STUDY ON CHANGING PATTERNS OF INVESTMENT CHOICES IN INDIA SINCE THE DAYS OF DEMONETISATION

STUDY ON CHANGING PATTERNS OF INVESTMENT CHOICES IN
INDIA SINCE THE DAYS OF DEMONETISATION
Project Report (MMPP001)

SUBMITTED BY
VINSTEN LEE EDISON
ROLL NO – 2352065070

UNDER THE SUPERVISION OF
Dr. R. VIJAYAGOPALAN NAIR

In partial fulfillment of the requirements for qualifying
MASTER OF BUSINESS ADMINISTRATION
(FINANCIAL MANAGEMENT)

Indira Gandhi National Open University
Maidan Garhi, New Delhi – 110068

2023 – 2025

CERTIFICATE OF ORGINALITY

I, Vinsten Lee Edison do, hereby, declare that the Project Report titled
“STUDY ON CHANGING PATTERNS OF INVESTMENT CHOICES IN
INDIA SINCE THE DAYS OF DEMONETISATION” is an original work of
mine and is submitted in partial fulfillment for the award of the Master’s degree
in Business Administration of Indira Gandhi National Open University.
This Report has not been submitted earlier either to this University or to
any other University / Institute for the fulfillment of the requirements of any
course of study.
To the best of my knowledge, the report does not infringe upon anyone’s
copyright, nor violate any proprietary rights and that any ideas, techniques,
quotations, or any other material from the work of other people included in my
project report, published or otherwise, are fully acknowledged in accordance
with the standard referencing practices.

Student Supervisor
Signature:
Name: Vinsten Lee Edison Dr. R. Vijayagopalan Nair
Date: 02-05-2025 Date: 02-05-2025
Place: Varkala Place: Thiruvanathapuram

ACKNOWLEDGEMENT

I am greatly thankful to my project Guide Dr. R. Vijayagopalan Nair for his
guidance and advice during my project.
I express my special thanks to all faculty members for having given me this
opportunity for acquiring more practical awareness of the situations and
realities, than from the theoretical learning imparted so far.
I take the opportunity to express my gratitude to all the concerned people
who have directly or indirectly contributed towards completion of this project,
especially, the experts in the field of finance and investment who have provided
valuable information at the stage of primary data collection.
I take the opportunity to thank all my friends, relatives and who have helped
shaping editing and printing this report.
I also express my gratitude to my parents who give a constant support and
love throughout my life and career.
Vinsten Lee Edison

TABLE OF CONTENTS

Chapter Name Sub No. Number
1 INTRODUCTION 1 - 20
1.1 Definitions 1-2
1.2 Investment Avenues in India 2-12
1.3 Literature Review 13-19
1.4 Rationale of the Study 20
2 METHODOLOGY OF THE STUDY 21 – 25
2.1 Statement of the Problem 21
2.2 Scope of the Study 22
2.3 Objectives of the Study 23
2.4 Hypotheses to be Tested 23-24
2.5 Nature of Study and Source of Data 24
2.6 Tools for Analysis 25
3 DATA ANALYSES AND DISCUSSIONS 26-65
3.1 Analysis Based on Past Studies and Reports 26-51
3.2 Analysis Based on Primary Data 52-65
4 FINDINGS AND CONCLUSIONS 66-78
4.1 Findings Based on Analysis of Secondary Data 66-76
4.2 Major Findings Based on Primary Data 77-78

4.3 Conclusions 78
5 RECOMMENDATIONS 79
6 LIMITATIONS OF THE STUDY 80
7 BIBLIOGRAPHY
8 ANNEXURES

LIST OF TABLES

No. Name of Table Page Nos.
1 Responses on Preferred Investment Avenues 26
2 Inflows into Mutual Funds post-demonetization 28
3 Monthly Inflows through SIPs 29
4 Trend of Change in BSE Sensex 30
5 New Demat Account Openings 30
6 Inflows in Equity Oriented Mutual Funds 31
7 Growth in Mutual Fund AUM 32
8 Mutual Fund Net Flows 33
9 Total SIP Contributions by Financial Year 51
10 Vigilance on Economic Shifts & Investments 52
11 Respondents' Roles in Financial Market 54
12 Earnings Shift to Organized Markets 55
13 Investment Rankings Pre-Demonetization 57
14 Investment Rankings Post-Demonetization 58
15 Investment Rankings Covid and After Days 59
16 Mutual Fund Investment Flow Trends 63
17 Demonetization's Effect on Money Laundering 64
18 Kerala Co-Bank Scams Shift Investments 65

LIST OF FIGURES

No. Name of Chart / Graph Page Nos.
1 Investment Trends in Ernakulam 37
2 Demat Account Growth in India 39
3 Client Participation in Capital Markets (%) 40
4 Equity Share in Indian Household Portfolios 41
5 Assets Under Management of Mutal Funds 42
6 Share of Net Financial Savings 43
7 SIP Flows during market Volatility 44
8 Growth of Demat Accounts 49
9 Vigilance on Economic Shifts & Investments 52
10 Role of Respondents in Financial Market 54
11 Average Investment Percentage Over Time 55
12 Trend of Investment Flow to Mutual Funds 63
13 Demonetization Impact on Money Laundering 64
14 Co-Banks Scams and Mutual Fund Adoption 65

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CHAPTER – 1
INTRODUCTION
1.1 DEFINITIONS
Demonetization
Demonetization is the process of taking away the legal status of a
currency of any denomination under any series of issue or as a whole. This
happens when a government officially declares certain currency notes or coins
invalid as a medium of exchange. The move is typically implemented to combat
issues like black money, counterfeit currency, corruption, and tax evasion. In
India the Government has demonetized the ₹500 and ₹1,000currency notes on
November 8, 2016, with the aim of curbing black money, promoting digital
transactions, and encouraging a shift towards a cashless economy.
Demonetization can have wide-ranging economic and social impacts.

Investment
Investment means putting money or other resources into assets or
ventures with the hope of earning income, profit, or an increase in value over
time. It involves giving up current spending to gain future returns, such as
interest, dividends, or capital gains. Common types of investments include
stocks, bonds, real estate, mutual funds, and other financial instruments. The
main aim is to grow wealth or meet financial goals, while managing risks based
on a person’s or organization’s risk tolerance, goals, and market conditions. The
idea of investment dates to ancient times, when people traded goods, farmed,
and managed resources. Over time, as money, trade, and banking systems
developed, investment methods became more organized, especially during
industrial growth and global trade. Today, investment plays a key role in

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growing the economy, creating wealth, and supporting personal financial plans,
with both individuals and institutions taking part worldwide.

Investment Choices (Avenues)
The term covers various forms of investments such as real estate, houses,
flats, gold, other metals, and even high-risk equity investments. For this study,
investment avenues do not include investments in one’s own business or joint
ventures like partnerships, but do include investments in public sector corporate
securities.

1.2 INVESTMENT AVENUES IN INDIA
Investment choices refer to the various financial options available
to individuals or organizations for allocating their resources with the goal of
generating returns or achieving specific financial objectives. These choices can
range from traditional instruments like fixed deposits, real estate, and gold to
modern options such as mutual funds, stocks, bonds, and emerging assets like
crypto currencies. The selection of investment avenues is influenced by factors
such as risk tolerance, financial goals, time horizon, liquidity needs, and
economic conditions. Investment choices play a critical role in wealth
accumulation, risk management, and long-term financial planning, and they
evolve in response to changes in market dynamics, technology, and individual
financial literacy. Investment avenues are the various options available for
individuals to allocate their savings with the aim of generating returns. The
various avenues have evolved over time due to factors such as income growth,
financial literacy, technological advancements, and economic reforms.

3

The various available investment avenues are as follows:
Safe and low risk investment avenues:
◼ Saving Account in Scheduled banks
◼ Scheduled Bank fixed deposits
◼ Public provident fund
◼ National saving certificate and Post office saving
◼ Government securities
Moderate risk investment avenues:
◼ Mutual funds
◼ Life insurance
◼ Debentures
◼ Bonds
High risk investment avenues:
◼ Equity share market
◼ Commodity share market FOREX market
Traditional investment avenues:
◼ Real estate (Property)
◼ Gold/silver
◼ Chit funds and Private Financiers
Emerging investment avenues:
◼ Hedge funds
◼ Private equity investments

4

Safe and Low Risk Investment Avenues
Safe and low-risk investment avenues typically include options that
provide stability, capital preservation, and offer predictable returns, with
minimal exposure to market volatility.
a) Savings Account
A savings account is a low-risk investment avenue offered by
banks and financial institutions that provides a safe place to deposit
funds while earning interest. It allows individuals to maintain
liquidity, meaning they can access their money easily, typically
without penalties. The interest rates on savings accounts are
generally modest compared to other investment options.

Due to their low-risk nature, savings accounts are ideal for short-
term savings goals or emergency funds. Saving Accounts offer a
stable and predictable return on investment, making them suitable
for conservative investors who prioritize capital preservation and
immediate access to funds over higher returns.

b) Bank fixed deposits
Bank fixed deposits (FDs) are a popular investment avenue for
individuals seeking safety, liquidity, and assured returns. In a fixed
deposit, a sum of money is deposited with a bank for a
predetermined tenure, ranging from a few months to several years,
during which it earns interest at a fixed rate. The interest rates on
FDs vary based on the tenure and the policies of the bank, and once
locked in, the rate remains constant for the duration of the deposit.
FDs are known for their low risk because they are generally backed

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by the bank's financial strength and making them a preferred
choice for risk-averse investors.

Bank fixed deposits offer flexibility in tenure and the choice
between cumulative and non-cumulative interest options. In
cumulative FDs, interest is compounded and paid at the end of the
tenure, whereas non-cumulative FDs provide regular interest
payments. Investors can also secure loans against their FDs, adding
liquidity. While FD returns are typically lower than market-linked
investments, they provide predictability and guaranteed returns,
making them suitable for conservative investors focused on capital
protection.

c) Public provident fund
The Public Provident Fund (PPF) is a popular long-term savings
and investment avenue in India, primarily because of its tax
benefits and assured returns. Established by the Government of
India, PPF offers a safe investment option with an attractive
interest rate, which is revised quarterly. The account has tenure of
15 years, with the possibility of extension in blocks of 5 years.

One of the key advantages of PPF is that the interest earned and the
amount invested qualifies for tax exemption under Section 80C of
the Income Tax Act, making it a preferred option for tax-conscious
investors. Additionally, the returns on PPF are tax-free, further
enhancing its appeal. It is a reliable vehicle for building a
retirement corpus or funding long-term financial goals. Its
government backing ensures capital safety, making PPF a secure
investment choice.

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d) National saving certificate
The National Savings Certificate (NSC) is a fixed-income
investment scheme offered by the Indian government through post
offices. It is designed to encourage savings among individuals and
provides a guaranteed return. Investors can choose from different
maturity periods, typically 5 or 10 years, with interest compounded
annually. The interest earned on NSCs is taxable, but the principal
amount invested qualifies for tax deductions under Section 80C of
the Income Tax Act. NSCs are considered a safe investment due to
their government backing, making them a popular choice for
conservative investors looking for a secure and predictable
investment option.

e) Government securities
Government securities are debt instruments issued by central
governments to raise funds for various public expenditures. They
are considered one of the safest investment avenues due to the
backing of the government's creditworthiness, which minimizes
default risk. These securities include Treasury bills, government
bonds, and savings bonds, each with varying maturities and interest
rates. Treasury bills are short-term instruments with maturities up
to one year, while government bonds can have longer maturities,
ranging from several years to decades.

Investors are attracted to government government securities for
their stability, fixed interest income, and guaranteed return at
maturity. They are also easy to buy and sell in the market, making
them a good choice for conservative investors seeking safe and
steady returns.

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Moderate Risk Investment Avenues:
a) Mutual funds
Mutual funds are investment avenues that pool money from multiple
investors to invest in a diversified portfolio of assets, such as stocks,
bonds, or other securities. Managed by professional fund managers,
mutual funds offer investors the benefit of diversification, which can
reduce risk compared to investing in individual securities. Investors can
choose from a variety of mutual funds based on their risk tolerance,
investment goals, and time horizon, such as equity funds, bond funds, or
balanced funds. The professional management and diversification make
mutual funds a convenient option for individuals seeking to invest
without having to manage their own portfolio actively.

One key advantage of mutual funds is liquidity, as investors can typically
buy or sell shares on any business day at the fund's net asset value (NAV).
Additionally, Mutual funds have lower investment thresholds than other
options. However, they may include management fees and other costs
that can affect returns. It's important to understand the fund's strategy,
fees, and performance to choose one that aligns with your financial goals.

b) Life insurance
Life insurance, traditionally viewed as a risk management tool, can also
serve as an investment avenue through products like whole life or
universal life insurance. These policies combine life coverage with an
investment component, where a portion of the premiums is allocated to a
cash value account. Over time, this cash value grows tax-deferred and can
be accessed via loans or withdrawals.

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Although life insurance gives guaranteed returns and a death benefit, the
investment growth is usually slower than stocks or mutual funds. It is a
good choice for those who want both life protection and a safe, tax-
friendly investment.

c) Debentures
Debentures are long-term debt instruments issued by corporations or
governments to raise capital. Unlike bonds, debentures are not backed by
any specific asset but rely on the trustworthiness of the issuer. They pay a
fixed interest rate, called a coupon rate, usually once or twice a year.
Investors get regular interest and their full amount back at maturity.
While safer than shares, debentures are riskier than secured bonds.

