 "Demonitisation effect: Surge in CASA deposits may bring down rates")
Scrapping of Rs 500 and Rs 1,000 notes as legal tender is expected to increase the flow of money into low-cost deposits of banks and nudge the lenders to reduce lending rates over one-two quarters.
CARE Ratings said in a report depositing the notes that have ceased to be legal tender would automatically lead to more being deposited in savings and current account of commercial banks. Such an increase would enhance the liquidity position of banks, helping in more lending. However, as some households would have held on to funds for emergency purposes, there would be some withdrawals at a
