Such a huge increase has happened only a few times: during the fortnight after demonetisation by Rs 4.16 lakh crore on November 25, 2016, Rs 3.55 lakh crore for the fortnight as on September 26, 2016, Rs 3.46 lakh crore as on March 29, 2019 and Rs. 3.41 lakh crore as on April 1, 2016, said the report.
State Bank Group Chief Economic Adviser Soumya Kanti Ghosh said in a note on Friday that November 2016 was due to demonetisation and can be attributed to the seasonal spurt in March and April of the same year.
According to provisional RBI data for the fortnight to November 19, the total deposits of commercial banks declined by Rs 2.7 lakh crore. The decline in deposits comes after a sudden increase of Rs 3.3 lakh crore in the previous fortnight ended November 5, 2021 – this was 36 per cent of the incremental deposit growth for the period of Rs 9.35 lakh crore.
In fact, the fortnightly deposits of Rs 3.3 lakh crore are the fifth largest fortnightly growth since 1997 and the post-deposit slowdown of Rs 2.69 lakh crore (fortnight ending November’19) is the biggest since 1997.
Such an increase and subsequent slowdown in deposits is quite the opposite trend, he said, adding that although the rise and subsequent decline is difficult to understand, it raises questions about the change in behavior trend in liquidity management/financial stability or customer payment habits. . Through digitization and hence less currency leakage and concomitant deposit bulge or both.
On the fortnightly deposit slowdown in the subsequent period, Ghosh said, “It was possible that there was a large influx of deposits into the banking system from the fortnight to November 5, 2021, in anticipation of a rally in the stock markets. issuance of companies and others. However, when such a rally did not take place, deposits declined and nearly 80 per cent of incremental deposits were withdrawn.
Interestingly, the money kept in the fixed reverse repo window increased from Rs 0.45 lakh crore on October 19 to Rs 2.4 lakh crore on November 19, and has remained at this level till December 1, 2021. Noted that the significant jump in digital transactions has resulted in underutilization of cash in the current financial year and may also lead to an increase in deposits ideally for the Diwali week.
Meanwhile, if the quarterly banking deposit data shows that at the national level sequentially, deposit growth remained the same at 2.6 per cent to 2.6 per cent in Q2, except in metro areas, deposit growth slowed in Q2 compared to Q1 This, especially in rural areas, shows that the current economic recovery is mostly urban-led and the rural economy is still recovering, it said.
But at the same time, bank credit increased by Rs 1.18 lakh crore, or 7.1 per cent, due to festive demands from the fortnight to November 5 and then declined by Rs 1,157 crore during the fortnight to November 19, the report said. Having said. ,
On a possible reason for the IPO rush, Ghosh noted the huge influx of new investors, which started since the lockdown began in March 2020 and which has intensified over the past few months, even as bank deposits has also decreased.
According to NSE data, monthly investor registrations rose to a record-high level of 15.6 lakh in September 2021. About 5 million additional new investors have been registered with the brokerage between April and September 2021 compared to the same period in 2020.
If deposits and loans grew by Rs 5 lakh crore during the rest of FY22 (November 19, 2021 to March 25, 2022), deposit growth would be around 12 per cent and credit growth would be around 8.5 per cent in 2021-22. ,