Rs 2,000 notes withdrawal: Bank deposits rise by Rs 3.26 trn in fortnight

Bank deposits rose by Rs. 3.26 trillion to Rs. 187.02 trillion in the fortnight ended June 2, 2023 as money came back to the banking system following the Reserve Bank of India’s (RBI’s) decision to withdraw Rs. 2,000 note from circulation.

According to the RBI data, deposits had shrunk by Rs. 59,623 crore to Rs. 183.74 trillion in the previous fortnight ending May 19, 2023. The liabilities, meanwhile, rose 11.8 per cent on a year-on-year basis as of June 2, up from 9.3 per cent a year ago.

After announcing the monetary policy on June 8, 2023, RBI Governor Shaktikanta Das had said there was Rs. 3.62 trillion of ₹2,000 notes in circulation as on March 31, 2023. After the denomination was withdrawn, about Rs. 1.8 trillion of ₹2,000 notes had come back till then, which was roughly about half of Rs. 2,000 notes in circulation as on March 31, 2023.

 

Bank credit grew Rs. 1.14 trillion to Rs. 140.08 trillion in the reporting fortnight, with the credit portfolio rising 15.4 per cent on a YoY basis, up from 13.1 per cent a year ago, the RBI data showed.

Credit offtake has remained robust even amid the significant rise in interest rates, and global uncertainties related to geo-political, and supply chain issues. The growth has been broad-based across segments.

Credit growth is expected to be in sync with the country’s economic growth in FY24, according to rating agency CARE.