For the longest time, the Indian mutual fund industry was a story of latent potential as risk-averse Indians, even for their long-term savings, preferred the safety of bank deposits to the savvy of mutual funds. In recent years, that potential is starting to be unlocked as more investors gravitate towards mutual funds as a savings and investment habit. Where in India might be more money like that located?
It’s a business question for chief marketing officers (CMOs) of mutual funds as they try to find new markets and new investors. A dataset that can provide direction to that search is the district-wise data on deposits that India’s central bank releases on a quarterly basis, the last being as of June 2017.
This Reserve Bank of India (RBI) dataset carves India into 666 districts. For each district, it breaks down total deposits available with a scheduled bank into three categories:
Current deposits: Typically, used by businesses. For the sake of the question we are trying to answer, we will keep this aside, and focus on the other two deposit categories.
Savings deposits: Fluid money belonging to individuals.
Term deposits: Sticky money belonging to individuals and businesses.
Here are two takeaways from this dataset.
1. Metros matter: Much as India is growing beyond her big cities, its current economic nerve centres—and personal wealth—are still concentrated in and around the metros. There are only 12 districts where the total savings and term deposits exceeds Rs 100,000 crore. And they are spread across a wide range: from Gurgaon (Rs 103,772 crore) to New Delhi (Rs 1,009,694 crore).
In the map below, these are the yellow dots. Click on the legend to isolate them and mouseover on the dots to see which ones they are and their bank deposits. Other than the five main metros or their offshoots, there’s Hyderabad, Pune, Ahmedabad and Lucknow.
Mumbai and New Delhi stand out by a long way. The deposits in New Delhi, for example, are 9 times that of Lucknow and 4 times that of Chennai.
2. The 3 clusters: The map plots 169 districts that have deposits of above Rs 10,000 crore, divided into four bands. From the point of view of focusing marketing resources, there are 3 clusters that can be seen:
i) The capital cluster: Around Delhi, extending into Punjab, Haryana, Western Uttar Pradesh and Uttarakhand. This houses districts like Jalandhar (rank 26, Rs 55,779 crore of deposits) and Dehradun (rank 28).
ii) The Pune-Ahmedabad cluster: This belt runs from Pune to Ahmedabad, and passes through Mumbai—the biggest of them all—and touches several districts in Gujarat. This includes Vadodara (rank 17), Surat (rank 30) and Rajkot (rank 45).
iii) The Kerala belt: It runs along the length of Kerala, and branches off into Tamil Nadu at two points. This belt has 6 districts in the top 50, led by Ernakulam (rank 16), Thiruvananthapuram (rank 23) and Coimbatore (rank 29).
Then, there are smaller pockets, in terms of number of districts: for example, around Kolkata and Chennai. The question before mutual fund CMOs is this: are they maximizing the potential of these districts.
This data is also available as a time-series for the last 5 years for all districts, which can be used to identify stories of growth. If you are interested in an analysis of this data that is tailored to your needs, please contact us.