Mumbai. If deposit growth lags behind loan growth, structural liquidity problems may arise. Reserve Bank of India (RBI) Governor Shaktikanta Das warned banks on Friday. Das pointed to more problems on the unsecured loan front. He said that despite banks having a large enough portfolio, there is a high threshold for such risky loans. He asked banks to be cautious.

Urging banks to maintain a proper balance between credit and deposit growth, Das said a large part of domestic savings that earlier came into the banking system in the form of deposits is now moving to other instruments such as mutual funds. “Credit growth should not outpace deposit growth by a lot,” he said at an event organised by the newspaper Financial Express.

Especially when banks are required to maintain CRR, SLR, LCR. Das said that for some time now, the process of deposit mobilization has been lagging behind loan growth. This can lead to structural cash problems in the system. He said that banks and NBFCs and other lenders should identify structural changes and prepare their strategy accordingly. Regarding digital fraud, he said that RBI is working with banks and investigating agencies to investigate fake accounts.