Debentures can be categorized into convertible and non-convertible
types. Convertible debentures can be converted into equity shares of the
issuing company, offering potential for capital appreciation. Non-
convertible debentures cannot be converted but offer higher interest to
make up for it. Investors often choose debentures for their predictable
income and lower risk profile compared to more volatile investments.

d) Bonds
Bonds are a common type of investment avenue where investors lend
money to an issuer, typically a government or corporation, in exchange
for periodic interest payments and the return of the principal at maturity.
These fixed-income securities offer a predictable income stream, as they
generally provide fixed interest payments. Bonds come in various forms,
including government bonds, corporate bonds, and municipal bonds, each
with different risk profiles and yields. Government bonds, such as
Treasury bonds, are considered the safest due to the backing by

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government credit, while corporate bonds carry higher risk but offer
potentially higher returns.

Investing in bonds offers stability and consistent income, with less
volatility than equities and diversification benefits. However, they carry
risks like interest rate and credit risk that can impact their value. Knowing
these risks is important for smart bond investing.

High Risk Investment Avenues
a) Equity Share Market
Equity Share Markets offer investors the opportunity to purchase
ownership stakes in publicly traded companies through the acquisition of
shares. These shares represent a claim on a company's assets and
earnings, with the potential for capital appreciation as the company's
value grows. Equity investments are characterized by their potential for
high returns, driven by factors such as company performance, market
conditions, and overall economic health. Investors can benefit from both
price appreciation and dividends, which are periodic payments made from
the company's profits. However, this avenue also comes with significant
risk, as share prices can be highly volatile and influenced by various
market forces.

Investing in equity markets requires a thorough understanding of market
dynamics, individual company performance, and broader economic
indicators. It is suited for investors with a higher risk tolerance who seek
growth opportunities over the long term. Despite the potential for
substantial gains, equity investments can also lead to losses, making it

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crucial for investors to perform due diligence and consider diversification
to manage risk effectively.

b) Commodity Share Market & FOREX Market
The commodity market involves trading physical goods like gold and oil
etc. Investing in commodities helps to diversify a portfolio and can
protect against inflation. Commodity-related shares reflect the sector’s
performance and are influenced by supply-demand, global events, and the
economy. They can offer high returns when prices rise but carry risks due
to price swings and economic slowdowns.

The FOREX (foreign exchange) market is the largest and most liquid
financial market in the world, where currencies are traded. It offers
chances for good returns by trading currency pairs based on exchange
rate changes. However, it involves high risk and leverage, and traders
need to understand economic trends, interest rates, and global events.

Traditional Investment Avenues
a) Real Estate (Property)
Real estate, or property investment, involves purchasing residential,
commercial, or industrial properties with the aim of generating rental
income or capital appreciation. It offers a tangible asset with the potential
for steady cash flow through rents and long-term value growth. Investors
may benefit from tax advantages, property appreciation, and
diversification of their investment portfolio.

However, real estate investments also come with risks and challenges,
including market fluctuations, high entry costs, and property management

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responsibilities. Liquidity can be an issue as selling property may take
time.

b) Gold/Silver
Gold and silver are traditional investment avenues known for their
stability and ability to protect against inflation and economic troubles.
These precious metals are seen as safe assets that often keep their value
during market ups and downs. Gold has long been valued as a store of
wealth and a widely accepted form of exchange, making it a good option
for diversifying a portfolio. Silver is also valuable but tends to be more
volatile and is usually invested in smaller amounts.

Investing in gold and silver can be done through physical assets like coins
and bullion, or financial instruments like exchange-traded funds (ETFs).
While they provide a hedge against inflation and currency risk, they do
not generate income like dividends or interest, making them more
suitable for long-term investment strategies.

c) Chit Funds and Private Investors
Chit funds are a traditional savings and investment scheme in Kerala,
where a group of individuals contribute a fixed amount into a common
fund. Members can withdraw the accumulated amount at different
intervals, often through a bidding or lottery system. This allows access to
lump-sum funds for short-term needs.

While chit funds can provide attractive returns and emergency funding,
they also carry risks due to the lack of regulatory oversight and potential
mismanagement. It is important for investors to ensure the chit fund is
registered and to review its terms carefully before participating.

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Emerging investment avenues:
a) Hedge Funds
Hedge funds are pooled investment vehicles that employ diverse
strategies to generate returns, often using sophisticated techniques such as
leverage, short selling, and derivatives. Unlike traditional investments,
hedge funds aim to achieve positive returns regardless of market
conditions, targeting absolute returns rather than relative performance.
They typically cater to high-net-worth individuals and institutional
investors due to their high minimum investment requirements and less
regulated nature.

b) Private equity investments
Private equity investments involve investing directly in private
companies. This avenue offers investors the opportunity to participate in
the growth and transformation of businesses that are not publicly traded.
Private equity can provide substantial returns if the companies perform
well, as investors often become involved in strategic decision-making and
operational improvements.

However, private equity is riskier than traditional investments. The
money is usually locked in for a long time, and returns depend on how
well the company performs. It is best suited for investors with higher risk
tolerance and a long-term outlook.

The study in this research is on the Changing patterns of Investment
Scenarios in India in the current years, especially in Kerala.

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1.3 LITERATURE REVIEW
The following past studies were thoroughly reviewed to set a strong
foundation for the present study.
Mane S & Bhandari R (2014)
1
has done a study on Investors awareness and
choice of investment avenues in Pune city. The study found that a significant
portion of investors had limited awareness of various investment options,
particularly newer financial products like mutual funds and stocks.
Traditional avenues, such as bank deposits and gold, were favored for their
perceived safety and stability. The study found that factors like age, education,
and income significantly influenced awareness and investment choices, with
younger, more educated individuals more likely to explore diverse options. The
study concluded that enhancing financial literacy among investors is crucial for
better investment decisions and overall financial well-being.
Murlidhar A. Lokhande (2015)
2
conducted a study on Investment awareness
and patterns of savings and investments among rural investors. The study found
that rural investors preferred traditional low-risk investment options such as
bank deposits, gold, and real estate. The research highlighted that many rural
investors lacked awareness about modern investment avenues like securities,
derivatives, commodities markets, and mutual funds. It emphasized the
importance of encouraging savings and investments for capital formation and
concluded that enhancing financial literacy is essential to increase rural
investors' awareness and participation in diverse investment opportunities,
ultimately contributing to economic development.
Velmurugan G, Selvam V, & Nazar N A (2015)
3
conducted an Empirical
study on the perception of investors toward various investment avenues. The
study revealed that investment preferences remain consistent across genders,
except for gold and post office savings, where differences were observed. While

14

both genders exhibited similar decision-making patterns regarding gold
investments, variations were noted in preferences for real estate, insurance,
stock market, bank savings, and post office schemes across different age groups.
The research found that older and higher-income investors preferred safer
investment options, such as bank deposits and post office savings, due to their
perceived security. However, there is a growing awareness among investors
about mutual funds and stocks, with increasing popularity as risk levels and
income levels rise.
Aghila Sasidharan (2015)
4
undertook a study on Gold as an investment option
and the investment patterns of investors in Kerala. The study found that,
compared to other metals, investors exhibited a strong preference for gold as an
investment. The willingness to invest in gold was significantly influenced by its
market price, with investors adjusting their investment decisions based on price
fluctuations. The research highlighted that gold remains a favored investment
avenue due to its perceived stability and value retention over time.
Siby Abraham (2016)
5
in his study on the Demand for gold in a changing
investment scenario in the Ernakulam district. The study highlighted that in
Kerala, purchasing gold ornaments has been a cultural tradition for generations,
apart from being a preferred gift during marriages and festivals. The presence of
high foreign remittances in the state has enabled households to maintain higher
savings, which in turn encourages investment in gold.
The research reaffirmed that gold remains a key investment asset for risk-averse
investors in Kerala. Many households prefer low-risk assets, including gold,
bank deposits, and real estate. The study noted that gold is a vital savings tool
for lower- and middle-income groups, while higher-income individuals are
diversifying into virtual gold. Factors driving the preference for gold include its
liquidity, safety, price stability, and potential returns that outpace inflation.

15

Greeshma V (2016)
6
has done a study on Mutual fund investors behavior in
Kerala. The study found that mutual fund investments are a preferred
investment avenue among investors', particularly those with a long-term
perspective. It highlighted that investors' objectives and their preference for
mutual fund products vary based on their investment time horizon. The research
further revealed that return and investment safety are the primary factors
influencing investors' decisions.
T. Radhakrishnan (2017)
7
conducted a study on Investors’ perception of
factors influencing the choice of investment in mutual funds and gold in Kerala.
The study found that while mutual funds offer a good source of returns for
households, especially for retirees and those who are willing to take some risk, a
significant portion of investors still prefer traditional options like gold and fixed
deposits. However, the study also observed a growing interest in mutual funds
among younger investors. The research highlights the need for increased
financial awareness to encourage diversification in investment choices.
Banerjee & Sinha (2017)
8
conducted a study on the Impact of demonetization
on the Indian economy. The study found that demonetization played a
significant role in bringing unaccounted cash into the formal banking system,
leading to increased deposits in banks. However, despite this influx, the
measure did not fully eradicate black money, as a significant portion was held in
assets such as gold, real estate, and offshore accounts.
The Quint (2017)
9
, A National Media report on A Change in Investment
Patterns in Households Post Demonetization, highlighted a significant structural
shift in Indian household savings patterns. Traditionally, Indian households
have been risk-averse, preferring to invest in unproductive assets like gold.
However, since demonetization in November 2016, this trend has started
changing.

16

The report emphasized that mutual funds have played a major role in driving
this shift towards financial assets. The increasing preference for financial
instruments has yielded positive outcomes for the Indian economy. Firstly,
higher domestic investments have made Indian equity markets less dependent
on foreign fund inflows, thereby reducing their vulnerability. Secondly, the
growing adoption of Systematic Investment Plans (SIPs) has contributed to the
stability of domestic investment patterns.
The Economic Times (2017)
10
discussed changes in Indian investments after
demonetisation in the article "How Has Retail Money Moved Post
Demonetisation?" The report showed that stock markets experienced a
significant increase in activity, with more people investing as money from
banks flowed into stocks.
The report also pointed out that New demat accounts surged, indicating growing
interest in equities. Mutual funds also gained popularity, leading to a rise in
total assets. The life insurance sector saw increased premium collections after
demonetization. In contrast, the real estate sector slowed down as buyers and
developers hesitated to invest due to cash flow concerns.
Reserve Bank of India (2017)
11
report on Household Savings and Investment
Behavior in India, examined the macroeconomic impact of demonetisation,
particularly on financial intermediaries and banking institutions. The report
highlighted that demonetisation led to a significant shift in the composition of
the banking sector’s balance sheet. A decline in currency circulation resulted in
a surge in bank deposits, leading to an expansion in the overall banking system.
Furthermore, the report pointed out that various financial institutions were
affected differently. While scheduled commercial banks witnessed considerable
growth in their balance sheets, other financial intermediaries, such as mutual
funds and insurance companies, also benefited from the liquidity influx. Mutual

17

funds experienced increased investor participation, and the insurance sector
observed a rise in premium collections. The overall financial system became
more active, reflecting a transformation in household savings and investment
preferences post-demonetisation.
Hindustan Times (2017)
12
news report titled: Demonetisation Changed Saving
Habits of Indians, Says Finance Ministry highlighted a significant shift in the
saving patterns of Indian households after demonetisation. The government
observed that individuals increasingly moved their savings into bank deposits
and financial instruments, moving away from unproductive physical assets.
The report emphasized that more funds were directed toward organized
financial markets. The finance ministry noted that this transition contributed to
the formalization of the asset market, encouraging people to explore options like
shares, debentures, insurance funds, and pension funds. This shift marked a
broader trend of financial inclusion and increased participation in market-based
investments.
Manisha Kaushal Arora (2018)
13
conducted a study on the Comparative
Analysis of Financial Investment Patterns Before and After Demonetisation in
the Delhi region. The study found that demonetisation had a significant impact
on the economy, particularly on investors' financial investment choices. The
research highlighted shifts in preferences for equity, bank deposits, mutual
funds, real estate, and life insurance. Notably, real estate experienced a
continuous decline post-demonetization.
Manikandan (2019)
14
has done a study on the Perception of Investors Towards
Investment Patterns Across Different Investment Avenues. The study found that
older, higher-income investors prefer safer options like bank deposits and post
office savings for perceived security. However, as risk appetites and income
levels grow, investment in mutual funds and shares has gained popularity.

