Unusual cash deposits hit Rs 1.7 lakh crore after note ban: RBI

November 17, 2017
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COIMBATORE: The jury is still out on the benefits of demonetisation of high-value currency notes. But unusual cash deposits in specific accounts, which are usually less active, are estimated to be around Rs 1.7 lakh crore, according to an RBI study on the impact of demonetisation on the financial sector.

A significant amount of specified bank notes (SBNs, or demonetised notes) flowed into special types of accounts such as ‘basic savings bank deposit accounts’, Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts, dormant or inoperative accounts, cooperative banks’ accounts with scheduled commercial banks (SCBs), bullion trader/ jewellers’ accounts as well as loan accounts.

The total cash deposits in these accounts with 52 banks during November-December 2016 were estimated at Rs 4.36 lakh crore. Cash deposits in these accounts during September-October 2016 were Rs 2.7 lakh crore. “Thus, the variation of Rs 1.657 lakh crore can be assumed to be the increase in cash deposits under these accounts due to demonetisation, given that there is a lack of noticeable activity in such accounts during normal times,” the RBI said.

Interestingly, the detection of fake notes doubled after demonetisation.