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What is the primary reason for the increasing disparity between the deposits and credit growth in the banking sector as highlighted in the provided content?
  • a)
    Decrease in household savings
  • b)
    Shift of household savings from banks to capital markets
  • c)
    Government regulations on deposit growth
  • d)
    Decrease in bank lending practices
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
What is the primary reason for the increasing disparity between the d...
The primary reason for the widening gap between deposits and credit growth in the banking sector is the shift of household savings from banks to capital markets. This shift has been fueled by various factors such as higher returns in capital markets, improved digital infrastructure, and increased retail participation. As more individuals choose to invest in capital markets, banks are facing challenges in attracting and retaining deposits, leading to an asset-liability mismatch.
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What is the primary reason for the increasing disparity between the deposits and credit growth in the banking sector as highlighted in the provided content?a)Decrease in household savingsb)Shift of household savings from banks to capital marketsc)Government regulations on deposit growthd)Decrease in bank lending practicesCorrect answer is option 'B'. Can you explain this answer?
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What is the primary reason for the increasing disparity between the deposits and credit growth in the banking sector as highlighted in the provided content?a)Decrease in household savingsb)Shift of household savings from banks to capital marketsc)Government regulations on deposit growthd)Decrease in bank lending practicesCorrect answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about What is the primary reason for the increasing disparity between the deposits and credit growth in the banking sector as highlighted in the provided content?a)Decrease in household savingsb)Shift of household savings from banks to capital marketsc)Government regulations on deposit growthd)Decrease in bank lending practicesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the primary reason for the increasing disparity between the deposits and credit growth in the banking sector as highlighted in the provided content?a)Decrease in household savingsb)Shift of household savings from banks to capital marketsc)Government regulations on deposit growthd)Decrease in bank lending practicesCorrect answer is option 'B'. Can you explain this answer?.
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