Higher risk factor

Increasing exposure to financial assets makes households vulnerable

A key finding of the Reserve Bank of India’s Annual Report is that the household asset-allocation pattern is undergoing a change. A larger share of such savings is now being parked in financial assets, exposing households to greater risks. The RBI’s preliminary estimates indicate that household financial savings, net of financial liabilities, rose to 8.1 per cent of Gross National Disposable Income, or GNDI, in 2016-17. This was on the back of a rise to 7.8 per cent in 2015-16 and 7.2 per cent in 2014-15. Currency holdings and provident fund holdings declined while investments in deposits, insurance, and shares