Mumbai: As India braces to deal with an anticipated spurt in Covid-19 cases, the confidence of the average saver appears to be shaken. Mutual funds are already facing huge redemption pressures, with unit NAVs heading south. A possible beneficiary of all this could be traditional banks as investors look to shed risky assets.Government small savings schemes and small finance banks offering high returns on deposits could also draw in funds. “High market volatility will likely push savers out of equity and debt capital markets, and into safer bank deposits and small savings – at least for now. Within banks, those perceived as strong will probably garner the most deposits,” says Ananth Narayan, professor of finance at SPJIMR.Experts believe that the mutual fund industry is already seeing redemption pressures and could see equity flows slow to at least 10 percent in the month of March. While several mutual fund houses have debunked the redemption pressure talk, the next set of Amfi data set to be released in April will shed some light on the March statistics. Although banks have started substantially cutting their deposit rates, they are seeing healthy deposit flows.“Our deposit flow is better than usual; some feared that people will hoard cash due to the lockdown issue, but there has been no unusual movement,” said Rajnish Kumar, Chairman, State Bank of India (SBI).SBI was the first to lower its deposit rates after RBI pumped in about Rs 4 lakh crore into the system. SBI will now pay 5.7% for all deposits of less than Rs 2 crore between q and 10 years. Private lender Kotak Mahindra Bank is paying 6% on savings accounts with balance above Rs 1 lakh and up to Rs 10 lakh. Small finance banks like Fincare, ESAF, Suryoday still continue to give high returns of 7-9% on their savings deposits, but this could go down in the near term.The government on Tuesday disappointed savers, slashing interest rates on small savings schemes such as national savings certificate and public provident fund by up to 1.4 percentage points for the first quarter of 2020-21, in line with the moderation in bank deposit rates. But these rates still remain high as compared to several bank deposit rates.“I expect huge mobilisation of deposits toward the state-run banks as customers become more risk-averse, mutual fund returns fall and there are doubts over private sector banks in the minds of the basic saver,” said Raman Agarwal, CO-chairman, FIDC – an NBFC industry body. “What worries me is whether these cheap liabilities will get translated in the form of credit growth. That is anybody’s guess.”