Demonetisation lifts share of households in bank deposits by 200 bps: RBI report

Mumbai: Share of households in bank deposits has increased by nearly two percentage points to 63.5 in FY17 thanks to the note-ban-driven spurt in saving deposits by individuals, show data released by the Reserve Bank on Thursday. It can be noted that demonetisation, which involved pulling out of high denomination notes during the last November-December period, led to a massive spurt in cash deposits forcing RBI to ask banks to park the excess funds with it and draw interest on them. [caption id=“attachment_4260459” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The overall deposits by households increased by 14.14 percent to Rs 69,13,900 crore as against an 11.20 percent rise in total deposits with banks to Rs 1,09,43,700 crore, the Reserve Bank said. In the annual data on the composition and ownership of deposits, the central bank said the share of household deposits rose to 63.2 percent in FY17 from 61.5 percent in the previous fiscal led by savings bank deposits. “Unlike in the past, more than two-thirds of individuals’ incremental deposits were in the form of savings deposits,” it said, adding savings account deposits by individuals grew by nearly 30 percent to Rs 26,78,200 crore. Households’ share in total deposits grew across all types of deposits and in all population groups/ domestic banks groups, whereas in foreign banks, the private corporate sector held the major portion of deposits. The central bank said households and government sectors contributed the entire incremental deposits, whereas deposits of financial and foreign sectors shrank during the last fiscal. Among the states, Maharashtra remained at the top when in terms of share of deposits with 20.4 percent, followed by the Delhi NCR at 10 percent. But gauging by incremental deposits by households, it was UP that led the way with a 12.7 percent share followed by Maharashtra (9.5), Bengal (8) and Gujarat (7.1).