According to a report by SBI 'Ecowrap', the liquidity in the banking system is projected to witness a substantial improvement in the coming days. The report indicates that if the current trend of 80% of ₹2000 notes being deposited continues, the liquidity could surpass ₹1 lakh crore, as reported by the PTI.
The report further highlights that even if a portion of these trends is extrapolated at the level of All Scheduled Commercial Banks (ASCB), it is expected to result in a significant increase in banking system liquidity, surpassing the earlier estimated ₹1 trillion bulge in deposits.
However, the report said this is based on the current available information and might change depending on further data.
The Reserve Bank of India (RBI) on May 19 announced the withdrawal of ₹2000 denomination banknotes as part of its currency management and permitted the exchange of ₹2000 currency notes up to ₹20,000 in one go from Tuesday onwards. The exchange or deposit window is available from May 23 until September 30, 2023.
State Bank of India (SBI) on Monday said it has received ₹2,000 currency notes worth ₹14,000 crore in deposits after the RBI's move to withdraw the high-value currency notes from circulation.
"Around ₹14,000 crore worth of ₹2,000 currency notes have come into the accounts as deposits, while notes worth ₹3,000 crore were exchanged through the branch network. Generally, we are about 20% of the market," SBI Chairman Dinesh Khara said on Monday.
RBI Governor Shaktikanta Das recently stated that the majority of the withdrawn ₹2,000 currency notes are expected to be returned by the September 30 deadline.
This decision was made as part of currency management, and it's important to note that the ₹2,000 notes continue to hold their status as legal tender, he said.
Governor Das emphasized the resilience of India's currency management system, highlighting the stability of the exchange rate despite financial market crises triggered by the Ukraine war and bank failures in the West.
He further expressed that the withdrawal's impact on the economy would be minimal, considering that ₹2,000 notes constituted only 10.8% of the total currency in circulation.
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