18

The research also observed that age, education, and income levels significantly
influence investors' awareness and choices in investments.
Athira K (2020)
15
conducted a study on the Impact of demographic and
personality traits of investors on their risk-bearing capacity, with a special focus
on investors in Kerala. The study found that most respondents preferred secure
investment options, with bank deposits emerging as the most common
investment avenue. Other prominent investment choices included insurance,
provident funds, mutual funds, and precious metals like gold and silver.
Investments in real estate were relatively less popular among the respondents.
The research also analyzed the most preferred investment avenues and found
that bank deposits ranked highest, followed by insurance and gold. Mutual
funds were also considered a favorable option, but traditional and low-risk
investments remained dominant.
Bansal (2021)
16
conducted a study on the rising popularity of Systematic
Investment Plans (SIPs) in mutual funds post-COVID-19. The study found that
investor participation in SIPs increased significantly as individuals sought stable
and disciplined investment options amid market volatility. Mutual funds,
particularly equity-oriented SIPs, experienced a surge in inflows due to their
ability to mitigate market fluctuations and provide long-term returns. This study
underscores a structural shift in investment behavior, with a growing preference
for systematic and long-term financial planning in the post-pandemic era.
Liya Rajesh (2021)
17
has done a study on A Snapshot of the investment
patterns of people in Ernakulam district, Kerala, based on demographics at the
beginning of the pandemic. The study found that individuals exhibited a mixed
approach toward investments, with fixed deposits being the most preferred
option. However, a significant portion of investors also allocated funds to

19

mutual funds and equities, indicating a balance between risk-free and riskier
investments.
The research further revealed that investments in real estate, gold, and provident
funds were lower, while post office schemes, debentures, and government
securities had minimal participation. This suggests that investors in Ernakulam
district favored market-linked options over traditional low-risk instruments.
Shah & Patel (2022)
18
conducted a study on post-pandemic investment trends
and found a significant shift in investor preferences. Traditional assets such as
fixed deposits, gold, and real estate saw reduced interest as investors moved
towards financial instruments. Retail participation in the equity market
increased notably, driven by enhanced access to digital trading platforms.
The study also observed a rising preference for mutual funds, with more
investors opting for Systematic Investment Plans (SIPs) to ensure diversified
and professionally managed portfolios.
Sundar & Thomas (2023)
19
conducted a study on The post-pandemic shift in
real estate and capital markets in India. The research found that the real estate
sector experienced a continued recovery phase due to liquidity constraints,
higher interest rates, and evolving consumer preferences. Investors, particularly
retail participants, redirected their funds toward stock markets and mutual funds
in search of better returns.
The study also highlighted the influence of regulatory measures such as RERA
and SEBI’s capital market reforms on investment decisions. These regulations
played a role in shaping investor confidence and market dynamics. While the
real estate sector faced challenges, the capital markets benefited from increased
retail participation, reflecting a shift in investment patterns post-pandemic.

20

1.4 RATIONALE OF THE STUDY
As everyone knows, over the recent years especially since demonetization
scheme was introduced quite surprisingly, by the MODI Government in 2016-
17 (8
th
November, 2016), and due to the impact of the COVID epidemic, in
2019-20 there has occurred fundamental transitions in the investment sphere all
over India. In Kerala, reports of mismanagement of funds at co-operative banks,
involving key officials, have led to concerns among middle and lower-class
investors over the inability to redeem due fixed deposits. The above and other
certain broader issues as the stringent measures taken by MODI Government
against money laundering and black money operations; strengthening the scope
and equipment for digital operations and opening up of the banking operations
to the poor and rural masses through zero balance Account opening schemes
and MUDRA Loan Schemes and the policy change in favour of large scale
corporate Sector have contributed to the change in investment choices. Further
the introduction of the crypto currency and initiatives on the part of the Finance
Ministry to introduce controls over it and the growing IT literacy standards of
the people have also played momentous influence, on the change.
A close observation and careful scrutiny of the changes that have taken
place in recent years in the investment market, on the back ground of the
changes that had taken place during the pre-demonetization and post-
monetization days, would be of immense use for the planners, analysts and the
investors in their future decisions and policy-making. Several studies are going
on in the field. Here is a humble attempt to take stock of such findings and go
deeper into the issue as far as possible, based on reported secondary and
primary data of those who observe the changing scenario with scientific
approach.

21

CHAPTER- 2
METHODOLOGY

2.1 STATEMENT OF THE PROBLEM
The problem subjected to study and analysis is stated very clearly in the
rationale part. Here the researcher attempts to state nature and logic of the
analysis and to state the problem more specifically. The study proposes to
observe the changes that have taken place in the investment market as whole
and in real estate market which was thriving very heavily in most parts of India,
especially Kerala during the latter decades of the last century and as of now in
the current century. The study proposes to analyses the impact of
demonetization and the declarations of the Government on controlling black
money operations, the boost of real estate market and investments in Co-
operative banks, bonds, mutual funds and capital market. The study proposes to
analyse specially, the impact of co- operative sector bank scams on the
investment patterns of investors in Kerala. The study proposes to analyse the
trend of changes in the investment market during the Covid and After periods.
The study proposes to analyse the increasing popularity of mutual fund schemes
among our investors, as is brought to the notice of those who are interested in
the field of finance and investment, by the Governor of the Reserve bank of
India, on the eve of the release of the 2024-’25 budget by the Finance Minister.
The study proposes to look into the facts behind the concern raised by the SEBI
Chair Person on our youngster’s immature involvement on recent years.

22

2.2 SCOPE OF THE STUDY
Four walls defining the proposed scope of the study are stated below. The
study covers the period from the financial years 2014-15 to 2023-24. It is
divided into three parts named for the sake of convenience, as:
Pre demonetization days (2014-15 to 2016-17),
Demonetization has come into force, with effect from Nov. 8, 2016. But its
implementation and the responses and repercussions have come into actual
implementation over a period of 5 to 6 months starting there from. So the whole
of the financial year 2016-17 is taken as pre-demonetization period.
Post demonetization days (2017-18 to 2019-20),
Covid and After days (2020-21 to 2023-24);
even though the duration of time confining each period do not fall strictly
within the limits of the calendar days specified.
The study relies to a good extent on the findings of past studies and the
secondary data. It relies on primary data collected from experts in the field to
check the accuracy of the findings based on the secondary data.

23

2.3 OBJECTIVES OF THE STUDY
As is visible from the title of the study, the objective of the study is to
analyze changing patterns in the investment scenario in India and more
specifically, in Kerala over the last ten years from 2014-15 to 2023-24.
The specific objectives of the study are:
1. To study about the priority of investment avenues during the pre-
demonetisation days, post-monetisation days and the Covid and
After-days in India, based on the secondary data.
2. To check the accuracy of such findings based on primary data
collected from experts based on suitable statistical test of hypothesis.
3. To analyse how far is the impact of demonetisation on controlling
operations in black money and money laundering in India.
4. To analyse the impact of co-operative society scandals in Kerala
during the Covid and After- days on the investment preferences of
investors in Kerala and whether it has definitely been diverted to
Mutual Funds in the light of the limping real estate market.

2.4 HYPOTHESES TO BE TESTED
The study is based on the following null hypotheses.
1. There is no difference between the findings based on analysis of
secondary data and the results of the primary data as to the changes in the
rankings of investment choices over the periods of study.
2. There is no difference between the volume of money laundering
transactions prior to after the demonetisation.

24

3. The Co-bank scams have not caused any significant change in the flow
funds from Co-Operative Bank deposits to Mutual Funds or other
avenues.

2.5 NATURE OF STUDY AND SOURCE OF DATA
The study of descriptive nature.
The study uses both secondary and primary data.
For the purpose of primary data collection the population is all the investors,
other players in the securities markets, financial analysts / consultants and those
who are observing the changes in the financial markets and seriously.
Sample size proposed is 30 respondents.
Method of sampling proposed to be used is judgmental sampling.
Judgemental sampling method is chosen instead of either of the random
sampling methods for the following reason. The respondent should be a keenly
observing the changes in the investment and capital market, and the feelings and
temperaments and the external factors influencing the investment decisions.
That requires the respondents to have bit deep knowledge and awareness of
basic economic and political and financial factors and the trend of changes
taking place in the internal and external markets as a whole and thorough
knowledge and involvement with the changes taking place in the financial
markets. Hence the respondents are to be chosen carefully.
Some techniques enabling the random nature of selection are still proposed to
be applied however, the details of which will be explained in detail in the final
report.

25

2.6 TOOLS FOR ANALYSIS
The techniques proposed to be applied in the study are:
1. Analysis of secondary data through careful review of the past studies and
reported facts from reliable sources.
2. Preparation of tables and visual presentations based on primary data.
3. Test of hypothesis using suitable statistical tests, if ever found necessary.

26

CHAPTER – 3
ANALYSES and DISCUSSIONS

3.1 ANALYSIS BASED ON PAST STUDIES AND REPORTS

Pre demonetization and Post demonetization Days
The analysis begins with interpreting the investment behavior patterns
from the final years of the pre-monetization period, based on a study by Siby
Abraham (2016).

1. Analysis based on a table that represents investment behavior
patterns.
Table 1: Responses on Preferred Investment Avenues
Assets No. of investors No. of Prefernces Percentage
preference
Gold 230 92 20.91
Real Estate 160 64 14.55
Bonds 25 10 2,27
Stocks 95 38 8.64
Bank Deposits 215 86 19.55
PPF 40 16 3.64
Life Insurance 195 78 17.73
Mutual Funds 103 41 9.36
Chit funds & Others 37 7.6 3.35
Source: Siby Abraham (2016) -Demand for Gold in a Changing Investment
Scenario – A Study in Ernakulam District.

27

NB: Life Insurance is also taken as an investment option for the purpose of this
study, as stated in the definitions part with reasons, there far.
Where the respondents subjected to study were advised to tick against
their preferred investment avenues, the results generated are shown in table No.
1, along with the number of ticks representing preferences and its percentage for
each avenue.

INFERENCE
Siby Abraham’s study (2016) highlights the dominance of gold as the
most preferred asset, with 92 ticks favoring, constituting 20.91% of the total
scores. This reinforces Kerala’s reputation as a major consumer of gold. The
study also indicates that real estate is another favored investment avenue, along
with bank deposits and life insurance, which provide financial security and
stability. While traditional low-risk investments remain popular, a notable
portion of investors also allocate funds to riskier assets such as stocks and
mutual funds, reflecting a diversified approach to wealth management. The 41
preferences for mutual funds is indicator of a change of trend favoring market
linked investments.

The findings emphasize that investors in Kerala are generally risk-averse,
with a significant portion of their savings being directed toward secure assets
like gold, real estate, and bank deposits. Among gold investors, physical gold
remains the most preferred form over alternative options such as gold bars,
coins, exchange-traded funds (ETFs), driven largely by sentimental and cultural
factors. The study also observes that gold continues to be a crucial savings
instrument, especially for lower- and middle-income households, reaffirming its
role as a traditional yet enduring investment choice in the region.

28

2. Revelations Based on The Quint Report (2017)
ANALYSIS
The analysis is based on a national media report highlighting changes
in household investment patterns after demonetization. The demonetization of
high-value currency notes in November 2016 triggered notable shifts in how
Indian households invest. Traditionally, they preferred safe, tangible assets like
gold and real estate over financial instruments. This cautious approach led to a
smaller share of financial assets in household savings. However, in the post-
demonetization period, a gradual shift towards financial assets emerged,
indicating a broader change in investment behavior.
A notable trend during this period was the move towards financial
investments. Between October 2016 and January 2017, domestic institutional
investors contributed ₹39,823 crores to the capital market, showing increased
confidence in financial markets. Mutual funds have been a key driver of this
transformation.
Table 2: In-flows into Mutual Funds post-demonetization
Year 2015 2016 Growth Percentage
Mutual Fund Inflows 1.33 trillion 3.43 trillion 155%
Source: AMFI

INFERENCE
The mutual fund industry witnessed a significant surge in inflows post-
demonetization, with investments rising from ₹1.33 trillion in 2015-16 to ₹3.43
trillion in 2016-17. This marks a substantial 155% growth, indicating a shift in
investor preference toward regulated financial instruments. The trend reflects
growing awareness, transparency, and trust in mutual funds as an effective

29

investment avenue. While traditional assets like gold and real estate remain
relevant, financial assets have gained remarkable traction among Indian
investors.

3. The Growing Popularity of Systematic Investment Plans (SIPs)
The rapid growth in mutual fund investments is primarily attributed to the
rising popularity of Systematic Investment Plans (SIPs).
ANALYSIS
Table 3: Monthly Inflows through Systematic Investment Plans (SIPs)
April 2012 April 2017 Growth Percentage
₹980 crores ₹4,269 crores 335%
Source: AMFI

INFERENCE
The data shows a remarkable 335% growth in monthly SIP inflows, rising
from ₹980 crores in April 2012 to ₹4,269 crores in April 2017. This surge
highlights the increasing trust of retail investors in mutual fund investments
through disciplined, long-term strategies. The widespread adoption of SIPs has
played a crucial role in boosting the mutual fund industry’s asset base. It reflects
a shift in investor behavior from lump-sum investments to structured monthly
contributions.

4. Flow of Funds Post Demonetization
The Economic Times (2017) report analyzes how Indian household
investment behavior changed after the demonetization policy in November

30

2016. The report showed that the impact of demonetization on the savings and
investment patterns of Indian households has been significant.
ANALYSIS
Table 4: Trend of Change in BSE Sensex
Nov. 7, 2016 Nov. 6, 2017 Times Growth
27,458.99 33,731.19 1.23 times
Source: BSE Report
Traditionally, Indian households have invested most of their wealth in
physical assets like gold and real estate, with estimates showing 78–95% of
savings going into these areas. However, demonetization changed this pattern
by reducing the attractiveness of gold and real estate investments. As a result,
financial assets like equities, mutual funds, and insurance have become more
popular, and the stock market saw a significant increase in activity after
demonetization.
INFERENCE
A significant portion of this growth is attributed to the liquidity injected
into banks due to demonetization, which subsequently found its way into the
stock market.

5. Demonetization and the Increase in Demat Accounts
Another notable trend was the increase in demat account openings.
Table 5: New Demat Account Openings
2015-16 2016-17 Rate of increase
14.3 lakh 14.8 lakh 103.50 for 100
Source: NSDL Report

31

INFERENCE
The increase in the number of demat accounts opened is the most visible
indicator of the shift of savings to organized market securities during the initial
years of the post-demonetization period.
The number of new demat accounts in the National Securities Depository
Limited (NSDL) increased from 14.3 lakh in 2015-16 to 14.8 lakh in 2016-17.
Additionally, in March 2017 alone, over 2 lakhs new demat accounts were
opened, marking the highest number recorded in the previous seven years. By
October 31, 2017, NSDL had more than 16.4 million active demat accounts,
indicating a growing interest in financial securities.

