- Agitation paralysing Mumbai suburban services withdrawn
- CBI has started preliminary probe in SSC paper leak case: Centre tells SC
- No immediate arrest of public servants in cases under SC/ST Act: SC
- Choksi to CBI: Completely defenceless due to exaggerated allegations
- Won't cede even an inch of land, ready for bloody battle: Xi
- Bodies of 39 Indians, abducted by ISIS in Iraq, found: Swaraj
- Jailed AIADMK leader VK Sasikala's husband M Natarajan passes away
Unusual deposits of Rs 1.7 lakh cr during DeMo: RBI paper
‘Unusual’ cash deposits totalling Rs 1.6-1.7 lakh crore were made during the demonetisation period, says a research paper posted on the RBI website.
In nominal terms, it said, the excess deposits accrued to the banking system due to demonetisation are estimated in the range of Rs 2.8-4.3 lakh crore.
“The ‘unusual’ cash deposit in specific accounts, which are usually less active, is estimated to be in the range of Rs 1.6-1.7 lakh crore,” according to the paper, ‘Demonetisation and Bank Deposit Growth’.
Prime Minister Narendra Modi on November 8 had announced demonetisation of Rs 1,000 and Rs 500 notes valued at Rs 15.4 lakh crore and constituting 86.9 per cent of the value of total notes in circulation in a major assault on black money, fake currency and corruption.
The paper is authored by Bhupal Singh and Indrajit Roy who are directors in the Monetary Policy Department and Department of Statistics and Information Management, respectively.
It said that excess deposit growth in the banking system during the demonetisation period (November 11, 2016 to December 30, 2016) works out to 4.0-4.7 percentage points.
If the period up to mid-February 2017 is taken into account to allow for some surge to taper-off, excess deposit growth is in the range of 3.3-4.2 percentage points, it said.
“Considering some more temporal tapering of deposits, the exercise taken up to end-March 2017 reveals that excess deposit growth would be in the range of 3.0-3.8 percentage points,” the paper said.
According to the paper, aggregate deposits grew by 14.5 per cent (y-o-y) during the period November 11 to December 30, 2016, as against 10.3 per cent during the corresponding period of 2015.
Overall, there appears to have been a significant increase in bank deposits due to demonetisation, the paper said, adding, “which if sustained, could have favourable impact on financial savings and their channelisation to capital markets.”
A separate research paper titled ‘Financialisation of savings Into non-banking Financial Intermediaries’ said that demonetisation appears to have led to an acceleration in the financialisation of savings.
The research paper is authored by Manoranjan Dash, Bhupal Singh, Snehal Herwadkar and Rasmi Ranjan Behera; all work at Reserve Bank of India (RBI).
The paper also pointed out that in parallel, there is a shift towards greater formalisation of the economy in the near term aided by the introduction of Goods and Services Tax (GST) and regulations such as the Real Estate (Regulation and Development) Act, 2016 (RERA) and the Benami Transactions (Prohibition) Amendment Act, 2016.
“These developments may also incentivise greater shift from physical to financial savings,” it said.
- SEBI bars Remac Realty, 5 directors for illegal money-pooling schemes 21 Mar 2018 | PTI
- Markets inch up with minor gains; investors‚Äô eye on Fed policy meet 21 Mar 2018 | PNS
- Prabhu appeals for common ground to strengthen WTO 21 Mar 2018 | PTI
- UltraTech Cement may get support from Binani creditors 21 Mar 2018 | PTI
- Banks Board Bureau calls for greater dialogue with Finance Ministry; seeks more mandate 21 Mar 2018 | PNS
- EESL acquires UK-based utility Edina for Rs 493 cr 21 Mar 2018 | PTI
- Overseas push: Govt scraps export duty on sugar 21 Mar 2018 | Rajesh Kumar
- MG Motors outlines India growth story 20 Mar 2018 | PNS
- Business Corner 20 Mar 2018 | Pioneer
- Bandhan Bank public offer oversubscribed over 14 times 20 Mar 2018 | PTI
Sunday EditionView All
18 Mar 2018 | PNS
AAI conducts international workshop for utilizing GAGAN In keeping with the Prime Minister’s objective of using technology as a means of development and co-operation, Airports Authority of India has now offered GPS-aided Geo Augmented Navigation (GAGAN) to SAARC and Southeast Asian countries in order to allow them to reap the significant benefits that accrue from such an advanced navigation system. AAI conducted a two-day workshop on March 15 and 16, 2018...
STATE EDITIONSView All
21 Mar 2018 | PNS | Dehradun
Dehradun police have arrested an alleged member of an inter-state gang involved in vehicle theft in Haridwar and Dehradun districts from Muzaffarnagar in Uttar Pradesh on Tuesday. The accused has been identified as Vikram Malik, native of Shamli, Uttar Pradesh, police said, adding that he was currently living in Haryana...