IGI Logo

SBI Research in its latest report has said that the Reserve Bank of India’s (RBI) decision to withdraw Rs 2000 banknotes from circulation as a part of its currency management is likely to boost various macroeconomic parameters. On May 19, 2023, RBI decided to withdraw the Rs 2000 denomination banknotes from circulation but said it will continue to remain as legal tender. However, RBI has advised banks to stop issuing such banknotes with immediate effect.

As per the SBI Research report, though some amount would be withdrawn following the deposit, but going by the current trends, CASA deposits are likely to increase (Rs 1.5 lakh crore) due to this measure. Citing all scheduled commercial bank (ASCB) data , the report said that it shows that there has been an increase in total deposits of Rs 3.3 lakh crore during the fortnight ended June 2, 2023.

The report further noted that the average increase in deposits during the same fortnight in the last two years was around Rs 1.5 lakh crore. Thus, taking that also into account, banks may have received additional deposits of around Rs 1.8 lakh crore during the fortnight this year. Report also said that it seems Corporates, flush with in-hand liquidity, are parking the additional funds with Banks.