6. Impact of demonetization on Investment Patterns –An overview
ANALYSIS
Table 6: Increase in Inflows to Equity-oriented Mutual Fund Schemes
Between April-Aug 2016 Between April-Aug 2017 Growth Percentage
Rs 18,500 crore Rs 61,400 crore 232
Source: AMFI

INFERENCE
The data in Table No. 6 indicates significant growth in the mutual fund
sector, particularly in equity-oriented schemes, since the days of
demonetization.
The insurance sector benefited from demonetization, with life insurance
companies seeing a significant rise in premium collections in November 2016.
This reflected a shift in household financial behavior towards risk protection
and long-term investments.

32

Conversely, the real estate sector experienced a slowdown. Before
demonetization, cash transactions were common in the market. After the policy
was announced, liquidity issues and stricter regulations reduced activity.
Developers delayed new projects, and buyers became cautious, resulting in
temporary stagnation in the sector.
Overall, demonetization led to a shift in household savings from physical
assets to financial instruments, reflecting a broader transformation in investment
patterns. The rise in stock market participation, mutual fund investments, and
insurance adoption underscores the increasing formalization of financial savings
in India.

7. Mutual Fund AUM Growth Post-Demonetization: Surpassing 20 trillion
in 2017
ANALYSIS
Table 7: Growth in Mutual Fund AUM Post-Demonetization
AUM as on 31/3/2017 AUM as on 31/8/2017 Growth Percentage
Rs. 1,75,000 crores Rs.2,06,000 crores 17.71
Source: The Economic Times Report (2017)

INFERENCE
Demonetization in 2016 significantly transformed the mutual fund
industry, resulting in increased participation from retail investors. Following
demonetization, the assets under management (AUM) in the mutual fund sector
experienced remarkable growth of 17.71%, surpassing the Rs 20 trillion mark in
2017. This rapid expansion underscores the shift in investor preferences toward
financial assets.

33

8. Emerging Trend: Fund Flow from Conventional Avenues to Organized
Markets Post-Demonetization
ANALYSIS
Overall, the strong inflow into mutual funds after demonetization
highlights a broader shift towards financialization in India. With reduced cash
usage and better banking access, investors began turning to market-based
instruments, making mutual funds a favored investment choice.
Between November 2016 and October 2017, equity mutual funds
attracted inflows of Rs 1.35 lakh crore, while balanced funds received Rs
74,000 crore. This marked a significant increase compared to pre-
demonetization levels, as more investors directed their savings into market-
linked instruments. The shift towards equities was further evident in the asset
allocation pattern, with equity holdings rising from 59.6% in October 2016 to
64.3% in September 2017.
The table below shows the net inflows and outflows in mutual funds in
Rs. Billion between 2015-16 and 2016-17.
Table 8: Mutual Fund Net Flows
Category 2015-16 2016-17 y-oy growth %
Income/DebtSchemes 880.20 2673.10 303.69
Equity Schemes 556.90 728.70 130.84
Balanced Schemes 187.20 261.00 139.57
Exchanged Traded Fund 50.10 188.80 376.84
Total 1674.40 3851.60 230.02
Source: Securities and Exchange Board of India (SEBI)

34

INFERENCE
The data highlights a significant surge in mutual fund net flows across all
categories between 2015–16 and 2016–17. Income or debt schemes recorded a
growth of over 303%, indicating a strong preference for safer yet structured
investment options. Similarly, equity schemes and balanced schemes saw
substantial growth rates of 130.84% and 139.57% respectively, reflecting rising
investor confidence in diversified and equity-oriented investments. Most
notably, Exchange Traded Funds (ETFs) registered an explosive 376.84%
growth, signaling a shift toward passive, low-cost investment vehicles in line
with global trends.
This remarkable increase in mutual fund investments suggests a broader
transition of house-hold savings from traditional routes like gold, real estate, or
chit funds towards the formal financial ecosystem. The trend shows a clear shift
of funds from traditional options, such as bank deposits, to organized market
segments, particularly mutual funds. This movement has the potential to reshape
liquidity flows in the economy and could pose challenges for the banking
sector, which see a decrease in low-cost deposit mobilization. However, it
boosts capital markets and the investment management industry.

9. Post-Demonetization Investment Trends and their Impact on the
Banking System – RBI Report (2017)
ANALYSIS
The Reserve Bank of India’s (2017) report on “Household Savings and
Investment Behavior in India” highlighted demonetization’s broad impact on
the financial sector, especially on the balance sheets of scheduled commercial
banks (SCBs). The removal of high-denomination notes led to a sharp drop in
currency circulation—about ₹8,800 billion between October 28, 2016, and

35

January 6, 2017. This decline was mainly offset by a surge in bank deposits,
which increased by nearly ₹6,720 billion, despite concurrent outflows in non-
resident Indian (NRI) deposits.

INFERENCE
Following demonetization, the balance sheets of scheduled commercial
banks (SCBs) grew significantly, reflecting a temporary surge in liquidity
within the formal banking system. With excess funds, banks reduced deposit
interest rates, making savings and fixed deposits less attractive. As a result,
many investors shifted to higher-return options, giving a notable boost to the
mutual fund industry. Between November 2016 and January 2017, mutual fund
inflows rose as households sought better yields. During this period, there was
also an increase in demand for physical assets like gold.

10. Impact of Demonetisation on Life Insurance Sector
In parallel, the life insurance sector also witnessed a remarkable surge in
premium collections, highlighting a growing shift towards formal savings. In
November 2016, life insurance premiums more than doubled, with LIC
reporting a 142% year-on-year increase and private insurers seeing nearly 50%
growth. Notably, around 85% of LIC’s collections came from single-premium
policies, indicating a strong preference for lump-sum investments.

11. Impact of Demonetisation on Real Estate Sector
Additionally, the continued weakness in the real estate sector and falling
housing prices have driven a shift in investor behavior. With physical assets
offering lower returns, households have increasingly redirected surplus funds

36

into financial instruments, signaling a rising financialization of savings and a
change in investment preferences since demonetization.

12. Demonetization has changed the saving habits of Indians, says Finance
Ministry.
ANALYSIS
Hindustan Times (2017) reported a notable shift in Indian households'
saving habits after the November 2016 demonetization. A Finance Ministry
note to a parliamentary panel revealed that more disposable income is now
being invested in formal financial instruments like bank deposits and market-
linked options, reflecting a shift from traditional, unproductive assets to
regulated financial choices.
The data revealed a significant 48% growth in gross financial savings,
including deposits, shares, insurance, and pension funds, in the financial year
2016–17. During the same period, mutual fund assets surged by 45% from July
2016 to July 2017, indicating a clear shift towards formal financial assets
among Indian household’s post-demonetization.
Additionally, the share of equities and mutual funds in household
portfolios rose from 5.29% to 11.04% in FY 2016. Gross financial savings as a
percentage of Gross National Disposable Income (GNDI) also increased from
9% to 13.3% in 2016–17, reflecting a more formal and inclusive economy.
The Finance Ministry’s report highlighted that demonetization played a
key role in reducing unaccounted wealth, eliminating an estimated Rs 6 lakh
crore of potential black money. By September 2017, the value of high-
denomination currency notes had fallen to around Rs 12 lakh crore, showing a
significant decline in the informal cash economy.

37

INFERENCE
The data clearly indicates a significant shift in investment preferences
among Indian households after demonetization in November 2016. There was a
move away from traditional, unproductive assets toward regulated financial
instruments like bank deposits, mutual funds, and equities. This shift is
highlighted by a 48% growth in financial savings, a 45% increase in mutual
fund assets, and a rise in household investment in equities and mutual funds
from 5.29% to 11.04%. These trends, along with higher financial savings and
reduced currency circulation, indicate a growing preference for transparent,
formal investment options and a more inclusive financial system.

Covid And After Days
13. Investment Trends in Ernakulam During the Pandemic
The study conducted by Liya Rajesh (2021) examines how individuals in
Ernakulam, Kerala, adjusted their investment behavior during the early months
of the COVID-19 pandemic, specifically between March and July 2020,
highlighting changes in financial strategies amid economic uncertainty.
Figure: 1 Investment Trends in Ernakulam: Mar–Jul 2020

Source: Liya Rajesh (2021) – A Snapshot of the Investment Patterns of People
in Ernakulam District, Kerala, at the beginning of the Pandemic

38

ANALYSIS
During the early months of the COVID-19 pandemic, investment habits
in Ernakulam reflected a cautious yet adaptable approach. Fixed deposits were
the top choice, making up 39.3% of investments, as people prioritized safety
and liquidity. Mutual funds (38.6%) and stocks (35.7%) gained interest,
showing a preference for market-linked returns. Insurance products accounted
for 25.5%, indicating a focus on financial security during uncertain times.
Traditional assets like real estate (9.3%) and gold (8.6%) saw reduced interest,
reflecting lower confidence in less liquid options. Overall, the trend revealed a
shift towards a balanced, diversified investment strategy combining safety and
moderate risk in response to economic uncertainty.

INFERENCE
Liya Rajesh's study shows a notable shift in investment preferences
among Ernakulam residents during the pandemic. Investors are moving away
from traditional options like fixed deposits and increasingly turning to mutual
funds and equities. This shift reflects growing awareness and a desire to balance
security with the potential for higher returns, marking a move from a risk-averse
to a more diversified, growth-focused investment approach.

14. Demat Account Growth and Digital Inclusion in Capital Markets
The study by Athul Kuriakose and Dr. Sajoy P.B (2022) examines how
digital transformation has significantly increased retail investor participation in
the Indian stock market, leading to a sharp rise in their numbers.

39

ANALYSIS
The post-demonetization and COVID-19 period witnessed a dramatic
transformation in retail investor behavior, marked by a sharp rise in Demat
account registrations in India. From 3.18 crore accounts in 2017-18, the number
grew steadily to 4.09 crore by 2019-20. However, the most significant surge
occurred in 2020-21, with a 64% jump to 5.48 crore accounts, reflecting a
drastic increase in retail participation. This trend continued in 2021-22, pushing
accounts past the 9-crore mark, signaling a clear shift from traditional savings to
direct equity and mutual fund investments.
Figure: 2 Demat Account Growth in India
Source: CDSL & NSDL Annual Report 2021-2022

INFERENCE
The rise in Demat accounts indicates a clear shift in investment
preferences, with a new generation moving away from traditional savings
toward market-linked options. This trend highlights growing financial
awareness and a focus on higher returns, marking broader financial inclusion
and a changing approach to wealth creation in India.
3.18
3.59
4.09
9.01
0
2
4
6
8
10
2017-18 2018-19 2019-20 2020-21
Demat Accounts ( In Crores)
Financial Year
Demat Account Penetration in Indian Stock Market
Total Demat Accounts

40

15. Shifting Investor Trends Post COVID – NSE Report
The National Stock Exchange (NSE) Report (2021) examines the shift in
investor behavior in India post-COVID-19, shedding light on the significant
changes in investment patterns.
Figure: 3 Client Participation in Capital Markets (%)
Source: NSE Report (2021)

ANALYSIS
Between FY16 and FY21, individual investor participation in India’s
capital market showed a steady rise, reflecting changing investment behavior. It
grew from 33% in FY16 to 35.9% in FY17 and 38.6% in FY18, holding around
39% in FY19 and FY20. A major jump occurred in FY21, with individual
turnover reaching 45%, a sharp 6% rise in just one year. This post-pandemic
surge points to growing retail investor confidence, supported by digital
platforms, work-from-home trends, and rising financial literacy. Overall, the
data highlights a structural shift towards equity investments among Indian
households.

41

INFERENCE
The findings from NSE Market Pulse Report 2021 indicates a major shift
in investment preferences among Indian households, with equity markets
becoming more popular than traditional options. Low bank interest rates and the
desire for better returns during uncertain times led many to invest in stocks. The
rise in new investor accounts and higher trading activity highlights a lasting
change in investor behavior toward market-linked investments.

16. Post-Pandemic Surge in Retail Investment Activity
The Smallcase Market Report (2022) highlights a significant
transformation in the Indian stock market, where retail investors have emerged
as a dominant force, particularly in the aftermath of the COVID-19 pandemic.
ANALYSIS
Figure -4: Equity Share in Indian Household Portfolios

Source: Smallcase Market Report (2022)
Since the introduction of demonetization in FY17, Indian
households have shown a noticeable shift in their investment behavior,
especially toward equity markets. The share of equities in household financial
assets rose from 2.70% in FY17 to 4.80% in FY22, marking nearly a 78%
increase over five years. The rise shows increased confidence in market-linked
2.70%
4.80%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Share of Equities in Indian Household
FY17FY22

42

investments and greater willingness among retail investors to embrace higher
risks for potentially greater returns. Overall, this data points to a maturing
investment mindset in India, with equities emerging as a central component in
diversified financial planning.
Figure-5: AUM of Mutal Funds

Source: Smallcase Market Report (2022)
Between 2018 and the end of FY 2022, mutual funds in India
saw an 82% rise in Assets Under Management (AUM), growing from ₹11.6
lakh crore to ₹21.1 lakh crore. This sharp increase reflects a strong shift in
investor preference toward transparent, professionally managed investments.
The growth in AUM shows rising trust in capital market instruments, especially
among retail investors. It also highlights the role of SIPs in making mutual
funds more accessible. Overall, this trend points to a more mature and long-term
approach to financial planning in India.

