Yes. Indian Banks has rewritten the 55-year-old record now. They have remembered their old record after half a century. The credit goes to our Prime Minister Narendra Modi. Going into the details, the demonetisation has severely impacted the banks. The growth rate of bank deposits has touched the lowest of the last 55 years now. The information has revealed by Reserve Bank of India(RBI).
RBI website revealed that the deposits for the last financial year(2017-2018) had registered the growth rate of only 6.7%. This is the lowest growth rate after 1963 financial year. There are two reasons for the situation as per the experts.. demonetisation and people looking for mutual funds and insurance.
It is known that Narendra Modi has announced demonetisation of Rs 500 & 1000 currency notes in November 2016. It has immediately demonetised 86% of total Indian currency. The people have immediately deposited all their money in the banks and deposits increased in banks. But the trend reversed in the recent past as the supply of currency was not sufficient. The people are facing a severe cash crunch in many locations in India. Bankers are saying that people are withdrawing money more than they required and that is the main reason for the cash crunch.
Banks received Rs.15.8 lakh crore worth deposits after demonetisation. It is equal to the old demonetised currency value. On the other hand, the total deposits for March 2017 have been Rs.108 lakh crores. They have become Rs.114 lakh crores by March 2018. This is fine but what bankers are worrying is that where is al the withdrawn money?
All that money has been pumped into Mutual Funds and Insurance as per the reports. Mutual funds registered a growth rate of 22% in the last financial year and Insurance sector registered a growth rate of 42% for the same period. One way it will be good for the people who go for bank deposits because the banks will increase their interest rates. HDFC bank has already increased their interest rate on time bound fixed deposits. So other banks also may follow the same route in the coming months.
RBI website revealed that the deposits for the last financial year(2017-2018) had registered the growth rate of only 6.7%. This is the lowest growth rate after 1963 financial year. There are two reasons for the situation as per the experts.. demonetisation and people looking for mutual funds and insurance.
It is known that Narendra Modi has announced demonetisation of Rs 500 & 1000 currency notes in November 2016. It has immediately demonetised 86% of total Indian currency. The people have immediately deposited all their money in the banks and deposits increased in banks. But the trend reversed in the recent past as the supply of currency was not sufficient. The people are facing a severe cash crunch in many locations in India. Bankers are saying that people are withdrawing money more than they required and that is the main reason for the cash crunch.
Banks received Rs.15.8 lakh crore worth deposits after demonetisation. It is equal to the old demonetised currency value. On the other hand, the total deposits for March 2017 have been Rs.108 lakh crores. They have become Rs.114 lakh crores by March 2018. This is fine but what bankers are worrying is that where is al the withdrawn money?
All that money has been pumped into Mutual Funds and Insurance as per the reports. Mutual funds registered a growth rate of 22% in the last financial year and Insurance sector registered a growth rate of 42% for the same period. One way it will be good for the people who go for bank deposits because the banks will increase their interest rates. HDFC bank has already increased their interest rate on time bound fixed deposits. So other banks also may follow the same route in the coming months.