With interest rate on fixed deposits fallen significantly over the past many months, bank deposits may be finding their way to the equity markets, a research report from State Bank of India said. “We believe, in the Indian context, there could have been the flight of bank deposits to the equity markets as evident from increasing participation of retail investors from April 2019, albeit with some volatility,” the report authored by Soumya Kanti Ghosh, Group chief economic adviser, SBI, observed. The report said when the asset quality review was initiated by the RBI in 2015, the dates of bank results went well beyond their usual timing. Simultaneously, bank results are now being pushed to be declared more within the first month of the preceding quarter that went by,” it said. “Thus, pushing forward of the result date could clearly act as an indicator of banking sector asset quality,” the report said.

Source: The Hindu November 18, 2019 16:52 UTC