Banking institute to study spending habits of citizens

The study results will be shared with the banks to help them increase their deposits. “A sizeable section of population like auto-rickshaw drivers and slumdwellers doesn’t have bank accounts. We need to understand if it is due to their small savings. The investment levels like share in equity,realty and bank deposits depend on the income levels of people. The household consumption levels determine the saving patterns of people,” said Pereira.

Experts said the study will not only help banks mobilise deposits,but also assist them in balancing credit-deposit ratio for better “profit margins”. Associate professor (Finance) of NIBM,Dr Arindam Bandyopadhyay said understanding the spending patterns of people and their investment habits will help banks re-work their deposit books and maintain a balance between credit and deposits. “Our earlier studies have shown that the profit margins of banks declined in cases where they didn’t work out an effective balance between deposits and loans. In case of long term investments particularly,banks need to make the maturity adjustments by ensuring a balanced credit deposit ratio,” said Bandyopadhyay.

He added that re-working the credit-deposit balance based on the money flow becomes important “as interest rates have been deregulated and banks can fix their own rates for deposits and loans”.