Banks witness decline in deposits, lowest in five years

Small SavingsBank deposits have reported a five year low response in the fiscal year 2017-2018. This fall is reportedly due to the demonetisation drive that reportedly effected savings instruments such as mutual funds and insurance.

According to Reserve Bank of India (RBI), the deposits in the banking system increased by 6.7 per cent in 2017-18, the lowest since fiscal 1963.

During the demonetisation drive people deposited high-denomination currency notes and therefore banks received Rs 15.28 lakh crore in November-December 2016.

As a result of this, deposits in the fiscal ended March 2017 inflated by 15.8 per cent to Rs 108 lakh crore.

The demonetisation drive was rolled out by the Prime Minister Narendra Modi led government in November 2016, where notes of Rs 500 and Rs 1,000 were recalled.

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