Diwali, which is observed in honor of Rama Chandra, is celebrated due to a belief that he returned safely from exile after he had fought the demons and conquered. Rama Chandra, who was considered the seventh avatar, was said to have gone away for fourteen years fighting the demons, and he even conquered "Ravana," the demon king. The Hindus celebrate Diwali for several other reasons.
Another reason given by which Diwali is to be celebrated is that the goddess of wealth, goddess Lashkimi, was closely associated with Diwali. Another reason is that lord Vishnu rescued Rama from the prison of King Bali on that very Diwali day. In addition, the Diwali day is also marked as a victory festival to celebrate the killing of the demon king Narakaasur by Lord Krishna. Also, the day marked the Kartik moon day when MA Sita, Lakshman, and lord Ram returned to Ayodhya after defeating Lanka and conquering Ravana, the demon king.