Aggregate Deposits Decline Rs 690 Crore

Aggregate deposits saw a fall of Rs 690 crore for the fortnight ended February 14, 1997, which is a reversal of consistent upward movement of deposits. Bank aggregate deposits came down to Rs 4,82,648 crore during the fortnight ending February 14, 1997, as against Rs 4,83,338 crore on January 31.

Moreover, the depositors during the period under review showed preference to time deposits over demand liabilities. This can be seen from the fact that time deposits have increased by Rs 1,434 crore and the demand deposits have come down by Rs 2,122 crore. The decline in aggregate deposits suggests that money has flowed out of the banking system during the first fortnight of February.

The preference for keeping money in cash rather than in bank can be seen from the fact that currency in circulation during the second week of February has also gone up by Rs 1,303 crore. Currency in circulation increased to Rs 1,37,741 crore on February 14, as against Rs 1,36,439 crore on February 7.

The fall in bank deposits is a technical correction to a continuous rise witnessed during the past few weeks. During the fortnight ending January 31, 1997, the deposits saw a astronomical growth of Rs 7,993 over the earlier fortnight ending January 17. Hence, the fall seen during the fortnight ending February 14 is a technical correction, said a treasury head of a south-based nationalised bank.

That apart, assets within the banking system have also come down