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I have carried out a study of effect of demonetization on additional deposit growth of banks and I found the following:
I have carried out a study of effect of demonetization on additional deposit growth of banks and I found the following:
fortnight ending 23 Dec 2016 additional deposit growth : Rs 5.43 lac crore.
fortnight ending 6 Jan 2017 additional deposit growth : Rs 4.95 lac crore.
fortnight ending 20 Jan 2017 additional deposit growth : Rs 4.00 lac crore.
fortnight ending 3 Feb 2017 additional deposit growth : Rs 3.53lac crore.
fortnight ending 17 Feb 2017 additional deposit growth : Rs 2.80 lac crore.
From above data it can be observed that customers are withdrawing their money on regular basis, if this trend continues that as at 31 march additional deposit growth on account of demonetization will come to NIL.
So effect of low cost money will vanish and banks may be forced to increase interest rates.
ANIL AGGARWAL
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