People’s demand for cash continues to head northwards compared to pre-demonetisation levels despite the frequency of digital transactions going up and a substantial increase in bank deposits since November 2016.
Currency with the public (CwP), or people’s demand for cash or currency, is 7 per cent higher at Rs 18.25 trillion at the end of April compared to Rs 17 trillion at the beginning of November 2016, the Reserve Bank of India’s (RBI) data reveals.
Over the past four years, through its twin policies of Jan Dhan Yojana and demonetisation, the government has taken necessary steps to expand banking services substantially.
Today, around 80 per cent of Indians have a bank account, thanks to improvements in access to formal finance channels.
While account ownership has increased by 79 per cent since 2014, around 38 per cent of all bank accounts were inactive over the course of last year, the survey found. Similarly, the Jan Dhan Yojana, which was launched in 2014, has added around 310 million banking accounts with deposits totalling Rs 812 billion as of May 9.
As of May 2018, total bank deposits with the countries’ commercial banks are up 24 per from Rs 21.8 trillion in November 2016 to Rs 27.2 trillion at the end of April 2018, the data revealed. During the same time period, banks distributed around 9.7 million credit cards and 130 million debit cards, bringing the total to 37.5 credit cards and 861 million debit cards as of May 2018.
M3, which is the broadest measure of liquidity in the monetary system, has grown 13 per cent in May 2018 to Rs 140.3 trillion against Rs 124 trillion prior to demonetisation. M3 includes the value of CwP, current and time deposits as well institutional money market funds and other liquid assets, along with deposits with post offices.