Due to COVID-19, people spent a lot of money on treatment, bank deposits decreased, RBI disclosed

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The article states that the rate of decline in bank deposits has also been higher than that of bank loans. This shows that this time the household savings deposited in banks have decreased.

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During the second wave of the COVID-19 pandemic, people’s bank deposits and cash in hand have been adversely affected. This shows that due to the epidemic, people have got a lot of money from the expenditure on treatment. This has been said in an article by officials in the monthly magazine of the Reserve Bank of India (RBI). It states that the share of bank deposits in the total wealth of a family is about 55 percent. On a monthly basis, it declined by 0.1 per cent at the end of April 2021, while it increased by 1.1 per cent in April 2020.

The article states that the rate of decline in bank deposits has also been higher than that of bank loans. This shows that this time the household savings deposited in banks have decreased. This is in contrast to the increase in savings seen during the first wave. It said, the cash with the people has also decreased significantly in April 2021 and stood at 1.7 per cent, as compared to an increase of 3.5 per cent in the same month a year ago. This means that due to the COVID-19 epidemic, people have spent a lot of money on treatment.

People save more in uncertainty

In this, when there is more uncertainty, people save more as a precaution and there is a reduction in deliberate spending. This is reflected in the figures of private final consumer expenditure during the pandemic period. According to the preliminary estimates of RBI, the financial savings of the family declined to 8.2 percent in the third quarter of 2020-21 from 21 percent and 10.4 percent respectively in the previous two quarters.

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Bhagyashree Soni
Bhagyashree Soni
Bhagyashree Soni is a software engineer with soft writing skills. She is a degree holder from the International School of Entrepreneurial Leadership. She has been a state-level badminton champion and chess player. A woman with a forthright attitude enjoys her writing passion as her chosen career. Writing in the context of feminism, social-cause and entreprenurship is her forte.
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