← External Forces: Demographic, Consumer & Market (all topics)
Financialisation of household savings
What it is
Indian households have historically held savings in gold, land and bank deposits. A visible shift is under way toward mutual funds, equities, insurance and pension products, with monthly SIP flows near record levels and demat accounts multiplying
The counterpart is slower growth in bank deposits relative to credit
Impact on industries
- The structural growth engine for asset managers, insurers, brokers, wealth managers and market infrastructure - flows compound without needing new savers
- Deepens domestic institutional capital, which cushions equity markets against foreign outflows and supports primary issuance
- Directly drains bank CASA and term deposits, which is why the system credit-deposit ratio has reached record levels and deposit competition has intensified
- A large cohort has never seen a prolonged bear market so flow stability is untested, and gold retains its cultural and collateral role