Savings in deposits by the households rose, however, to Rs 1 trillion (17 per cent) in the year to Rs 6.91 trillion in FY14 as against Rs 5.91 trillion in 2012-13.
They constituted about 59 per cent of the gross financial savings, of which about 53 per cent constituted bank deposits.
Savings in shares and debentures dropped 22 per cent to Rs 33,700 crore (Rs 337 billion) in FY14, from Rs 43,000 in the previous fiscal, according to a RBI report.
Savings by individuals in MFs (through shares and debentures) saw a 40 per cent drop to Rs 21,000 crore (Rs 210 billion) in the reporting year from Rs 35,000 crore (Rs 350 billion), while savings in currency declined 9 per cent to Rs 1.02 trillion from Rs 1.12 trillion.
Net financial savings of households, which is the gross financial saving minus financial liabilities, rose 13 per cent to Rs 8.19 trillion from Rs 7.22 trillion in 2012-13.
The RBI report said: "The gross domestic savings rate as per central statistics office's estimates declined to 30.1 per cent in FY13 from 31.3 per cent in FY12, mainly on account of a decline in the rate of household physical savings.
"The savings rate dipped to the lowest in the past nine years and has accentuated the macroeconomic imbalances.
“The household savings rate have generally hovered around 23 per cent since FY04."
However, looking ahead, the RBI expressed the hope that the measures announced in the Budget 2015 will help improve both investment and savings.
The Budget has raised the personal income tax limit to Rs 250,000, which will increase disposable income and lead to a rise in investment limit under section 80C of the Income-Tax Act.
It also raised annual ceiling limit in PPF to Rs 150,000, which will also encourage savings and improve financing
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