ICICI Bank chief executive Chanda Kochhar said the note ban led to formalisation of financial savings and increased the flow of funds to mutual funds and insurance.
Just a day before the anniversary of demonetization, top level bankers of the country acknowledged that the Prime Minister Narendra Modi's decision of demonetizing notes of Rs 500 and Rs 1000 had done a lot of good to the ailing banking sector.
"For the banking sector, I would consider it positive as lots of money has come into the formal banking system. Casa (current account, savings account) deposits have gone up by minimum 250-300 basis points which itself is a big positive," SBI chairman Rajnish Kumar said.
People had deposited a lot of currency in the bank that left the lenders with deposits of trillions of rupees in surplus funds, leading to an overall decline in money market rates.
ICICI Bank chief executive Chanda Kochhar said the note ban led to formalisation of financial savings and increased the flow of funds to mutual funds and insurance.
"Post-demonetisation, there was a faster shift towards digitisation. Going forward, the whole approach towards digitisation will continue," Kochhar said.
Howevr, a section of analysts had initially claimed that the move would lead to a windfall gain of at least 20 per cent of the Rs 15.87 trillion (Rs 15.87 lakh crore) of banknotes cancelled, the Reserve Bank in June said as much as 99.1 per cent of the junked bills had returned to the banking system.
The newly appointed SBI chairman said that post-note ban and the rolling out of the Goods and Services Tax (GST), some sectors have seen improvement but there are certain segments which need to see more action.
Meanwhile, union Finance Minister Arun Jaitley on Tuesday, wrote a detailed post on Facebook explaining how demonetization had positively impacted the Indian economy. He said that the Prime Minister's move to get rid of old Rs 500 and Rs 1,000 notes on November 8, 2016 was the stepping stone towards a cash-free economy, which in the process could eradicate black money
Last year, Prime Minister Narendra Modi said Rs 500 and Rs 1000 currency notes would be scrapped as the government would issue new Rs 500 and Rs 2000 notes.
The move, PM Modi said, is aimed at curbing the menace of corruption, black money, counterfeiting and terrorism; these denominations are among the most counterfeited.
You can read the full post here.
(With inputs from PTI)
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