As we are nearing the first anniversary of the announcement of demonetisation, which led to a huge cash crunch in the entire economy, the Reserve Bank of India has released fresh data indicating a rise in currency holdings with the public after the move. After the complete withdrawal of Rs 500 and Rs 1000 notes on December 28, 2016, the RBI report states that the currency with the public dropped by 50% initially but after 10 months of demonetisation, has now surged back to 89%.
As on October 13, 2017, Rs.15.32 lakh crore was the currency recorded with the public which has dropped by 9.8% from what it was in the pre-demonetisation era. A week prior to the demonetisation on October 28, 2016, there was Rs.17.01 lakh crore with the public. When compared with the status of currency with the public a week after the deadline of demonetisation on January 6, 2017, a sum of Rs.8.11 lakh crore was recorded with the public. In mere 10 months, the amount with the public has shown a significant increase. But, Rs.1.31 lakh crore is yet to be pushed back to the public.
Increase in deposits
On October 28, 2016, Rs.96.46 lakh crore was the banks’ time deposits (i.e. fixed deposits), but almost a year after demonetisation, Rs 103.65 lakh crore was the fixed deposits seen with the banks as on October 13, 2017. A total rise of Rs 7.67 lakh crore or 8% increase in the fixed deposits. Even demand deposits, like current accounts, an increase of 22.8% was recorded. Rs 12.6 lakh crore worth of demand deposit is with the banks as on October 13, 2017. A rise of Rs 2.33 lakh crore. Even other deposits with RBI has seen a rise. Rs 22,490 crore worth of other deposits were seen with RBI, a rise of Rs 4,420 crore or 24.5%.