INFERENCE
The data clearly indicates a significant shift in investment preferences
among Indian households, moving away from traditional conservative avenues
like fixed deposits towards market-linked instruments such as equities and
mutual funds. This transition is supported by the rising share of equity in
household portfolios and the consistent growth in mutual fund assets under
11.6
21.1
0
5
10
15
20
25
Till 2018 FY 2022
Investors AUM of Mutual Funds ( In Lakh Crores)
Investors AUM of Mutual Funds ( In Lakh Crores)

43

management (AUM), reflecting increased confidence and active participation
by retail investors in the capital markets.

17. Shifting Investment Trends in India: The Rise of Capital Market
Instruments
The CRISIL Report (2022) highlights a significant shift in India’s
investment behavior, with an increasing number of investors moving away from
traditional bank deposits and towards capital market instruments.
ANALYSIS
The shift in investment preferences is evident in the growth of the
investment industry, which reached ₹135 lakh crore by March 2022, 57% of
India’s GDP. This reflects rising confidence in market-based investments and a
changing approach to wealth creation. While bank fixed deposits remain
popular, their appeal is fading. Managed investments have grown at 16%
annually over the past five years, outpacing the 10% growth of bank deposits,
showing a clear move toward higher-return options.
Figure – 6: Share of Net Financial Savings
Source: CRISIL Report (2022)
The above chart highlights a clear shift in household savings patterns
in recent years. Financial savings rose from 45% in FY16 to 52% in FY21,

44

while physical savings dropped from 55% to 47%, showing a growing interest
in capital market instruments like mutual funds and insurance. The share of
mutual funds in financial assets increased from 7% in June 2018 to nearly 10%
by March 2022, reflecting rising trust in market-linked options. Insurance funds
also grew from 20% to 24%, indicating a stronger focus on long-term financial
security. Overall, the trend points to a broader move toward diversified, market-
driven investments.

INFERENCE
The data indicates a significant change in how Indian households invest,
moving away from traditional physical assets toward financial instruments.
Between FY16 and FY21, financial savings increased from 45% to 52%, while
physical savings decreased from 55% to 47%. This trend is underscored by the
rising popularity of mutual funds and insurance, reflecting greater confidence in
market-linked investments.

18. Trends in Mutual Fund SIP Flows Amid Market Volatility
ANALYSIS
Figure -7: SIP Flows during market Volatility
Source: Securities and Exchange Board of India (SEBI)

45

Between April 2016 and October 2022, SIP (Systematic
Investment Plan) flows in India rose steadily from around ₹3,000 crore to nearly
₹13,000 crore per month, a growth of over 330%. This upward trend continued
even during market volatility, especially during the sharp COVID-19 crash in
early 2020, when the Nifty 50 fell by about 38%. Yet, SIP inflows remained
stable, showing strong investor resilience and growing trust in mutual funds.
The data highlights a more mature investor mindset and increasing confidence
in disciplined, long-term wealth-building strategies.

INFERENCE
The overall trend indicates a clear shift in investment preferences among
Indian households from traditional savings to financial instruments like mutual
funds and insurance. This reflects rising financial awareness and a growing
preference for structured, long-term strategies like Mutual Fund SIPs, indicating
that investors are now more focused on capital market participation to build
lasting wealth, despite market volatility.

19. Changing Savings Trends and Systemic Banking Risks
A report in the New Indian Express (2024) brings attention to concerns
raised by M.V. Rao, Chairman of the Indian Banks’ Association, regarding a
shift in depositors’ behavior.
ANALYSIS
In recent years, Indian investors have shifted towards non-banking
financial instruments like mutual funds and equities, moving away from
traditional bank deposits due to low interest rates. While this trend offers higher
returns, M.V. Rao cautions that it could weaken banks' financial strength, as

46

they rely on public deposits for lending. A decline in deposit inflows may lead
to tighter liquidity, restricted credit, and potentially affect economic growth.

INFERENCE
The IBA chairman’s insights highlight a shift in India’s investment
preferences. While banks remain important, they are losing dominance as more
investors turn to alternatives like mutual funds and equities. This change shows
growing financial maturity among investors seeking better returns and
flexibility. However, it also raises concerns about how traditional banks will
adapt to these evolving preferences.

20. Kerala Co-Bank Scams and Investor Migration
Kerala’s cooperative sector is facing a severe crisis of trust, driven by
widespread financial fraud and poor governance, according to a report by The
New Indian Express. These issues have shaken public confidence in a system
once considered the backbone of local financial stability.
ANALYSIS
Amid financial instability in Kerala, the cooperative banking sector has
seen a significant loss of public trust. Over the past six years, 399 cooperative
banks have faced allegations of financial misconduct, highlighting systemic
issues. Shockingly, 164 institutions failed to return matured deposits, causing
public outrage, and raising concerns about their financial accountability.
INFERENCE
The ongoing crisis in Kerala's cooperative sector has led to a shift in
investment preferences, with people moving away from cooperative banks
toward more regulated and transparent financial options. Erosion of trust in

47

these institutions has driven investors towards safer choices like mutual funds,
post office schemes, and fixed deposits in commercial banks. This shift
highlights a change in risk appetite and growing confidence in formal financial
markets, boosting the strength of regulated investment avenues in the state.

21. Changing Investment Preferences in Kerala Post Covid
The State Level Bankers' Committee (SLBC) reports a noticeable decline
in deposits with cooperative and public-sector banks in Kerala, indicating a shift
in the state's banking trends and depositor preferences.
ANALYSIS
Over recent years, banking behavior in Kerala has undergone a notable
transformation, due to trust issues with cooperative institutions. Deposits in
public-sector and cooperative banks have declined, while private and small
finance banks are growing. Kerala Bank, the state's largest cooperative bank,
saw a 1.02% drop in deposits, from ₹69,983.47 crore in March 2022 to
₹69,271.70 crore in March 2023. Similarly, total cooperative bank deposits in
Kerala fell by 0.28%, reflecting investor caution. Kerala Bank's market share
dropped from 10% in March 2021 to 8.7% in March 2023, showing a loss of
public confidence and a shift towards safer, more transparent options.
INFERENCE
The ongoing withdrawal of deposits from cooperative banks in Kerala,
driven by lower interest rates and declining trust especially in Kerala Bank,
shows a clear shift in investment preferences. Investors are increasingly
choosing mutual funds and market-based instruments for better returns, moving
towards financial options over traditional cooperative bank deposits.

48

22. Shifting Investment Patterns: From Bank Deposits to Equity Markets
Indian household investors are increasingly moving their funds from
traditional savings instruments like fixed deposits to the equity markets. This
shift is further emphasized in a study conducted by BofA Securities. The trend
reflects a growing interest in higher-return investment avenues among Indian
investors.
ANALYSIS
Data from BofA Securities and Jefferies Research highlights a noticeable
shift in Indian household investment behavior over the past two decades. In
FY2001, 39% of savings went into bank deposits, and only 4% into capital
markets. By FY2023, bank deposits had decreased to 37%, while capital market
investments had doubled to 8%. This increase aligns with the growth of India’s
stock market, now the fifth-largest globally, reflecting a broader trend towards
diversified portfolios and more market engagement.

INFERENCE
The report highlights a notable shift in Indian households’ investment
preferences, with more people moving towards capital markets instead of
traditional savings methods. While fixed deposits remain popular, their demand
is declining, and capital market participation has increased from 4% in 2001 to
8% in 2023. This shift reflects a growing focus on wealth-building and a
willingness to take on market risks for higher returns. As the capital market
matures, this trend is likely to continue, with households diversifying their
portfolios and becoming more informed investors.

49

23. Surge in Demat Accounts Reflects Changing Investment Trends
India's capital market reached a major milestone in March 2024, with demat
accounts exceeding 150 million for the first time, highlighting growing interest
in financial markets among retail investors.
Figure –8: Growth of Demat Accounts
Source: Securities and Exchange Board of India (SEBI)
ANALYSIS
Indian households have increasingly turned to equity markets in the past
four years, with demat accounts growing from 54.4 million in FY21 to 151.4
million in FY24 a nearly threefold increase. The addition of 37 million new
accounts in FY24 alone reflects growing investor participation. This shift shows
a move from traditional saving methods to more active, market-based
investments, indicating greater confidence in the formal financial ecosystem,
especially among retail investors.
INFERENCE
There has been a notable transformation in the investment preferences of
Indian households, as they gradually shift from conventional avenues such as
54.4
89.7
114.5
151.4
0
20
40
60
80
100
120
140
160
FY21 FY22 FY23 FY24
Total Demat Accounts ( In Millions)
Total Demat Count ( In Millions)

50

fixed deposits, gold, and real estate to more market-linked options like equities
and mutual funds. This change is underscored by the surge in demat account
openings, which grew sharply from 54.4 million in FY21 to 151.4 million in
FY24, reflecting a growing interest towards stock market participation and
financial investment instruments.

24. India’s Growing Preference for Mutual Funds
According to the Association of Mutual Funds in India (AMFI), the
Indian mutual fund industry has witnessed remarkable growth over the past
decade, mainly due to increased household participation. A notable trend is the
growing popularity of Systematic Investment Plans (SIPs), showing a shift in
how families manage their savings. This is further supported by the consistent
rise in Assets Under Management (AUM) in mutual funds.
ANALYSIS
The AMFI report indicates a substantial and sustained increase in mutual
fund investments over the past decade, reflecting a major shift in how Indian
households grow and manage their savings. From ₹11.81 lakh crore in 2015 to
₹67.25 lakh crore in 2025, this fivefold growth signals a move from traditional
savings to market-linked instruments. Key milestones in assets under
management (AUM), such as reaching ₹10 lakh crore in 2014, ₹20 lakh crore in
2017, and ₹30 lakh crore in 2020, showcase the deepening penetration of
mutual funds across the country. This surge is not only evident in the growing
number of accounts but also in the increase in monthly contributions, which
increased from ₹21,262 crore in June 2024 to ₹26,400 crore in January 2025, a
jump of ₹5,138 crore in just seven months. By January 2025, mutual fund
houses were managing about 8.99 crore active SIP accounts, emphasizing a
significant change in investor behaviour and preferences.

51

Table 9: Total SIP Contributions by Financial Year (2016-2025)
Financial Year Total SIP Contribution (₹ crore)
2016-17 43921
2017-18 67190
2018-19 92693
2019-20 100084
2020-21 96080
2021-22 124566
2022-23 155972
2023-24 199219
2024-25 237427
Source: The Association of Mutual Funds in India (AMFI)
The steady rise in mutual fund investments, shown by the growth
in SIP contributions from ₹43,921 crore in 2016-17 to ₹2,37,427 crore in 2024-
25, highlights a clear shift towards more structured and diversified investment
strategies. This consistent growth reflects not only a recovery from the
pandemic slowdown but also a long-term change in investor behavior, driven by
greater awareness of market-linked returns and the benefits of systematic,
disciplined investing.

INFERENCE
Over the past decade, there has been a significant shift in investment
preferences among Indian households, as evidenced by the AMFI report. The
substantial rise in mutual fund assets under management (AUM) and consistent
growth in SIP inflows highlight a clear move towards diversified and
disciplined investing. This trend reflects a broader transformation in investor
mindset moving away from traditional saving instruments toward market-linked
avenues perceived as reliable and less complex. Ultimately, the report
underscores the growing trust in mutual funds as essential components of long-
term financial planning in a progressively maturing financial ecosystem.

52

3.2 ANALYSIS BASED ON PRIMARY DATA

1. Respondents’ Own Assessment of Level of Vigilance on Changes in
Economic and Political Scenario &Future of Investment Market
Table 10:
Response Option Range (%) Number of Respondents Percentage (%)
A 0 to 20% 0 0%
B 20 to 40% 0 0%
C 40 to 60% 3 10%
D 60 to 80% 9 30%
E 80 to 100% 18 60%
Total 30 100%
Source: Primary Data

Figure: 9
INTERPRETATION
The data shows that 60% of respondents are highly vigilant, with 80–
100% awareness of economic and political changes affecting their investments.
Another 30% are moderately vigilant, with 60–80% awareness. Only 10% are
0 0
10%
30%
60%
Awareness of Economic & Political Impact on Investments
0 -20%20-40%40-60%60-80%80-100%

53

less vigilant, with 40–60% awareness, and none fall below the 40% vigilance
level.

INFERENCE
The respondents in this study are closely monitor daily changes in the
economic and political landscape and their effects on the investment market.
The sample seems to appropriate for the study as it represents a community that
is generally aware of how these changes influence investment decisions,
particularly in organized markets.

54

2. Distribution of Respondents based on their role in the Financial Market
Table 11:
Category Frequency Percentage (%)
Investor 9 30%
Speculator 0 0%
Market Analyst 15 50%
Agent in Financial Market 6 20%
Observer 0 0%
Total 30 100%
Source: Primary Data
Figure: 10
INTERPRETATION
Most respondents (50%) are market analysts, followed by 30% investors
and 20% financial market agents.

INFERENCE
All respondents are knowledgeable investors, market analysts, or
financial officials involved in daily transactions or analysis, adding strength and
credibility to the previous findings.
30%
0%
50%
20%
0
Roles of Respondents in the Financial Market
Investor Speculator
Market Analyst Agent in Financial Market
Just an Observer

55

3. Trend of change in Percentage of earnings invested in organized markets
Table 12:
Year

Average Investment %

2014-15 4.6%
2015-16 7.2%
2016-17 10.0%
2017-18 13.8%
2018-19 17.0%
2019-20 22.1%
2020-21 24.4%
2021-22 27.5%
2022-23 30.7%
2023-24 36.0%
Source: Primary Data

Figure: 11
INTERPRETATION
The data shows a steady rise in the share of income invested in
organized markets from 2014-15 to 2023-24. Starting at 4.6% in 2014-15, it
grew to 7.2% in 2015-16, 10.0% in 2016-17, and 13.8% in 2017-18. The trend
4.60%
7.20%
10.00%
13.80%
17.00%
22.10%
24.40%
27.50%
30.70%
36.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2014-152015-162016-172017-182018-192019-202020-212021-222022-232023-24
Average Investment Percentage
Year
Average Investment Percentage Over Time
Average Investment %

56

continued with 17.0% in 2018-19, 22.1% in 2019-20, and 24.4% in 2020-21.
Investment kept increasing, reaching 27.5% in 2021-22, 30.7% in 2022-23, and
peaking at 36.0% in 2023-24.

