Express News Service
The Reserve Bank of India celebrated the Financial Literacy week last week. They organised online events across social media platforms and the thrust was on three essential things. These included explaining to people that they should borrow for needs and not for wants. The need to borrow from a registered intermediary like a bank or a non-banking finance company. And to ensure that one repays their loans on time and does not miss out on the monthly payments.
Not sure how many of you noticed it. The overall intention is to encourage everyone to borrow sensibly. When it comes to loans, Indian households are conservative compared to those in the United States and other wealthy countries. Personal loans account for `26 lakh crore, according to the latest data from the RBI. That is about 10 per cent of the country’s gross domestic product or GDP. In rich countries like the US, the number is over 80 per cent.
Over the past six months, the Nifty Bank index has jumped 62 per cent. During the same period, the Nifty has moved on by 32 per cent. Stock markets are betting on robust growth in the banking sector over the next several years. They look at the opportunity for banks and NBFCs to lend more to India’s vast population. As countries grow rich, retail loans increase and India is likely to witness a similar boom over the next few years as more