Bank Deposit Crunch Or Structural Shift? | Top Economists Answer

At the Business Today Banking & Economy Summit, Madan Sabnavis highlighted structural stress in deposit mobilisation, citing falling deposit rates, tax asymmetry favouring equities over debt, and competition from mutual funds. He argued banks need tax incentives for deposits, given their critical role in funding government borrowing and priority sectors, warning that lower returns could hurt senior citizens’ income and consumption. Somya Kanti Ghosh pointed to UPI-led volatility in CASA deposits and stressed protecting over 200 crore deposit accounts while ensuring fair returns. Offering a counterview, Ashima Goyal noted banks’ strong profitability and urged balanced tax reforms across asset classes.