INFERENCE
There has been a consistent rise in the percentage of income invested in
organized markets over the ten-year period from 2014–15 to 2023–24. This
indicates a growing awareness and trust among individuals towards formal
investment avenues. The steady increase from 4.6% to 36.0% reflects a
significant shift in saving and investment habits of people.

57

4. Ranking Trends of Investment Avenues in India (2014–2024)
A- Deposits in Co-op bank, B- Deposits in scheduled commercial banks,
C- Life Insurance Schemes, D- National savings and RD schemes, E- Gold and
precious metals, F- Real estate, G- Flats, H-Bonds, I- Mutual funds, J-
Speculative trade (including Futures and options), K-Equity, L-Own business or
partnerships, M- Still Others.
Table No: 13
Pre-Demonetization Days - Ranking of Investment Options
Source: Primary data

INTERPRETATION
Investments in co-operative bank deposit schemes (Co-bank) has been
declining, from 10.26% in 2014-15 to 9.49% in 2016-17, a trend that began
even before demonetization. While deposits in commercial banks remain stable,
investments in life insurance and savings schemes show a slight decline. Gold,
real estate (excluding flats), and flats exhibit fluctuating trends, whereas
Avenue Actual Scores Percentages
2014-15 2015-16 2016-17 2014-15

2015-16 2016-17
A 40 38 37 10.26 9.74 9.49
B 69 68 70 17.69 17.44 17.95
C 44 40 41 11.28 10.26 10.51
D 48 45 46 12.31 11.54 11.79
E 53 57 55 13.59 14.62 14.1
F 31 35 33 7.95 8.97 8.46
G 22 24 22 5.64 6.15 5.64
H 14 14 15 3.59 3.59 3.85
I 25 26 28 6.41 6.67 7.18
J 16 15 14 4.10 3.85 3.59
K 22 23 26 5.64 5.9 6.67
L 4 3 1 1.03 0.77 0.26
M 2 2 2 0.51 0.51 0.51
Total 390 390 390 100% 100% 100%

58

organized market investments are generally on the rise, though not significantly.
Investment in personal businesses is steadily decreasing.

INFERENCE
There has been a trend of falling Co-Bank deposits, lack of consistency in real
estate and gold markets, and a steadily increasing trend in organized market
investments.
Table No: 14
Post Demonetization Period - Ranking of Investment Options
Avenue Actual Scores Percentages
2017-18 2018-19 2019-20 2017-18 2018-19 2019-20
A 35 33 29 8.97 8.46 7.44
B 71 70 68 18.21 17.95 17.44
C 42 41 40 10.77 10.51 10.26
D 40 36 34 10.26 9.23 8.71
E 57 54 50 14.62 13.85 12.82
F 26 23 20 6.67 5.90 5.13
G 18 15 13 4.62 3.85 3.33
H 14 16 15 3.59 4.10 3.85
I 41 49 60 10.51 12.56 15.38
J 13 13 14 3.33 3.33 3.59
K 31 38 45 7.95 9.74 11.53
L 1 1 1 0.26 0.26 0.26
M 1 1 1 0.26 0.26 0.26
Total 390 390 390 100% 100% 100%
Source: Primary data

INTERPRETATION
There is a declining trend in co-operative bank deposits, falling from
9.49% in 2016-17 to 7.44% in 2019-20, along with a slight drop in commercial

59

bank deposits and a sharp decline in savings schemes, real estate, and flats. In
contrast, mutual fund schemes show rapid growth, rising from 7.18% to 15.38%
in the same period. Speculative trade options have grown slowly and steadily,
while investments in equity, own business, and other options have remained
stable.

INFERENCE
Mutual funds showed a steady and rapid growth trend, organized market
avenues grew slowly but consistently, while co-bank deposits saw a steady and
significant outflow of funds in the post-demonetization period.

Table No: 15
Covid and After Days- Ranking of Investment Options
Source: Primary data
Avenue Actual Scores Percentages
2020
-21
2021
-22
2022
-23
2023
-24
2020
-21
2021
-22
2022-
23
2023-
24
A 24 19 10 3 6.15 4.87 2.56 0.77
B 63 57 50 44 16.15 14.62 12.82 11.28
C 42 41 42 43 10.77 10.51 10.77 11.03
D 30 27 22 16 7.69 6.92 5.64 4.10
E 48 42 35 26 12.31 10.76 8.97 6.66
F 18 15 17 14 4.62 3.85 4.36 3.59
G 12 13 14 15 3.08 3.33 3.59 3.85
H 16 15 16 16 4.10 3.85 4.10 4.10
I 69 80 95 111 17.69 20.51 24.36 28.46
J 13 14 15 16 3.33 3.59 3.85 4.10
K 53 65 72 84 13.59 16.67 18.46 21.54
L 1 1 1 1 0.26 0.26 0.26 0.26
M 1 1 1 1 0.26 0.26 0.26 0.26
Total 390 390 390 390 100% 100% 100% 100%

60

INTERPRETATION
There has been a sharp decline in co-operative bank deposits, dropping
from 7.44% in 2019-20 to just 0.77% in 2023-24. Similarly, scheduled
commercial bank deposits fell from 17.44% to 11.28% during the same period,
indicating a serious shift in investor preferences. Investments in savings
schemes also declined from 8.71% to 4.10%. In contrast, mutual fund
investments have seen nearly two-fold growth, rising from 15.38% in 2019-20
to 28.46% in 2023-24. Investment in gold has dropped from 12.82% to 6.66%,
while the real estate market continues to decline steadily, apart from a brief hike
in 2017–18. Investments in flats and bonds have remained relatively stable with
minor fluctuations. Mutual funds show consistent growth, climbing steadily
from 6.41% in 2017-18 to 28.46% in 2023-24.
Speculative investments are growing moderately, while interest in equities has
nearly tripled. However, investments in personal businesses and other
miscellaneous purposes form only a small portion of total savings and have
remained stable over the years.

INFERENCE
Investments in co-operative bank deposits have dropped significantly,
along with a sharp decline in savings schemes, scheduled banks, and other
traditional options except flats. In contrast, mutual funds have shown
remarkable growth, equity investments are steadily increasing, and even
speculative options are attracting more interest, while debt investments remain a
cautious choice.

61

5. Key Reasons for Changes in Investment Priority – Respondent Insights
Based on Questionnaire Response:
• Growing Awareness & Education: Increased financial literacy and
awareness campaigns significantly boosted investor understanding,
particularly of Mutual Funds and equities.
• Popularity of Mutual Funds: SIPs have made Mutual Funds a preferred
option for goal-based and relatively safer investments.
• Equity Market Attraction: Equities are increasingly chosen for their
high return potential, especially among risk-tolerant investors.
• Trust in Traditional Avenues: Fixed Deposits remain favoured for their
stability and liquidity, even with lower returns.
• Decline of Real Estate and Co-operative Banks: Real estate lost appeal
due to regulatory hurdles and liquidity issues, while trust in co-operative
banks declined.
• Fintech Influence and Digital Access: Easy access to investment
platforms through fintech has enabled broader participation in financial
markets.

INFERENCE
The responses indicate a shift towards market-linked investments,
especially mutual funds and equities, driven by greater financial awareness and
fintech access. Since 2016, mutual funds, particularly through SIPs, have gained
popularity. Traditional investments like real estate and insurance have lost
priority due to liquidity and return concerns. While some still prefer fixed
deposits for their stability, there is a clear trend towards diversified, goal-
oriented financial instruments.

62

6. Expert Opinion on Changing Investment Patterns of Keralites (Post-
Demonetization & Co-op Bank Scams)
Key Observations:
• Shift in Investment Preferences: Post-demonetisation and co-operative
bank scams triggered a clear shift from traditional co-operative deposits
to market-based instruments like mutual funds and equities.
• Rise in Financial & Technical Literacy: Increased awareness, especially
among the youth and educated middle-class, has led to a better
understanding of SIPs, compounding, and diversification benefits.
• Trust & Security Concerns: Mistrust in small banks, particularly co-
operative banks, acted as a catalyst for people to explore safer and
regulated avenues like mutual funds.
• Gold and FDs Still Dominate: Despite the growth of mutual funds,
traditional instruments like gold and fixed deposits continue to be the
preferred choice for a large section of society.
• Urban and Youth-Led Transition: The shift towards market instruments
is more pronounced in urban areas and among younger, educated
investors, while rural and older demographics still Favor traditional
options.

INFERENCE
The expert insights indicate a notable shift in investment behavior among
Keralites, driven by post-demonetization effects and co-operative bank
scandals. While market-based instruments like mutual funds have gained
momentum, traditional assets such as fixed deposits and gold still retain good
preference. The transformation is ongoing, but gradual, with deep-rooted habits
towards market-based instruments.

63

7. Trend of Investment Flow to Mutual Fund Schemes
Table No: 16
Response Number of Respondents Percentage
Yes 30 100%
No 0 0%
No Opinion 0 0%
Total 30 100%
Source: Primary Data

Figure: 12

INTERPRETATION
All respondents (100%) agreed that there is a rising trend in investment flow
toward mutual fund schemes. This unanimous response highlights the growing
popularity and investor confidence in mutual funds.

INFERENCE
All respondents prefer investing in mutual fund schemes, showing strong
confidence in their potential. This trend reflects a shift from traditional methods
to mutual funds, seen as safer and professionally managed, indicating growing
trust in diversified investment options.
Trend of Investment Flow to Mutual Fund Schemes
Yes No No Opinion

64

8. Impact of Demonetization on Money Laundering Control
Table No: 17
Response Number of Respondents Percentage
Least impact 6 20%
Moderate control 12 40%
Good control 12 40%
Best control 0 0%
Total 30 100%
Source: Primary Data
Figure: 13
INTERPRETATION
The data shows that 40% of respondents felt demonetization had a moderate
impact on controlling money laundering, while another 40% believed it had a
good impact. However, none saw it as highly effective, and 20% thought it had
the least effect.
INFERENCE
Most respondents (80%) believed demonetization helped control money
laundering to some extent, but none saw it as the best solution. Meanwhile, 20%
felt its impact was minimal, suggesting it was somewhat effective but not a
complete solution.
Least impact
20%
Moderate Control
40%
Good Control
40%
Best Control
0%
Demonetisation Impact on Money Laundering
Least impactModerate ControlGood ControlBest Control

65

9. Co-Bank Scams in Kerala Led to a Shift from Co-Bank Deposits to
Mutual Fund Schemes
Table No: 18
Response Number of Respondents Percentage
To a minimal extent 6 20%
To a good extent 18 60%
Significantly 6 20%
In full 0 0%
Total 30 100%
Source: Primary Data
Figure: 14
INTERPRETATION
The table shows that 60% of respondents believe the co-bank scams in Kerala
caused a significant shift from co-bank deposits to mutual fund schemes, while
20% saw a minimal change and 20% noted a good extent of impact. No
respondents felt the shift was complete.
INFERENCE
The data suggests that the co-bank scams in Kerala significantly influenced
investment behavior, with 60% of respondents reporting a major shift from co-
bank deposits to mutual funds. However, no respondents believed the shift was
complete, indicating that while the scams had a noticeable impact, the change
was not total.
20%
60%
20%
0%
0%
10%
20%
30%
40%
50%
60%
70%
To a minimal extentTo a good extentSignificantly Not at all
Respondent Percentage
Co-Bank Scams and Mutual Fund Adoption in Kerala

66

CHAPTER – 4
FINDINGS AND CONCLUSION S

4.1 Findings Based on Analysis of Secondary Data
Pre – Demonetization Scenario
During pre-demonetization days, the first priority for investment was
gold, followed by bank deposits including co-operative bank deposits, life
insurance policies, real estate and mutual funds in order.
Investors in general with moderate incomes were mostly risk averse and
unaware of the latest developments in organized markets and evolution of risk
minimum avenues for investment in organized investment markets as mutual
funds. The awareness level on equity and bond markets and mutual fund
schemes are at a fairly good level but the investors are still doubtful. The trend
is, however, set in.
Post – Demonetisation Days
1. The demonetization of high-value currency notes in November 2016
significantly shifted the investment patterns of Indian households. Traditionally,
these households favored safe and tangible assets like gold and real estate,
leading to a lower share of financial assets in their savings. However, during
post-demonetization days, a gradual transition towards financial assets has been
observed, reflecting a broader change in investment behavior. Mutual funds
have been a key driver of this transformation, marking 155% growth over a
period of one year ending on 31
st
march, 2017. This trend indicates a growing
awareness and trust in mutual funds, suggesting that while gold and real estate
still hold value, financial assets are increasingly attractive to Indian investors.

