DeMo nets excess deposts of Rs 2.8-3.3 lakh crore

Excess deposits in the range of Rs 2.8-4.3 lakh crore accrued to the banking system during the demonetization period, with unusual cash deposits in specific accounts, which were usually less active, estimated to be in the range of Rs 1.6-1.7 lakh crore, according to a study conducted by Reserve Bank of India’ Bhupal Singh (Director, Monetary Policy Department) and Indrajit Roy (Director, Department of Statistics and Information Management).

Given the unusual cash deposits in specific accounts, which are usually less active, the authorities have opened investigations on the source of funds that flowed into the accounts.

On November 8, 2016, currency notes of Rs 1,000 and Rs 500 denominations (specified bank notes or SBNs), valued at Rs 15.4 lakh crore and constituting 86.9 percent of the value of total notes in circulation were demonetized.

The SBNs were demonetized (between November 9 and December 30, 2016) in a bid to fight corruption, black money, money laundering, financing of terrorists, and counterfeit notes.

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