Amid the worst deposit crunch in two decades, RBI urges banks to adjust to changes in how people save | Mint

The Reserve Bank of India (RBI) is addressing a significant liquidity crunch among banks, attributed to a mismatch between credit and deposit growth. Deposits have grown slower compared to the surge in credit demand, leading to structural liquidity issues. This gap is exacerbated by increased withdrawals from savings accounts and a decline in the CASA (Current Account Savings Account) ratio, which is crucial for banks' low-cost funding. The RBI is considering various measures to stabilize the situation, including potential adjustments to policy rates and liquidity infusion. This scenario highlights the ongoing challenge of balancing credit expansion with sufficient deposit inflows.