have any of the officially valid documents required for opening a savings account, they may open a small account.
Pradhan Mantri Mudra Yojana
Pradhan Mantri MUDRA Yojana is a scheme launched in 2015 for providing loans up to 10 lakh to non-corporate, non-farm small/micro enterprises.
Promotion of Digital Payments

With the strengthening of the Unified Payment Interface (UPI) by NPCI, digital payments have been made secure compared to the past.
The Aadhar-enabled payment system (AEPS) enables an Aadhar-enabled bank account (AEBA) to be used at any place and at any time using micro ATMs.

Content Source: The Hindu