67

2. This surge highlights the increasing trust of retail investors in mutual
fund investments through disciplined, long-term strategies, mostly, the rising
popularity of Systematic Investment Plans (SIPs). The widespread adoption of
SIPs has played a crucial role in boosting the mutual fund industry’s asset base.
It reflects a shift in investor behavior from lump-sum investments to structured
monthly contributions.
3. The Economic Times (2017) report analyzes the impact of the November
2016 demonetization policy on Indian household investment behavior, revealing
significant changes in savings and investment patterns. Traditionally, Indian
households have allocated a large fraction of their wealth to physical assets,
particularly gold and real estate. Estimates suggest that around 78-95% of
household savings were directed towards these assets. However,
demonetization has transformed this trend by discouraging cash-based
transactions and reducing the appeal of investments in real estate and gold. As a
result, financial assets such as equities, mutual funds, and insurance have gained
prominence. The stock market witnessed a substantial rise in activity post-
demonetization. A significant portion of this growth is attributed to the
liquidity injected into banks due to demonetization, which subsequently
found its way into the stock market.
4. The surge in demat accounts opened in the post-demonetization period is
a clear sign of the shift toward organized market securities. In March 2017, over
2 lakh new demat accounts were opened, the highest in seven years. By October
31, 2017, NSDL reported more than 16.4 million active demat accounts,
reflecting a growing interest in financial securities.
5. The AMFI report dated Aug. 2017 clearly pictures the significant shift of
funds from conventional sectors to equity-oriented mutual fund schemes.
Between April and August 2017, inflows amounted to Rs. 61,400 crores,

68

compared to only Rs. 18,500 crores during the same period the previous year.
This represents a remarkable growth of 232 percent.
Post-demonetization, the insurance sector witnessed a surge in premium
collections, indicating a shift towards risk mitigation and long-term
investments, while the real estate sector declined due to reduced cash flow,
liquidity constraints, and stricter regulations, causing project delays and buyer
hesitation.
Overall, demonetization shifted household savings from physical assets to
financial instruments, indicating a transformation in investment patterns. The
increase in stock market participation, mutual fund investments, and insurance
adoption highlights the growing formalization of financial savings in India.
6. The aggregate Assets Under Management (AUM) surpassed Rs. 20 trillion
(2 lakh crore) in July 2017. AUM was Rs. 1,75,000 crore on 31/3/2017 and Rs.
2,06,000 crore on 31/8/2017. Demonetization in 2016 significantly transformed
the mutual fund industry, leading to increased participation from retail investors
and a shift in preferences toward financial assets.
7. The increase in fund flow from traditional avenues to organized markets
post-demonetization is evident in Table 8, based on SEBI Reports. There was a
notable surge in mutual fund net flows across all categories between 2015-16
and 2016-17. Inflows into income or debt schemes rose over 303%, showing a
strong preference for safer investment options. Equity and balanced schemes
also experienced significant inflow growth at 130.84% and 139.57%,
respectively, indicating rising investor confidence. Notably, Exchange Traded
Funds (ETFs) surged by 376.84%, reflecting a shift toward passive, low-cost
investment vehicles.
The remarkable growth in mutual fund inflows post-demonetization
highlights a trend of financialization in the Indian economy. With reduced

69

reliance on cash and improved banking access, investors are shifting their
savings from traditional avenues like gold and real estate or chit funds to mutual
funds. This transition indicates a movement away from traditional options,
including bank deposits, towards organized market segments. While it may
challenge the banking sector by decreasing low-cost deposits, it also promotes
growth in capital markets and the investment management industry.
8. The Reserve Bank of India (2017) report on “Household Savings and
Investment Behavior in India” noted that demonetization significantly impacted
the financial sector. The withdrawal of high-denomination currency notes led to
a notable decline in currency circulation and a sharp surge in bank deposits,
resulting in increased liquidity in the banking system. Consequently, banks
lowered deposit interest rates, leading many to shift their investments to more
attractive options, particularly benefiting the mutual fund industry. With
traditional physical assets losing demand and falling bank deposit interest rates,
households increasingly favored formal financial instruments. Mutual funds,
emerged as a popular investment option due to their potential for higher returns
and transparency.
9. The life insurance sector also witnessed a remarkable surge in premium
collections, highlighting the trend towards formal savings. In November 2016,
Life Insurance Corporation (LIC) of India reported a 142% year-on-year
increase in premiums, while private insurers saw nearly a 50% rise. Notably,
about 85% of LIC's collections came from single-premium policies, indicating a
preference for lump-sum investments.
10. Hindustan Times (2017) reported a notable shift in Indian households'
saving habits after the demonetization drive in November 2016. A Finance
Ministry note indicated that more disposable income is now being invested in
formal financial instruments like bank deposits and market-linked investments.

70

This reflects a transition from traditional assets to regulated options such as
shares, debentures, insurance, and mutual funds, highlighting the growing
preference for formal financial assets among Indian household’s post-
demonetization.
The gross financial savings as a percentage of Gross National Disposable
Income (GNDI) rose from 9% to 13.3% in 2016-17, reflecting a more formal
and inclusive economy post-demonetization.
Additionally, the Finance Ministry stated that demonetization was crucial in
curbing unaccounted wealth, eliminating an estimated Rs 6 lakh crore of black
money. By September 2017, the value of high-denomination currency notes fell
to around Rs 12 lakh crore, indicating a significant decline in the informal cash
economy.
11. The CRISIL Report (2022) highlights a significant shift in India’s
investment behavior, with more investors favoring capital market instruments
over traditional bank deposits. The change in investment preferences is reflected
in the growth of the investment industry, which by March 2022, saw its total
assets reach ₹135 lakh crore, representing 57% of India’s GDP. Bank fixed
deposits remain popular but are declining. Managed investments grew at 16%
per year over the last five years, compared to 10% for bank deposits, indicating
that more investors are seeking higher returns.
Financial savings saw a notable increase, rising from 45% in FY16 to
52% in FY21, while physical savings dropped from 55% to 47%. This shift
reflects a growing preference for capital market instruments like mutual funds
and insurance. The share of mutual funds in household financial assets rose
from 7% in June 2018 to nearly 10% by March 2022, and insurance funds
increased from 20% to 24%. These trends indicate a shift towards diversified,
market-oriented investments for long-term financial security.

71

CONCLUSION
The findings cited above provide a clear picture of how demonetization has
impacted the investment scenario in India. It highlights several key effects:
The changing patterns of investment scenario in the country and the shift of
funds from conventional avenues to more productive and riskier organized
market securities. However, traditional investments like gold still remain
popular.
Demonetization has significantly helped control black money and money
laundering, although these issues continue to be major challenges.
A trend of the shift towards cashless economy and digitalization has set in
motion seriously.

Covid and After Days
The brief review of the study results given below is pictorial of the
gradual shift in investment attitude and behavior during the Covid and After
Days.
12. Liya Rajesh’s study (2021) investigates the investment behavior of
individuals in the early months of the COVID-19 pandemic, covering a period
between March and July 2020. The study gives a snapshot of the changes in the
Investment Patterns of the households in Ernakulam District, Kerala, at the
beginning of the Pandemic. Fixed deposits emerged as the most popular
investment, representing 39.3%, as people focused on safety and liquidity.
Mutual funds (38.6%) and stocks (35.7%) also gained traction, indicating a
preference for market-linked returns. Insurance products accounted for 25.5%,
reflecting concerns about financial protection. In contrast, traditional assets like

72

real estate (9.3%) and gold (8.6%) saw less interest, suggesting decreased
confidence in these less liquid options. Overall, the trend showcases a shift
towards a balanced investment strategy amid economic uncertainty.
13. The study by Athul Kuriakose and Dr. Sajoy P.B (2022) examines the
significant impact of digital transformation on retail investor participation in the
Indian stock market. It notes a sharp increase in retail investors, evidenced by
the rise in demat accounts from 3.18 crore in 2017-18 to 5.48 crore in 2020-21,
marking a 64% growth in the last year alone. This trend continued in 2021-22,
with accounts surpassing 9 crores, indicating a shift from traditional savings to
direct equity and mutual fund investments.
14. A SEBI Report (2022) on SIP flows from April 2016 to October 2022,
exhibited a significant and steady rise from around ₹3,000 crore to nearly
₹13,000 crore per month, a growth of over 330%. This upward trend persisted
even during volatile phases in the Nifty 50 index, most notably during the sharp
COVID-19 crash in early 2020. Despite a market drop of around 38% during
that period, SIP inflows remained largely unaffected, indicating strong investor
resilience and trust in the long-term potential of mutual funds. Overall, the data
reflects a matured investor mindset and a growing preference for structured,
long-term strategies like Mutual Fund SIPs, indicating increasing participation
in capital markets despite fluctuations.
15. The National Stock Exchange (NSE) Report (2021) highlights a significant
shift in investor behavior in India post-COVID-19. From FY16 to FY21,
individual investor participation in the capital market increased notably, with a
remarkable 45% client turnover in FY21, up by 6% in just one year. This surge
indicates a transformation in retail investor confidence and awareness, fueled by
digital platforms, remote work, and improved financial literacy. With low bank
interest rates prompting a search for better returns, more individuals turned to

73

stock market investments, signaling a long-term preference for market-linked
assets.
16. The Smallcase Market Report (2022) underscores a notable transformation
in the Indian stock market, with retail investors emerging as a dominant force,
particularly in the aftermath of the COVID-19 pandemic.
Since demonetization in FY17, the share of equities in household financial
assets rose from 2.70% to 4.80% by FY22, marking a 78% increase over five
years. This shift indicates growing confidence in market-linked investments and
a willingness among retail investors to take on higher risks for potentially
greater returns. Additionally, the Assets Under Management (AUM) of mutual
funds in India surged approximately 82%, increasing from ₹11.6 lakh crore in
2018 to ₹21.1 lakh crore by the end of FY22. This reflects a significant change
in investor preferences towards professionally managed options, highlighting a
maturing investment culture in India focused on long-term, diversified financial
planning.
17. A report in the New Indian Express (2024) draws attention to concerns
raised by M.V. Rao, Chairman of the Indian Banks’ Association, regarding
changing depositor behaviors and systemic banking risks. Rao warns that the
growing preference for mutual funds and equities, along with lower interest
rates on bank deposits, could weaken banks' financial strength. This steady
decline in deposit inflows might lead to tighter liquidity and restricted credit,
affecting economic growth. As customers increasingly turn to alternatives like
mutual funds and equities, traditional banks face challenges in adapting to these
new preferences.

74

Impact of CO-Bank Scams in Kerala
The impact of Co-Bank scams and the consequent turbulence in the
investment scenario in Kerala, is brought out through the findings of the
following secondary data analyses.
18. According to a report from The New Indian Express in 2022, the
cooperative banking sector in Kerala has seen a significant decline in public
trust since 2018-19, with 399 banks facing allegations of financial misconduct.
Alarmingly, 164 institutions failed to return matured deposits, leading to public
outrage and concerns about their financial accountability. This crisis has
prompted a shift in investment preferences, as people are moving away from
cooperative banks towards more regulated and transparent options like mutual
funds, post office schemes, and fixed deposits in commercial banks. This trend
indicates a changing risk appetite among investors and a growing confidence in
formal financial markets in the state.
19. Changing Investment Preferences in Kerala during Covid and After Days
According to State Level Bankers’ Committee (SLBC), Kerala has witnessed a
noticeable decline in total deposits held with cooperative and public-sector
banks, while private and small finance banks continue to grow. Kerala Bank, the
largest cooperative bank in the state, reported a 1.02% drop in deposits, from
₹69,983.47 crore in March 2022 to ₹69,271.70 crore in March 2023. Total
cooperative bank deposits in Kerala fell by 0.28%, indicating increased investor
caution. The market share of Kerala Bank decreased from nearly 10% in March
2021 to 8.7% in March 2023, highlighting a loss of public confidence as
depositors seek safer and more transparent options.
20. Recent changes in Indian household investment behavior shows a notable
shift from traditional savings instruments, like fixed deposits, to equity markets.
A study by BofA Securities and Jefferies Research revealed that in 2001, 39%

75

of household savings were in bank deposits, with only 4% in capital markets.
By 2023, bank deposits declined to 37%, while capital market investments
doubled to 8%. This increase in participation reflects a growing focus on
wealth-building rather than mere preservation, as households embrace market
risks for higher returns. With India's stock market now the fifth-largest in the
world, this trend is expected to continue.
21. India’s capital market achieved a significant milestone in March 2024, with
demat accounts surpassing 150 million for the first time, according to a
Business Standard report. The count rose from 54.4 million in FY21 to 151.4
million in FY24, reflecting a threefold increase. The addition of 37 million new
accounts in FY24 indicates growing retail investor participation and a shift from
traditional saving methods to more active investments. This trend highlights
increasing confidence in the formal financial ecosystem among retail investors.
22. The AMFI reports that total SIP contributions grew from ₹11.81 lakh crore
in 2015 to ₹67.25 lakh crore in 2025, marking a fivefold increase over a decade.
Milestones in assets under management (AUM) include ₹10 lakh crore in 2014,
₹20 lakh crore in 2017, and ₹30 lakh crore in 2020, highlighting the increased
penetration of mutual funds. Monthly contributions rose from ₹21,262 crore in
June 2024 to ₹26,400 crore in January 2025, reflecting a growth of ₹5,138 crore
in just seven months. By January 2025, there were about 8.99 crore active SIP
accounts, indicating a significant shift in investor behavior.
Total SIP contributions jumped from ₹43,921 crore in 2016-17 to
₹2,37,427 crore in 2024-25, marking consistent year-on-year growth. This
growth trajectory reflects not just a recovery from the pandemic-induced
slowdown but also a long-term transformation in investment choices, driven by
a growing awareness of market-linked returns and the benefits of systematic,
disciplined investing.

