Banking Preferences and Competition
“When individuals select a bank, they look for a strong branch and ATM network, a good tech stack, and a complete ecosystem,” Thakkar explained. “You may want to open a securities account or access mutual funds, life insurance, and general insurance—all in one place. There are largely four large private sector banks and one public sector bank that make the cut. The rest are tier-II and not quite at the same level. This is the space where we track opportunities.”
SIP Flows and Banking Deposits
On concerns about SIP inflows affecting bank deposits, Thakkar said: “Bank lending depends on well-capitalized companies. Money doesn’t really leave the banking system. When an individual invests in a mutual fund, the money moves from their account to the fund’s account, and when the fund buys stock, it goes to someone else’s bank account. There can be some disintermediation if money flows into corporate bonds, but that hasn’t taken off in India. Banks don’t need to worry too much.”
Retail Participation and Market Behaviour
Thakkar noted, “More demat accounts are being opened, and a lot of activity is happening in the F&O space. Last year, 1.7 lakh crores went into IPOs, while 1.06 lakh crores were straight losses in futures and options. Financial literacy has improved, but a large segment still engages in gambling-like activities. Many investors are new and haven’t experienced a full market cycle, so expectations are high and confidence may waver in a prolonged sideways or downward market.”
Behavioural Shifts in Investing
“Participation has become extremely easy—buying and selling happens at a click,” Thakkar said. “Gamification encourages short-termism. The instant rewards, like app notifications and visual cues, create dopamine-driven behaviour and encourage quick trading rather than long-term investing.” Global Trends: Dedollarization and Commodities
On the future of the dollar, he observed: “International trade will continue to be priced in dollars. But as a store of value, central banks are looking for alternatives due to persistent US fiscal deficits, debt ceiling issues, and geopolitical factors. The dollar may remain a medium of transaction, but reserves are being diversified.”
On gold, he added: “Predicting commodity prices is challenging. Many reserves are uneconomical at current prices, but as prices rise, mining becomes viable and supply increases. So, while prices may rise, timing and magnitude are difficult to forecast.”
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