In five years, household’s loans from banks tripled, fund flow in equity market up nearly 3 times

The latest data compilation from the Ministry of Statistics reveals a major shift in household financial behaviour. Between FY19-20 to FY23-24, cash holdings decreased, while investment in shares has nearly tripled. In the same period, households’ advances from banks have surged over three times.

While the National Accounts Statistics – 2025, prepared by the Statistics Ministry, does not explicitly explain these changes in the ‘Financial Assets and Liabilities of Household Sector’, it is likely that the post-Covid demand recovery, coupled with relatively stagnant income growth, prompted increased borrowing from banks. Simultaneously, the bull market and a record number of IPOs likely fuelled greater investment in the stock market.

The data highlights a substantial 284 per cent increase in bank advances. Despite the absence of delinquency figures in the report, a Finance Ministry statement noted a significant reduction in gross Non-Performing Assets (NPAs) to ₹4.75 lakh crore by the end of FY23-24, down from ₹10.36 lakh crore. This decrease reflects the positive impact of measures like the Insolvency and Bankruptcy Code (IBC), amendments to the SARFAESI Act, and the Prudential Framework for Resolution of Stressed Assets.

Going digital

Over the same five-year period, household cash holdings declined by over 58 per cent, while deposits with banks and NBFCs rose by 57 per cent. This shift can be partly attributed to the surge in digital transactions. A presentation by the Financial Services Department and the National Payment Corporation of India (NPCI) showed that digital payments accounted for 80 per cent of retail payments in FY23-24, with total transaction volume exceeding 13,100 crore and value surpassing ₹200 lakh crore. The ease of use and expanding network of UPI have made it the preferred real-time payment method for millions.

The Statistics Ministry’s data also reveals a 191 per cent increase in household investment in equity and debentures (including Mutual Funds). The Economic Survey 2024-25 attributed this growth to strong macroeconomic fundamentals, healthy corporate earnings, supportive institutional investment, robust SIP inflows, and increased formalisation, digitisation, and accessibility.

The survey further noted heightened listing activity and investor enthusiasm in the primary markets during FY25, despite market volatility and geopolitical uncertainties.

India’s share in global IPO listings rose significantly to 30 per cent in 2024 from 17 per cent in 2023, making it the leading contributor to primary resource mobilisation globally. Total resource mobilisation from primary markets (equity and debt) reached ₹11.1 lakh crore between April and December 2024, up 5 per cent compared to the entire FY24. An NSE report indicated a substantial rise in investor numbers to 13.2 crore as of December 31, 2024, from 4.9 crore in FY20.

Published on May 18, 2025

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