Monday, November 14, 2016

Demonetisation: Monthly bank deposits in Sept at Rs 5.98 lakh cr, highest in 2 years


The second biggest mobilisation (in the two-year period) was in July 2015 when the aggregate deposits with SCBs grew Rs 1.99 lakh crore over June 2015.

In one of the highest monthly bank deposit mobilisation over the last two years, September 2016 saw an aggregate addition of Rs 5.98 lakh crore over that in August 2016 to hit an all-time high of Rs 1,02,08,290 crore.
A look at last two years monthly aggregate deposit data for banks, available with the RBI, shows that September’s figure in absolute terms is the highest monthly mobilisation by far during the period. The second biggest mobilisation (in the two-year period) was in July 2015 when the aggregate deposits with SCBs grew Rs 1.99 lakh crore over June 2015.
Even on a year-on- year basis, the growth in deposits in September is the highest in at least two years and it grew by 13.5 per cent (Rs 12.11 lakh crore) over that in September 2015. The growth in the same month last year was 9.97 per cent (Rs 815,820 crore). The Y-o-Y growth in deposits in July 2015 comes closest to the growth in September as it was 12.68 per cent (Rs 10.12 lakh crore) Even in August 2015, the y-o-y growth was 11.4 per cent.
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It is however, important to note that the sharp growth of 13.5 per cent in September comes on the back of subdued growth of between 7 and 9.5 per cent between April and August 2016.
Though questions have been raised on the sudden spike in deposits with banks in September 2016, ahead of the government announcement to withdraw old Rs 500 and Rs 1,000 notes out of circulation, the finance minister Arun Jaitley said that the spike in deposits was primarily on account of payout of arrears of 7th Pay Commission.
While some economists say that the quantum of deposit in September is above normal in absolute terms, some say that there were a few factors that could have led to the same. “The rise in deposits in September is partly seasonal and in Y-o-Y terms the numbers do not look that stark. Also, around September, cash gets built-up in the system ahead of the festive season and that leads to rise in deposits. Government’s fertiliser subsidy payout and money related to spectrum auction could have also lifted the deposits,” said Abheek Barua, chief economist at HDFC Bank.
On the other hand, DK Pant, chief economist India Ratings said that even if one takes into account the payout of 7th pay commission and amount linked to disclosures under IDS, “the amount is baffling.”
Similarly, DK Joshi, chief economist at Crisil said that while the amount of deposit in September is certainly more than normal, there have been a few reasons such as 7th pay commission payout and it could have partly resulted that.

-Indian Express

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