RBI report on demonetisation: Financial savings in insurance, shares rise

Demonetisation reduced the currency in circulation by 2.1%, but deposits rose from 4.8% to 7.3%

The government’s decision to demonetise Rs 500 and Rs 1,000 notes on November 8 seems to have increased inflows into the financial sector, such as insurance products and shares. The Reserve Bank of India’s (RBI) Annual Report shows that the contribution of insurance funds in household financial savings reached a six-year high of 2.9 per cent of the Gross National Disposable Income (GNDI) in 2016-17. Net financial saving was up from 7.8 per cent to 8.1 per cent. But, the growth of 30 basis points (bps) was lower than 2015-16 when it rose by 60 bps. 

Investments into shares and debentures