Indians love to deal in cash, not stocks and shares | union-budget$budget-in-numbers | Hindustan Times
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Indians love to deal in cash, not stocks and shares

Indians love to deal in cash. Even after a quarter century of reforms in the financial and capital markets, only about 5% of household savings are held in shares, debentures and mutual funds.

union budget Updated: Feb 28, 2016 15:54 IST
When it comes to financial savings Indians are averse to risk.
When it comes to financial savings Indians are averse to risk.(Shutterstock)

Indians love to deal in cash. Even after a quarter century of reforms in the financial and capital markets, only about 5% of household savings are held in shares, debentures and mutual funds.

When it comes to financial savings Indians are averse to risk and prefer to keep their savings in provident funds - almost 20% - and bank accounts - almost 50%.


The graph shows a slump in post office and other small time savings from 2005-06. The graph also shows that bank deposits and LIC funds shot up after the same year.

One of the reasons for the slump is the withdrawal of 10% bonus in the post office monthly income scheme on 2006 February.

After the withdrawal, the deposits in post office schemes, fell by 30%. Banks benefitted by this dent as they offer easier liquidity.

Charts by Harry Stevens, Research by HT Business Desk