Demonetisation: Nothing mysterious behind September quarter deposit surge, says SBI Research

Mumbai: Describing the Rs 2.87 trillion surge in bank deposits ahead of demonetisation as a "curious case", SBI's economic research department today attributed it to income disclosure scheme, a seasonal surge and arrears from pay hikes for government employees.

Representational image. PTI

Representational image. PTI

It said on average, deposits have grown by Rs 1 trillion in September over the last three years but a surge of Rs 2.87 trillion in this September, ahead of the move to discontinue the Rs 500 and Rs 1,000 banknotes, made it a "curious case".

The SBI wing attributed Rs 1.56 trillion to "a seasonal increase" given that people save for festivities and weddings which come later, Rs 45,000 crore to award of arrears as per the seventh pay panel recommendation to central government employees and the residual increase of Rs 85,518 crore due to the IDS scheme.

"Given that IDS attracted a penalty of 45 per cent people may have preferred to disclose these as forceful deposits/advance tax payments so as to pay a tax of 30 per
cent and not 45 per cent," it said.

To back this point further, it said advance tax collections in September were quite satisfactory even as industrial growth was not so buoyant and there was slowdown in
government expenditure.

In 1997 as well, when the government had last launched a similar amnesty scheme, there was increase in "incremental deposits in the terminal month", it said.


Updated Date: Nov 22, 2016 12:14 PM

Also Watch

Social Media Star: Abhishek Bachchan, Varun Grover reveal how they handle selfies, trolls and broccoli
  • Monday, July 16, 2018 It's a Wrap: Soorma star Diljit Dosanjh and Hockey legend Sandeep Singh in conversation with Parul Sharma
  • Monday, July 16, 2018 Watch: Dalit man in Uttar Pradesh defies decades of prejudice by taking out baraat in Thakur-dominated Nizampur village
  • Monday, July 16, 2018 India's water crisis: After govt apathy, Odisha farmer carves out 3-km canal from hills to tackle scarcity in village
  • Sunday, July 15, 2018 Maurizio Sarri, named as new Chelsea manager, is owner Roman Abramovich's latest gamble in quest for 'perfect football'

Also See