76

CONCLUSION
The Analysis concludes bringing to light the findings based on the report
from the Association of Mutual Funds in India (AMFI) dated April 2025. A
significant portion of the funds that have been diverted from various investment
sources, including deposits in scheduled banks, during the post-demonetization
and COVID-19 periods, have flowed into mutual funds. The Indian mutual fund
industry has witnessed remarkable growth over the past decade. The growth has
been driven primarily by increased participation from households. The most
notable driving force behind the trend includes warning signals from co-
operative bank failures, growing awareness on mutual fund schemes,
digitalization and most of all, the rising popularity of Systematic Investment
Plans (SIPs).
However, recent warnings from the Reserve Bank of India’s Governor
concerning the liquidity pressures in the banking sector, and from the SEBI
Chairperson regarding the unchecked enthusiasm of younger investors in high-
risk instruments like futures and options, should be taken very seriously by
policymakers.

77

4.2 Major Findings Based on Primary Data
The respondents chosen for the study are highly aware and constantly
watching the changes taking place in the economic and political conditions in
India and their impact on the investment markets.
All the respondents are involved in the day-to-day operations in the
organized investment market as investors, analysts or as working in the field.
They responded intelligibly on the question on changes in percentage of
earnings invested on an average during the period of study.
The responses on changing trends in investment patterns over the period
of study (answer to question no. 4) is subject to analysis in detail, which is
elaborated in detail in Chapter 3, matches adequately with the analysis on the
question based on secondary data, eliminating the scope and need for of any
hypothetical study using any statistical test.
Key Findings:
• Increased financial literacy has led to more informed investment
decisions, particularly in mutual funds and equities.
• Mutual funds, especially SIPs, have become the most preferred due to
ease, safety, and goal alignment.
• Equities are gaining popularity for their high return potential, particularly
among younger, risk-tolerant investors.
• Real estate and co-operative banks witnessed a decline in preference due
to regulatory and trust-related issues.
• Fintech platforms have improved market access, encouraging a broader
range of investments.
• Post-demonetization and co-bank scams, there was a noticeable shift from
co-operative deposits to mutual funds and equities.

78

• Rising financial literacy has significantly influenced the investment
behavior of youth and educated middle-class individuals.
• Mistrust in banks has driven investors towards regulated investment
avenues.
• Mutual fund schemes are seeing a strong flow of investment, with all
respondents showing interest in them.
• Most respondents believe demonetization had a moderate to positive
impact on curbing money laundering.
• There has been a significant shift from co-operative bank deposits to
mutual fund schemes, with many respondents acknowledging this change.

4.3 FINAL CONCLUSION
All the objectives of the study are considered in detail and proved
categorically through findings of the analysis discussed above. All the
hypothetical questions are answered through analysis of secondary data from
authentic sources not necessitating the application of statistical testing methods.
The collection and analysis of primary data has enabled a lot in detailed
discussion and proving substantially the findings based on analysis of secondary
data. The analysis based on question no. 4 on the trend of changes in investment
behaviour over the three phases of study, given in item no.4 under the head
‘Analysis of Primary data’, in Chapter No. 3 “Analyses and Discussions”, is
conclusive of what is stated above on objective no. 1. There is conclusive
outcome on the other objectives are done based authentic data from secondary
sources as, is shown below in items 5 and 6 and given in detail in analyses of
secondary data, especially in ‘Covid and After Days’ part in Chapter 3.

79

CHAPTER – 5
RECOMMENDATIONS
Based on analysis of secondary data, expert opinions, and primary data, the
following recommendations are proposed to stakeholders like policymakers,
financial institutions, and individual investors:
➢ Enhance Financial Literacy and Awareness
Since demonetization, investors have moved from traditional to market-
linked options. But many rural and older people still lack financial
knowledge. The government, SEBI, and AMFI should improve investor
awareness through digital tools, local events, and regional language content.
➢ Encourage Long-term and Disciplined Investment Strategies
The growing popularity of SIPs shows a positive trend towards disciplined
investing. Policymakers and mutual fund companies should support this by
offering simpler processes, better plans, and long-term tax benefits.
➢ Monitor Youth Participation in High-Risk Instruments
More young investors are entering futures, options, and other risky trades.
SEBI should ensure stronger protection by setting clear rules, adding
warnings, and possibly limiting high-risk trading for beginners.
➢ Policy Measures to Support Banks Without Discouraging Capital
Market Growth

To address liquidity pressures faced by traditional banks due to declining
deposit inflows, policymakers should consider interest rate adjustments that
maintain a healthy balance between banking sector stability and capital
market expansion.

80

CHAPTER – 6
LIMITATIONS OF THE STUDY

The following challenges had been faced in the conduct of the
study and had taken maximum precautions to avoid such limitations, affecting
the accuracy of findings.
▪ Time Limitation: The broad timeline (2014-2024) constrained the ability
to conduct a detailed annual analysis.
▪ Sample Size: The limited number of respondents may not fully represent
the entire investor population.
▪ Dynamic Economy: Multiple changing factors (policies, inflation, global
trends) were not fully isolated, potentially affecting results.
▪ Subjective Expert Input: Expert opinions may not always align with
actual investor behavior, introducing a degree of subjectivity.

Thank You.

All the references used in the conduct of the study are clearly marked
with citation numbers and the details furnished in BIBLIOGRAPHY
appended below.

CHAPTER - 7
BIBLIOGRAPHY
1.
Mane S, Bhandari R (2014) - A Study of Investor’s Awareness and
Selection of Different Financial Investment Avenues for the Investor in
Pune City. International Research Journal of Business and Management, Pp
:45-51.
2.
Murlidhar A. Lokhande (2015) A Study of Investment Awareness and
Patterns of Savings and Investments by Rural Investors. Indian Journal Of
Finance, July 2015,Pp: 43-49
3.
Velmurugan G, Selvam V, & Nazar N A (2015) - An empirical analysis on
perception of Investors towards various Investment Avenues.
Mediterranean Journal of Social Sciences, 6(4), Pp: 427-435
4.
Aghila Sasidharan (2015) Gold as an Investment Option –A Study on
Investment Pattern of Investors in Kerala, International Journal of
Management and Commerce Innovations, Pp: 681-684

5.
Siby Abraham (2016) -Demand for Gold in a Changing Investment
Scenario – A Study in Ernakulam District. Commerce Spectrum Journal,
Pp: 41-45

6.
Greeshma V (2016) – A Study on Mutual Fund Investors Behavior in
Kerala. IRA-International Journal of Management & Social Sciences, Pp:
122-130

7.
T. Radhakrishnan (2017) - A Comparative Study on the Investor's
Perception of factors Influencing Choice of Investment Towards Mutual
Fund and Gold in Kerala. Asia Pacific Journal of Research, Pp: 36-39

8.
Banerjee & Sinha (2017) -Impact of Demonetisation on the Indian
Economy, Indian Journal of Economics and Development, Pp: 56-59

9.
The Quint (2017) - A Change in Investment Patterns in Households Post
Demonetisation,https://www.thequint.com/news/business/indian-
household-savings-financial-assets-potential-for-growth#read-more

10.
The Economic Times (2017)- How has retail money moved post
demonetisation?,https://economictimes.indiatimes.com/wealth/personal-
finance-news/how-has-retail-money-moved-post-
demonetisation/articleshow/61559222.cms?f)

11.
Reserve Bank of India (2017) - Household Savings and Investment
Behavior in
Indiahttps://www.rbi.org.in/Scripts/PublicationsView.aspx?id=17447

12.
Hindustan Times (2017) - Demonetisation Changed Saving Habits of
Indians, Says Finance Ministry,https://www.hindustantimes.com/india-
news/demonetisation-changed-saving-habits-of-indians-says-finance-
ministry/story-JitI4BPoRUKzpyeyUBdAuN.html

13.
Manisha Kaushal Arora (2018) - Comparative Analysis of Financial
Investment Patterns Before and After Demonetisation in the Delhi region,
Anusandhan - The Research Repository of GIBS, Pp: 63-68

14.
Manikandan (2019) - Perception of Investors towards the Investment
Pattern on Different Investment Avenues, Journal of Internet Banking and
Commerce.

15.
Athira K (2020) - Impact of Demographic Traits and Personality Traits of
Investors on Their Risk-Bearing Capacity: A Study with Special Reference
to Investors of Kerala, Indian Journal of Finance and Banking Pp: 64-78.

16.
Bansal (2021) - Rising popularity of Systematic Investment Plans (SIPs) in
Mutual Funds post-COVID-19, Indian Journal of Finance and Banking, Pp:
36-44

17.
Liya Rajesh (2021) - A Snapshot of the Investment Patterns of People in
Ernakulam District, Kerala, Based on Demographics at the beginning of
the Pandemic, International Journal of Multidisciplinary Educational
Research, Pp: 67-76

18.
Shah & Patel (2022) - Post-pandemic investment trends, International
Research Journal of Education and Technology, Pp: 33-45

19.
Sundar & Thomas (2023) - The Post-Pandemic Shift: Real Estate and
Capital Markets in India, Asian Journal of Management and Commerce,
Pp: 192-196
20.
Siby Abraham (2016) Op.cit 5

21.
The Quint (2017) Op.cit 9

22.
The Economic Times (2017) Op.cit 10

23.
Reserve Bank of India (2017) Op.cit 11

24.
Hindustan Times (2017) Op.cit 12

25.
Liya Rajesh (2021) Op.cit 17

26.
Athul Kuriakose & Dr.Sajoy P.B (2022) – Digital Transformation in the
Stockbroking Industry and its Role in Strong Retail Investor Participation in
the Indian Stock Market. The Management Accountant Journal, Pp: 50-54
27.
NSE Report (2021) – Market Pulse

28.
Smallcase Market Report (2022) – Rise of the Indian Retail Investor

29.
CRISIL Report (2022) – The Big Shift of Investors

30.
Bankers warn of systemic risk from deposits moving to mutual funds,
https://www.newindianexpress.com/business/2024/Sep/05/bankers-warn-of-
systemic-risk-from-deposits-moving-to-mutual-funds
31.
Mint News Report (2024), https://www.livemint.com/market/stock-
market-news/are-investors-moving-away-from-fixed-deposits-fds-to-equities-
amid-rising-stock-market-a-look-at-investment-trends-11708867491304.html
32.
Business Standard (2024) – News Report, https://www.business-
standard.com/markets/news/india-s-demat-tally-crosses-150-million-mark-for-
the-first-time-in-march-124040501034_1.html
33.
The Association of Mutual Funds in India (AMFI) Report – February
(2025), https://www.amfiindia.com/mutual-fund
34.
The New Indian Express (2022) Report – Cooperative sector in Kerala
faces trust deficit, 399 institutions report financial fraud
https://www.newindianexpress.com/states/kerala/2022/Jul/23/cooperativesector-
in-keralafaces-trust-deficit-399-institutions-report-financial-fraud-2479839.html
35.
The New Indian Express (2023) – Total deposits with cooperative & public-
sector banks in Kerala decline,
https://www.newindianexpress.com/states/kerala/2023/Oct/12/total-deposits-
with-cooperative--public-sector-banks-in-kerala-decline-2623080.html

CHAPTER - 8
ANNEXURES

Interview Schedule
1. Your current occupation (source of earnings).

2. In your opinion, to what extent do you consider yourself vigilant about
changes in the economic and political scenario and the future of different
forms of investments?

A. 0 to 20% B. 20 to 40% C. 40% to 60% D. 60% to 80%
E. 80 to 100%.

3. In which of the following categories do you belong for the purpose of this
study?

A. Investor B. Speculator C. Market Analyst D. Agent or Official in
financial market E. Just an observer
4. How much percentage of the earnings is invested on an average by the
Indian investor in organised market avenues over the period under study?
2014-15 2015 -16 2016-17

2017-18 2018-19 2019-20

2020-21 2021 - 22 2022-23

2023-24

5. What is your opinion on the priority of the investors in general on the
selection of investment avenues over the years? Please rank them in the
order of your consensus on the preference of investors, starting with
number 1, for the most preferred form of investment.?
a. Deposits in Co-op banks
b. Deposits in scheduled commercial banks
c. Life Insurance Schemes
d. National savings and RD schemes
e. Gold and precious metals
f. Real estate other than flats
g. Flats
h. Bonds
i. Mutual funds
j. Speculative trade (including Futures and options)
k. Equity
l. Own business or partnerships
m. Still Others.

Note: If the most preferred investment scheme of investors in Kerala
during the year 2017-18 had been deposits in co-op. societies, please
mark ‘a’ under rank 1 column for the year.

Year 2014-15
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2015-16
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2016-17
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2017-18
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2018-19
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2019-20
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2020-21
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2021-22
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2022-23
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

Year 2023-24
Rank No : 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

6. Please give a brief description of your reasons for the changes in
priorities ranked by you.

7. What is your expert opinion on the changing patterns of investment
choices of Keralites over the years under study, especially after
demonetisation and after the co-bank scams?

8. Is there a trend of definite flow of investments to Mutual fund schemes?

Yes No No opinion

9. What is your opinion on the impact of demonetisation on controlling
money laundering transactions?

a. Least impact b. Moderate control
c. Good control d. Best control

10. Do you believe the co-bank scams in Kerala have resulted in a
significant flow of funds from Co-Bank deposits to mutual fund schemes?

a. To a minimal extant b. To a good extent
c. Significantly d. In full.

STUDY ON CHANGING PATTERNS OF INVESTMENT CHOICES IN INDIA SINCE THE DAYS OF DEMONETISATION

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STUDY ON CHANGING PATTERNS OF INVESTMENT CHOICES IN INDIA SINCE THE DAYS OF DEMONETISATION

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