Financialization of Indian Households: Trends in Savings and Borrowing

Vidhya Soundararajan, Aishwarya Bhamidipati, Twincle Halder and Vijayshree Jayaraman
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Aishwarya Bhamidipati: Centre for Advanced Financial Research and Learning (CAFRAL)
Twincle Halder: Centre for Advanced Financial Research and Learning (CAFRAL)
Vijayshree Jayaraman: Centre for Advanced Financial Research and Learning (CAFRAL)

Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL)

Abstract: This article examines how Indian household balance sheets have changed over the past three decades. Near-universal bank account ownership, digital payments, and wider credit access have deepened household participation in the financial system. This financialization has coincided with important shifts in both savings and borrowing. On the asset side, deposits have declined as a share of household financial savings, while market-linked instruments such as mutual funds, shares, insurance, and pension products have gained prominence. On the liability side, household borrowing has expanded rapidly, with private banks, NBFCs, and FinTech lenders playing a growing role. Although credit growth has supported consumption, housing, and entrepreneurship, it has also increased exposure to unsecured lending and repayment stress among riskier borrowers. The article concludes by highlighting the macroeconomic risks associated with rising household debt and discussing their policy implications.

Keywords: Household finance; Financialisation; Household debt; Financial savings; Consumer credit; Digital lending; FinTech; NBFCs; Financial inclusion; Retail credit; Financial stability; India (search for similar items in EconPapers)
JEL-codes: D14 E21 G21 G28 G51 O16 (search for similar items in EconPapers)
Pages: 15
Date: 2026-05-27
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Persistent link: https://EconPapers.repec.org/RePEc:ris:cafral:023049

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