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Bank deposits with RBI hit record high after demonetisation

Category: Financial Services,  News Source: Others,  Updated-On: Nov 25 2016

1. Demonetisation boosts Surplus cash with banks — deposits and borrowings that they retain after lending and investing — shot up by 274.6% to a record high of over Rs. 2.47 lakh crore in the fortnight ended November 11, data released by the Reserve Bank of India (RBI). 

2.  The amount includes money that came in post November 8 (after when 500 and 1000 denomination notes stopped), when the demonetisation of higher currency notes was announced and resulted in the credit to deposit ratio falling to a six- year low of 72.7%.

3.    India’s largest lender State Bank of India said on Friday banks received deposits worth Rs 53,000 crore since the government put out of circulation high-value banknotes in a bid to drain illegal wealth.

4.    In the wake of demonetisation, bank deposits with the Reserve Bank of India (RBI) have reached a record high of Rs. 4.3 trillion, beating the earlier record of Rs. 1.7 trillion in May 2009.

5.   The RBI accepts money from various banks by offering government securities as collateral. The Indian banking system had collected deposits worth Rs. 5.12 trillion as of 18 November.

6.   The rise in inflows has seen banks trim interest rates on deposits with one-year money fetching customers less than 7%.

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