Deposits with urban cooperative banks in the state have zoomed to cross Rs 50,000 crore, mainly due to the rush to deposit scrapped notes of Rs 500 and Rs 1,000 with banks in the wake of demonetisation announcement on November 8 last year.
According to Gujarat Urban Cooperative Banks Federation (GUJFED), cumulative deposits of 220 urban cooperative banks in the state touched Rs 50,715 crore at the end of March 2017.
"The deposits of urban cooperative banks touched Rs 50,000 crore for the first time ever. Deposits rose by 26 per cent from Rs 40,183 crore at the end of the previous financial year," Jyotindra Mehta, chairman of Gujarat Urban Cooperative Banks Federation, told DNA.
Mehta, who is also president of National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB), said the surge in deposits was linked directly with demonetisation, the November 8 announcement by Prime Minister Narendra Modi that saw currency notes of Rs 500 and Rs 1,000 being withdrawn from circulation.
This was followed by lakhs of people queuing up at banks to either deposit or to exchange the scrapped notes for valid currency.
As compared to 26 per cent growth in deposits of UCBs, overall bank deposits in the state grew by just under 16 per cent during the fiscal.
A report by State Level Bankers' Committee said that from Rs 5.38 lakh crore in March 2016, bank deposits touched Rs 6.24 lakh crore in March 2017.
"Demonetisation has aided banks in high accretion of deposits. Withdrawal of legal tender character of Rs 500 and 1,000 notes, and subsequent caps on drawing of money, left banks with additional deposits," SLBC had said in a report.
The Banks' Federation said that along with deposits, advances of cooperative banks also reported strong growth during the year.
"Total advances of UCBs increased to Rs 26,954 crore in March 2017, growing by over 12 per cent from Rs 23,980 crore a year ago," GUJFED said.
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